2005 (9) TMI 558 - AT - Customs

Smuggling Of Gold biscuits - Confiscation - Incomplete and poor investigation - burden of proof - HELD THAT - In present case the Commissioner of Appeals has held that the finding of the lower authority is contrary to the record in as much as in Show Cause Notice, it had been clearly recorded that on 19-3-2001, the appellant submitted 04 pcs. of T.T. gold Bars 999 which was purchased by him from M/s. Guinea Palace Ltd. Midnapore and he also retracted his earlier statement. Thereafter, the Department made investigation to the said shop and subsequently asked statement from the shop owner. Made investigation at M/s. Jalan Co. Pvt. Ltd. wherefrom the said shop used to purchase the gold bars. But the Department failed to obtain a final statement from M/s. Jalan Co. to the effect that the seized Australian gold biscuits had not been sold by them to M/s. Guinea Palace of Midnapore. He has also observed that the shop of Midnapore used to purchase gold bars from M/s. Indian Overseas Bank, Amrotolla St. Branch, 44, Rupchand Roy St., Calcutta-7. But no enquiry at any time been conducted to verify the veracity of the statement given by the owner of M/s. Guinea Palace to know whether the seized gold bars were sold by the said bank for them or not. Due to the said incomplete and poor investigation, the Department was not in a position to question the authenticity of the bill produced by the appellant and thereby to prove that the seized gold bars were not sold either by M/s. Jalan Co. or by M/s. Indian Overseas Bank and as such, were smuggled in nature and illegally acquired by appellant. He has, further, observed that the appellant has discharged the burden on him under Section 123 of Customs Act, 1962. The Department has failed to prove the document brought forward by appellant as false. From perusal of the above finding, it is clear that the Commissioner of appeals has given a detail finding based on record. I do not find any infirmity in the impugned order. Consequently, the appeal filed by the Revenue deserves to be dismissed. Accordingly, I dismiss the appeal.

Summary

Issues:
1. Seizure of gold biscuits based on specific information and presence of witnesses.
2. Legal possession, transportation, and importation of gold biscuits.
3. Burden of proof under Section 123 of Customs Act.
4. Admissibility of retraction corroborated by documents.
5. Incomplete and poor investigation leading to failure to question authenticity of seized goods.

Analysis:
1. The seizure of gold biscuits was conducted based on specific information and in the presence of witnesses, with a Panchnama drawn at the time of seizure. The appellant failed to produce any supporting documents for legal possession, transportation, and importation of the gold biscuits, admitting their smuggled nature and involvement, as per the voluntary statement. The impugned goods were deemed smuggled into India, contravening policy, shifting the burden of proof to the respondent under Section 123 of the Customs Act.

2. The respondent claimed the gold biscuits were acquired from a gold dealer firm, discharging their burden by submitting documents of legal acquisition. The appeal filed by the Revenue was supported by the Department's failure to refute the charges or prove the documents false, as corroborated by the appellant's retraction supported by purchase documents. The Commissioner of Appeals highlighted the scenario of liberalization in gold importation policy affecting the case.

3. The Commissioner of Appeals found the lower authority's findings contrary to the record due to incomplete investigation. The appellant's submission of gold bars purchased from specific sources was not adequately verified, leading to a lack of evidence to question the authenticity of the seized goods. The appellant was deemed to have discharged the burden under Section 123 of the Customs Act, with the Department failing to disprove the documents presented.

4. The detailed findings by the Commissioner of Appeals were based on the record, finding no infirmity in the impugned order. Consequently, the appeal filed by the Revenue was dismissed, affirming the Commissioner's decision based on the lack of evidence due to incomplete investigation.

This comprehensive analysis of the judgment addresses the issues of seizure, burden of proof, retraction, and investigation, providing a detailed overview of the legal proceedings and outcomes in the case.