2014 (6) TMI 381 - AT - Customs

Confiscation of gold - Ownership of gold seized - possessing 24 Gold Biscuits of foreign origin - Penalty - Held that - gold seized upon examination by approved valuer proved to be of foreign origin with the purity written on the gold biscuits and all such biscuits valued in aggregate at Rs.12,03,724/-. Shri Dev Shankar Sharma categorically stated that no bills/invoices or documents in respect of the gold were given by Shri Dilip Ludwani to him. That also was not controverted by him at any point of time. This discards the plea of the bill number 1334 dated 21.04.2001 issued by M/s. M.P. Bullion owned by Shri Nachani. His evidence being consistently maintained and voluntary that cannot be discarded for no good reason shown. It may he stated that Sri Dev Shankar Sharma had not given statement before police. That was given before a customs officer under section 108 of customs Act 1962 which is good evidence as law is settled. In the course of hearing except creating doubts there was no substantive evidence adduced to prove that the gold seized was not of foreign origin nor it was proved that Shri Dilip Ludwani had imported those gold in accordance with Customs law. Shri Nachani failed to be owner of the gold since that was never been given by him to Shri Dev Shankar Sharma who was not required to deliver the same to M/s. Marudhar Jewellers. Revenue proved its case with cogent and credible evidence discharging its onus of proof bringing out that the gold biscuits seized were without any evidence of lawful import thereof. Shri Dilip Ludwani and Shri Nachani were not owner of the seized good as is held above. Similarly when Revenue tested the gold by approved valuer, the purity as well as the foreign origin of the gold was established. Customs authority seized the gold from Shri Dev Shankar Sharma only for the first time on 22.04.2001 under Customs Act 1961 without being a second seizure from the custody of police. There was no free import of gold allowed at the material time - Decided against assessee.

Issues Involved:

1. Confiscation of 24 gold biscuits under Section 111(d) of the Customs Act, 1962.
2. Imposition of penalties on individuals under Sections 112(b)(i) and 117 of the Customs Act, 1962.
3. Burden of proof regarding the smuggled nature of the gold.
4. Validity of statements and documentary evidence presented by the appellants.
5. Legal implications of the seizure by police and subsequent handling by Customs authorities.

Issue-wise Detailed Analysis:

1. Confiscation of Gold Biscuits:
The appellants challenged the absolute confiscation of 24 gold biscuits of foreign markings, weighing 2799.360 grams and valued at Rs. 12,03,724.00, under Section 111(d) of the Customs Act, 1962. The adjudicating authority held that the gold biscuits were smuggled and liable for confiscation. The gold was seized from Shri Dev Shankar Sharma by the Customs Authority on 22.04.2001 after being intercepted by police on 21.04.2001. The gold biscuits had foreign markings and no supporting documents were provided by Shri Sharma to prove lawful import and possession.

2. Imposition of Penalties:
Penalties of Rs. 1,00,000/- each were imposed on Shri Dev Shankar Sharma under Section 112(b)(i), Shri Dilip Bhai Ludwani under Section 112(b)(i), and Shri Keshav Kumar Nachani under Section 117 of the Customs Act, 1962. The adjudicating authority found that Shri Ludwani abetted the smuggling by providing the gold biscuits to Shri Sharma, while Shri Nachani falsely claimed ownership to protect Shri Ludwani.

3. Burden of Proof:
The appellants argued that the burden of proof lay on the Customs Authorities to show that the gold was smuggled, citing the Supreme Court judgment in Gyan Chand & Ors vs. State of Punjab. The Tribunal held that the foreign origin marking on the gold biscuits and the lack of import documentation shifted the burden to the appellants to prove lawful import, which they failed to do.

4. Statements and Documentary Evidence:
Shri Dev Shankar Sharma consistently stated that he was an employee of M/s Honest Bullion, owned by Shri Dilip Bhai Ludwani, and that he was carrying the gold biscuits on Ludwani's instructions without any supporting documents. Shri Ludwani denied involvement and claimed the gold belonged to his sister concern, M/s M.P. Bullion, owned by Shri Nachani. Nachani produced a sale bill and claimed the gold was purchased from MMTC, but the adjudicating authority found these claims to be false and fabricated. The Tribunal upheld the adjudicating authority's findings, noting inconsistencies and lack of credible evidence from the appellants.

5. Seizure by Police and Customs Handling:
The Tribunal noted that the police did not formally seize the gold under CRPC on 21.04.2001; the first formal seizure was by Customs on 22.04.2001. The appellants' reliance on the Gian Chand case was dismissed as inapplicable, as the facts differed significantly. The Tribunal concluded that the Customs authority's seizure was valid and lawful.

Conclusion:
The Tribunal dismissed all three appeals, upholding the confiscation of the gold and the imposition of penalties. The appellants failed to provide substantive evidence to counter the findings of the adjudicating authority. The Tribunal found that the gold was smuggled and the appellants' claims were false and fabricated. The judgment emphasized the importance of credible evidence and the burden of proof in cases involving smuggled goods.

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