In Customs Appeal No.75315 of 2022 – CESTAT - CESTAT (Kolkata) holds confiscation of bangles and silver bar without foreign marking unjustified in absence of evidence of smuggling
Members P.K. Choudhary (Judicial) & K. Anpazhakan (Technical) [04-05-2023]

Read Order: Shri Daleep Kumar Verma and others v. Commissioner of Customs (Preventive), Shillong

Chahat Varma

New Delhi, May 25, 2023: The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal has ruled that bangles and silver bar, which did not bear any foreign marking, could not be have been legally confiscated, without evidence to substantiate the claim that the jewellery was smuggled into India.

Brief facts of the case were that Mr. Daleep Kumar Verma, proprietor of M/s. Shreeji Traders and Manufacturers (STM), was involved in the job work of gold jewellery. They received gold from Mr. Karan Sahadev, proprietor of M/s. K.S. Traders, Chandni Chowk, Delhi (KSTE), for the purpose of making jewellery. To carry out the job work, they employed two individuals, Mr. Rohit Kumar Suri and Mr. Harshit Gakhar. The business operations were conducted in Imphal, Manipur. A show cause notice was issued to Mr. Daleep Kumar Verma and other co-noticees by the Directorate of Revenue Intelligence (DRI), Guwahati. The Adjudicating authority passed an Order-in-Original, confiscating the gold and silver bars and imposed penalties on the appellants. The appellants filed an appeal before the Commissioner of Central Excise & Customs (Appeals), Guwahati, which was rejected.

The bench observed that STM in Imphal had received raw gold from KSTE in New Delhi for job work, and after completing the job work, the gold was dispatched. The bench noted that there was no evidence to support the claim that the gold was smuggled from Myanmar. Consequently, the bench ruled that the gold jewellery, which was dispatched under proper invoices, should not be confiscated.

The bench further held that the penalty provisions invoked against KSTE and its proprietor, Mr. Karan Sehdev, were not legally sustainable. The bench noted that the appellants were able to establish that the gold sent by KSTE to STM for job work was purchased from indigenous sources, and there was no documentary evidence to establish the role of Mr. Daleep Kumar Verma. Therefore, the bench agreed with the appellants' argument that the penalty was not imposable on them under section 112(b)(i) of the Customs Act, 1962.