2014 (1) TMI 279 - HC - Customs

Confiscation of goods - Attempt to smuggle gold - Discharge of burden of proof - Held that - there is a seizure specifically effected under the said Act of 1962. Hence, special rule of evidence under Section 123 of the said Act of 1962 will certainly apply and the burden will be on the appellant to prove that the said articles are not smuggled goods. As far as discharge of burden of proof is concerned, the case of the petitioner is that one Shri Kolekar had handed over old ornaments weighing 148.00 grams to the petitioner for making of new ornaments and that the said gold along with the gold of 52.00 grams available with the petitioner was used for making the said articles. The authorities below have noted that the statement of the said Shri Kolekar was recorded who denied to have given any such ornaments. Before the Collector, the petitioner did not appear. The petitioner did not lead any evidence to show that the said articles were made up from the gold ornaments weighing 148.00 grams supplied by Shri Kolekar. Therefore, the concurrent finding is that the petitioner could not explain as to how he came into custody of the said articles - Decided against assessee.

Issues Involved:
1. Legality of confiscation of gold articles under Section 111(d) of the Customs Act, 1962 and Section 71 of the Gold (Control) Act, 1968.
2. Imposition of penalties under Section 112 of the Customs Act, 1962 and the Gold (Control) Act, 1968.
3. Applicability of Section 123 of the Customs Act, 1962 regarding the burden of proof.
4. Availability and applicability of alternative remedies under Section 130 of the Customs Act, 1962.
5. Validity of seizure under the Customs Act, 1962 and the Gold (Control) Act, 1968.
6. Whether the gold articles in question constituted primary gold under the Gold (Control) Act, 1968.

Detailed Analysis:

1. Legality of Confiscation:
The petitioner challenged the confiscation of two gold articles weighing 200 grams under Section 111(d) of the Customs Act, 1962 and Section 71 of the Gold (Control) Act, 1968. The Collector of Customs and Central Excise, Pune, had issued a show cause notice and subsequently confiscated the gold articles. The Customs, Excise, and Gold (Control) Appellate Tribunal (CEGAT) confirmed this order. The court upheld the confiscation, noting that the petitioner failed to prove the gold was not smuggled, thus validating the confiscation under the relevant sections.

2. Imposition of Penalties:
The Collector imposed penalties of Rs. 25,000 under Section 112 of the Customs Act, 1962, and Rs. 10,000 under the Gold (Control) Act, 1968. The appellate authority reduced these penalties to Rs. 15,000 and Rs. 5,000, respectively. The court found no illegality in the imposition of penalties as the petitioner could not substantiate his claims regarding the origin of the gold.

3. Applicability of Section 123 of the Customs Act, 1962:
The petitioner argued that Section 123, which shifts the burden of proof to the person from whose possession the goods are seized, was wrongly applied since the gold was initially seized by the police and not directly under the Customs Act. The court referred to various precedents, including the Supreme Court's decision in Gian Chand v. State of Punjab, which clarified that the special rule of evidence under Section 123 applies only when goods are seized under the Customs Act. However, in this case, the court found that the panchanama indicated a seizure by the Customs Inspector under the Customs Act, thus making Section 123 applicable.

4. Availability and Applicability of Alternative Remedies:
The respondents argued that the petitioner had an alternative remedy under Section 130 of the Customs Act, 1962, and thus the writ petition should not be entertained. The court noted that this objection was not raised during the 17 years the petition was pending. Citing the Supreme Court's stance that the exclusion of writ jurisdiction due to alternative remedies is discretionary, the court chose to decide the petition on merits.

5. Validity of Seizure:
The court examined whether the seizure was valid under the Customs Act, 1962, and the Gold (Control) Act, 1968. The panchanama dated 17th October 1985 showed that the articles were seized under the Customs Act. The court also referred to the Supreme Court's decision in Gopaldas Udhavdas Ahuja, which held that the transfer of custody of goods to Gold Control Authorities constitutes lawful seizure under the Gold (Control) Act. Thus, the court upheld the validity of the seizure under both acts.

6. Whether the Gold Articles Constituted Primary Gold:
The petitioner contended that the gold articles did not constitute primary gold under Section 8(1) of the Gold (Control) Act, 1968. However, the court noted that this argument was not raised before the appellate authority or in the memorandum of appeal. Therefore, the court did not entertain this factual contention in the writ petition.

Conclusion:
The court dismissed the writ petition, finding no illegality in the impugned orders of confiscation and penalties. The rule was discharged with no order as to costs.

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