2008 (5) TMI 466 - AT - Customs

Summary

Issues Involved:
1. Seizure of gold and its classification as smuggled goods.
2. Burden of proof u/s 123 of the Customs Act, 1962.
3. Validity of retracted statements.
4. Applicability of Section 123 of the Customs Act, 1962.
5. Confiscation of goods u/s 111(d) of the Customs Act, 1962.

Summary:

1. Seizure of Gold and Its Classification as Smuggled Goods:
The impugned goods, 3.2 Kgs of gold in the form of 48 yellow metal bangles and 60 rods, were seized from the deceased Suresh Mehta at the domestic airport. The allegation was that the seized gold was 25 foreign marked gold bars melted to avoid detection. The Commissioner concluded that the impugned goods were not smuggled and ordered their release.

2. Burden of Proof u/s 123 of the Customs Act, 1962:
The primary issue was whether the Respondents had discharged the burden to prove that the seized gold was not smuggled. The Commissioner found that the Respondents had provided sufficient evidence, including purchase documents and affidavits, to prove the gold's origin. The Revenue's contention that the gold was smuggled was not substantiated by concrete evidence.

3. Validity of Retracted Statements:
Statements recorded u/s 108 of the Customs Act, 1962, were retracted by the Respondents after their arrest. The Commissioner noted that these retractions were made almost immediately after release, and the statements were not reliable. The Tribunal agreed, emphasizing that the retracted statements alone could not justify confiscation or penalties.

4. Applicability of Section 123 of the Customs Act, 1962:
The Tribunal upheld the Commissioner's finding that Section 123 could not be invoked. The seized gold, being of 22 carat purity without any foreign markings, did not meet the criteria for invoking Section 123. The reasonable belief necessary for seizure under this section was absent.

5. Confiscation of Goods u/s 111(d) of the Customs Act, 1962:
The Tribunal found that the Department failed to prove the gold's foreign origin. The documents provided by the Respondents were found to be credible, and the Department did not conduct adequate investigations to refute them. Consequently, the confiscation of the gold u/s 111(d) could not be upheld.

Conclusion:
The Tribunal dismissed the Revenue's appeals, upheld the Commissioner's order to release the seized gold, and emphasized the lack of evidence to prove the gold was smuggled. The retracted statements were not considered sufficient for confiscation or penalties. The gold was ordered to be returned to the Respondents.