RAMCHARAN SONI Vs. COMMISSIONER OF CUSTOMS (PREV.), PATNA

JUDGEMENT

(1.) IN these two appeals - C -128/94 under the Customs Act, 1962 and G -3/94 under the Gold (Control) Act, 1968 (since repealed) - the appellant Shri Ram Charan Soni of Varanasi has challenged the Common order dated 1 -6 -1994 passed by Collector of Customs (Preventive), Patna.

(2.) THE facts which are relevant are that Shri Ram Charan Soni (hereinafter referred to as Shri Soni), a licensed Gold Dealer of Varanasi, was intercepted at 21.40 hours on 8 -8 -1988 by the Customs officers at the Bus Stand of Gorakhpur and taken to the Customs Office. The search of his person resulted in the recovery of melted gold prices of foreign origin along with new gold ornaments, totally weighing 405 gms. valued at Rs. 3,24,340/ -, in respect of which Shri Soni failed to produce any bill, voucher, document etc. An amount of Rs. 15,000/ - was also recovered from him. The said gold, gold ornaments and the cash were seized under the Customs Act, 1962 and the Gold (Control) Act, 1968. Shri Soni was arrested. In his statement dated 9 -8 -1988, Shri Soni disclosed that the said gold and gold ornaments were purchased by him from Shri Rajesh Kumar Barnwal of Gorakhpur and stated that every week he used to purchase about 1 kgs of foreign gold from Shri R.K. Barnwal for sale at Varanasi. He admitted that foreign gold was deliberately melted with a view to efface foreign markings on the gold. Follow -up action at the residence of Shri R.K. Barnwal resulted in the recovery and seizure of 375 gms. of new gold ornaments valued at Rs. 1,05,000/ - about which there was no satisfactory explanation. In his statement dated 9 -8 -1988, Shri R.K. Barnwal stated that neither he had any business connection with Shri Soni nor he sold the said gold to him. In his bail application dated 16 -8 -1988 addressed to the Special Chief Judicial Magistrate, Allahabad, Shri Soni denied possession of the foreign gold and stated that the gold recovered from him belonged to different customers of Gorakhpur whose names and addresses he had furnished. Show -cause notices were issued to S/Shri Soni, R.K. Barnwal, Uday Shankar Lal, Krishna Bihari Lal and Pradeep Kumar Gupta. The adjudication proceedings resulted in absolute confiscation of the gold and gold ornaments, seized from Shri Soni, under the Customs Act, 1962 and the Gold (Control) Act, 1968 and penalties of Rs. 25,000/ - and Rs. 1000/ - were imposed on him under the Customs Act, 1962 and the Gold (Control) Act, 1968 respectively. The seized currency was, however, released. S/Shri R.K. Barnwal, U.S. Lal, K.B. Lal and P.K. Gupta were exonerated under the Customs Act, 1962. However, the seized gold ornaments of 375 gms. of Shri P.K. Barnwal were confiscated under the Gold (Control) Act, 1968. A penalty of Rs. 5,000/ - each was imposed on S/Shri R.K. Barnwal and U.S. Lal under the Gold (Control) Act, 1968. The present appeals have been filed by only Shri Soni.

(3.) SHRI K.K. Bhattacharjee, ld. consultant appearing for the appellant, submits that there is no evidence to prove that the impugned gold and gold ornaments are of foreign origin. He strongly contends that the samples of seized gold were not sent to Government Mint for assay purpose, instead the Customs relied upon the so -called expert opinion of a goldsmith Shri V.K. Barnwal who opined that 16 pieces of gold, alleged to have been melted from gold of foreign origin, was about 24 carat. He could not give a definite finding in this regard. As regards the penalty on the other pieces of gold, the said goldsmith certified the same to be about 22 carat or less than that. The ld. Consultant further submits that the appellant went to Gorakhpur only to deliver the gold ornaments to his customers and as they were not available the same could not be delivered to them. The appellant had also received orders from a new customers at Gorakhpur against old gold ornaments made over to him, which were seized by the Customs Officers. He argues that the burden is on the Customs to establish the smuggled nature and foreign origin of gold which the Department failed to discharge. In support of this argument, he refers to the decision of the Tribunal in Rajeev Sharma v. Collector of Customs, Delhi reported in 1995 (75) E.L.T. 116 (Trib.). The ld. consultant further argues that despite a specific request for opportunity to cross -examine the seizing officers, Panch witnesses and the Goldsmith who assayed the impugned gold, the same was denied thereby causing a serious handicap in his defence. The impugned order, according to the ld. consultant has been passed in gross violation of the principles of natural justice. In this connection, he relies upon the decision of the Tribunal in Navnil Shah v. Collector of Customs reported in 1993 (67) E.L.T. 426 (Trib.). The ld. consultant prays for setting aside the order impugned.