2014 (8) TMI 80 - AT - Customs

Confiscation of gold u/s 111 - contravention of notification No. 9/96 dated 22.1.1996, issued under Section 11 - Held that - The prop. Of the said M/s. Dhancholia had also deposed to have sold the gold to the appellant. As such, by producing the said evidence, the appellant has discharged the initial burden of proof. If the revenue seeks to establish the said stand as false, it is for them to produce the evidence. Mere dismissal of the same, as an afterthought, when there is virtually no evidence to demolish the said stand of the appellant, especially when the same stand corroborated by production of invoice as also by the statement of Shri Sada Narain Sharma, prop. of M/s. Dhancholia & Sons, Chandni Chowk, New Delhi, is not legal and proper. Similarly, reliance on the initial statement, which stand retracted at the time of bail application and duly substituted by following statement is also, not in accordance with law. The said statement is not confessional in the strict sense, in as much as, the same nowhere admits the smuggling of the gold by the appellant himself and is based upon hear-say evidence. Further, there is admittedly no corroboration to the said retracted statement and no evidence indicating and establishing the smuggled natural of the gold - no merits in the Revenue s case for confiscating of the gold or for imposition of penalties - Decided in favour of assessee.

Summary

Issues:
- Confiscation of gold under Section 111 (d) and 120 of the Customs Act
- Confiscation of Maruti Van under Section 115 (2) of the Customs Act
- Imposition of penalty under Section 112 (b) of the Customs Act

Confiscation of Gold:
The case involved the confiscation of gold under Section 111 (d) and 120 of the Customs Act. The appellant was found with gold pieces in his possession, which were suspected to be imported from Nepal in contravention of relevant notifications. The initial seizure was based on the belief that the gold was smuggled. However, the appellant claimed to have purchased the gold from a commission agent in Delhi, supported by a bill and testimony from the seller. The Tribunal and customs authorities relied heavily on the initial statement, which was later retracted by the appellant. The High Court emphasized the need for corroborative evidence and adherence to Section 125 of the Act, which provides the option to pay a fine in lieu of confiscation. The Court found that the Revenue failed to establish the appellant's guilt beyond a reasonable doubt, especially when the appellant had provided evidence supporting his claim of lawful purchase.

Confiscation of Maruti Van:
The Maruti Van used for transporting the gold was also subject to confiscation under Section 115 (2) of the Customs Act. The authorities confiscated the van and provided the option to redeem it upon payment of a fine. However, the High Court's analysis of the case focused on the primary issue of the gold confiscation. The Court's decision to set aside the orders for gold confiscation also impacted the fate of the Maruti Van confiscation, as both were interlinked in the case.

Imposition of Penalty:
Additionally, the appellant faced the imposition of a penalty under Section 112 (b) of the Customs Act. The penalty was imposed by the Joint Commissioner of Customs, who upheld the confiscation of gold and the van. However, the High Court's ruling on the confiscation of gold and the lack of sufficient evidence to prove smuggling or unlawful possession led to the dismissal of the penalty imposition as well. The Court found no merit in the Revenue's case for confiscation of the gold or the imposition of penalties, ultimately allowing the appeals and granting relief to the appellant.

In conclusion, the judgment by Ms. Archana Wadhwa of the Appellate Tribunal CESTAT New Delhi focused on the lack of substantial evidence to support the confiscation of gold, the Maruti Van, and the imposition of penalties. The Court emphasized the importance of corroborative evidence, adherence to statutory requirements, and the burden of proof on the Revenue to establish guilt beyond a reasonable doubt. The appellant's claim of lawful purchase, supported by documentary evidence and witness testimony, played a crucial role in overturning the initial orders and granting relief in the appeals.