Rakesh B. Jain vs Commissioner Of Customs (Prev.) on 2 November, 2000

Customs, Excise and Gold Tribunal – Mumbai
Rakesh B. Jain vs Commissioner Of Customs (Prev.) on 2 November, 2000
Equivalent citations: 2001 (127) ELT 563 Tri Mumbai


J.H. Joglekar, Member (T)

1. I have heard Shri Sonawane, Consultant for the applicant and Smt. Arya for the Department.

2. Two pieces of primary gold, the gold chains weighing 51.500 gms. and Indian currency of Rs. 20,000/- were seized from the possession of the applicant on 27-10-97. In his statement recorded on 28-10-97, the applicant claimed to have purchased the gold for cash without any document for conversion into gold chains. The applicant was summoned to appear on the next day but he did not appear. On 31-3-98 he wrote a letter to the Customs claiming local purchase of the gold and enclosing therewith an invoice given by a dealer. The contents of the above statements were retracted. On the same date, on his behalf, another letter was written making similar claim. This letter was duly received by the Supdt. Hqrs. of the Commissionerate. Thereafter, show cause notice was issued on 20-4-98 in which cognizance of these two letters was not taken. After hearing the Consultant, the pieces of gold and the chains were confiscated absolutely under Section 111(d) of the Customs Act and Section 120 of the Customs Act and the currency was released. A penalty of Rs. 25,000/- was imposed on the applicant. Thereafter, the applicant filed the appeal and the present application.

3. Shri Sonawane relies upon the Tribunal’s judgment in the case of Daroga Singh Prop. Vijay Stores 1992 (60) E.L.T. 427 (Tribunal) in support of the applicant’s claim. He submits that in spite of the applicants having produced the substantial evidence, the Customs did not take cognizance thereof before issuing the show cause notice. He submits that the letter dated 31-3-98 was duly received and the claim made thereunder was known to the department. He submits that his client had purchased the gold in lawful course and he has discharged the burden cast upon him under Section 123 of the Customs Act. On the aspect of hardship, he claims that his income is such that he cannot pre-deposit the penalty amount.

4. Smt. Arya on the other hand supports the impugned order. She submits that although the show cause notice was issued on 20.4.98, it has been drafted prior to the receipt of the said letter of the applicant.

5. I have considered the submissions. Since the claim of lawful acquisition of gold was made before the date of issue of show cause notice, the Customs were required to examine the same. Once the show cause notice was issued, the verification of the claim could not be properly be made by the Asstt. Commissioner. There is a lacunae in the proceedings. The applicant is claiming the gold. The applicant’s financial position is precarious. On these observations, I allow the application and grant waiver of pre-deposit of the penalty and stay its recovery during the pendency of the appeal proceedings.

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