2003 (11) TMI 515 - AT - Customs

Summary

Issues Involved:
1. Legality of the seizure of 21 foreign marked gold biscuits.
2. Burden of proof under Section 123 of the Customs Act.
3. Validity of the documents produced by the respondents.
4. Allegations of coercion and duress in obtaining statements.
5. The role of the Assistant Commissioner's enquiry report.
6. Decision on penalties and confiscation under the Customs Act.

Detailed Analysis:

1. Legality of the seizure of 21 foreign marked gold biscuits:

Customs Officers raided the residential-cum-business premises of a respondent on 23-4-1997 and recovered 21 FM gold biscuits weighing 2449.944 gms., valued at Rs. 11,84,550/-, concealed under a bed-sheet. The officers believed the gold biscuits were brought through illegal means in contravention of Sections 7(c) and 11 of the Customs Act and were liable to confiscation under Section 111 of the Act, hence seized the goods under Section 110 of the Act.

2. Burden of proof under Section 123 of the Customs Act:

The adjudicating authority held that the seized gold biscuits are not liable to confiscation. The authority ordered the release of the goods to M/s. Balaji Enterprises and dropped the proposal to impose penalties on the respondents. The burden was on D.R. Jain and U.C. Gupta to prove that the goods were not smuggled and had been legally acquired. The respondents succeeded in discharging the burden of proof by establishing an unbroken sequence of lawful transactions leading to D.R. Jain's possession of the gold.

3. Validity of the documents produced by the respondents:

Documents produced included copies of challans, an agreement between Jain Bullions and Balaji Enterprises, Delivery Challans of MMTC, Bill of Entry, TR-6 challan, and a certificate of M/s. Ess Vee Jewellers. The adjudicating authority found that the 21 gold biscuits sent by M/s. Balaji Enterprises to D.R. Jain were part of the consignment of gold bars purchased from M/s. Ess Vee Jewellers, who had imported the consignment under Bill of Entry dated 14-2-1997 through MMTC. The evidence presented was not rebutted by the Customs.

4. Allegations of coercion and duress in obtaining statements:

Statements recorded under Section 108 of the Customs Act on 23-4-1997 and 24-4-1997 were retracted by the respondents, alleging that they were made under force and duress. A Panch witness swore before the District and Sessions Judge, Jaipur that the original challans were produced to the officers at the time of the raid, but the officers seized the goods for want of evidence of lawful import. This evidence was not countered by the department.

5. The role of the Assistant Commissioner's enquiry report:

The Assistant Commissioner (Preventive), New Delhi, through an enquiry, communicated that the gold biscuits sent by Balaji Enterprises under Challan Nos. 14, 15 and 16, dated 22-4-1997, were part of a consignment purchased from M/s. Ess Vee Jewellers. The DR submitted that the findings based on the Assistant Commissioner's letter were not sustainable, but the adjudicating authority found the report credible and supportive of the respondents' case.

6. Decision on penalties and confiscation under the Customs Act:

The adjudicating authority's decision to release the goods to M/s. Balaji Enterprises and drop the penalties was upheld. The tribunal noted that the department proceeded on suspicion rather than evidence and failed to counter the respondents' proof of lawful acquisition. The tribunal concluded that the seized gold biscuits were not liable to confiscation under Section 111 of the Customs Act, and no penalties could be imposed on any of the parties.

Conclusion:

The tribunal upheld the order of the Commissioner, rejecting the department's appeals, and confirmed that the 21 gold biscuits were not liable to confiscation and no penalties were warranted under the Customs Act.