CESTAT Kolkata Sets Aside Confiscation Of 3.65 Kg Gold After Jeweller Produces GST, Purchase Records

The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Kolkata, has set aside the confiscation of more than 3.65 kg of gold claimed by a Meerut jeweller.

The tribunal held that records produced by the claimants showed the gold had been procured on payment of GST and accounted for in the firm's books.

A bench of Judicial Member Ashok Jindal and Technical Member K. Anpazhakan allowed appeals filed by Akhil Maheshwari, Anil Kumar Yadav and Nikhil Maheshwari. The bench also directed the release of the gold and set aside the penalties imposed on them.

"In that circumstances, the gold in question is not liable for confiscation," the tribunal held.

The case arose after DRI officers intercepted Anil Kumar Yadav at Howrah Railway Station on August 9, 2020. They recovered four gold bars and 12 small cut pieces of gold weighing 3,651.3 grams and valued at about ₹2.07 crore. The gold was seized because Yadav could not produce documents supporting its possession or transportation at the time.

According to the investigation, Yadav had travelled to Kolkata on the instructions of Akhil Maheshwari. He stated that the gold had been handed over to him by a person identified as Goldy and was being transported to Meerut.

Ownership of the gold was later claimed on behalf of Pooja Jewellers, a Meerut-based jewellery business. The claimants produced purchase registers, tax invoices, GST returns, banking transaction details and job-work challans to prove that it was lawfully procured.

The tribunal noted that the appellants had placed on record purchase invoices for the gold, purchase registers and GST returns. Job-work challans were also produced during the proceedings.

The bench found that the documentary evidence had been discarded by the adjudicating authority despite records showing that GST returns had been filed and the gold had been accounted for.

"As the gold in question is duty paid and GST Returns have been filed by the appellants and produced the purchase register thereof, which has been discarded by the adjudicating authority. In that circumstances, the evidences produced by the appellants are required to be considered by the adjudicating authority. The appellants have been able to discharge their onus under Section 123 of the Customs Act, 1962," the tribunal held.

The tribunal also noted that the seized gold did not bear any foreign-origin markings. It further recorded that the matter involved a town seizure.

"Moreover, we find that the gold in question is not having any foreign origin marking on the gold and it is the case of town seizure. Moreover, the purity of gold 99.6% and the documents for procuring the said gold have been produced by the appellants and the same has been brought on record," the tribunal observed.

The bench concluded that documents produced by the appellants showed that the gold had been procured on payment of GST and recorded in the books of account.

"We further take note of the fact that on the production of the documents by the appellants for procuring the gold on payment of GST and the same has been recorded in the Books of Accounts. In that circumstances, it cannot be said that the gold in question is of foreign origin being smuggled one," the tribunal observed.

Holding that the appellants had discharged the burden cast on them under the Customs Act, the tribunal set aside the confiscation order. It also quashed the penalties imposed on all three appellants and directed release of the seized gold with consequential relief.

For Appellants: Advocate Amit Kumar

For Respondent: Sameer Chitkara (Commissioner) and A.K. Choudhary, Authorized Representatives.