2020 (2) TMI 1360 - HC - Customs

Smuggling - Gold Biscuits - Foreign Origin Goods - increase from 1166g to 1283g - confiscation - penalty - HELD THAT - In the present case, the writ petitioner could not discharge the burden at all since it was impossible for the writ petitioner to suggest that the 1283g of gold recovered from him were attributable to the 1166g of gold that had been purchased by him from G. Seal Co. some eighteen months back. Since there was no meaningful defence or any modicum of an explanation rendered by the writ petitioner as to how such writ petitioner came to be in possession of the gold that was found on his person, the order passed by the adjudicating authority and the order passed by the Tribunal cannot be faulted. The order of the Tribunal assailed in the writ petition clearly recorded cogent grounds as to why the Tribunal disbelieved the writ petitioner and agreed with the order of adjudication. When findings of fact are rendered by competent bodies having jurisdiction to enquire into such facts, such factual findings are to be scarcely interfered with in exercise of the power of judicial review unless they appear to be perverse on the face of it. An alternative argument has been attempted by the writ petitioner at this stage by referring to Section 125 of the Act of 1962. According to the writ petitioner, since it was not prohibited to import or export gold at the time when the seizure was effected from the writ petitioner, the adjudicating authority ought to have given the writ petitioner the option in terms of such provision before attempting to confiscate the goods - It does not appear that such a case was made out in the writ petition. No ground appears to have been taken in the writ petition that even if the adverse findings against the writ petitioner were not interfered with, the erroneous exercise of jurisdiction of confiscating the goods should be corrected. Since such a ground was not urged in the petition and it is not evident immediately as to whether the import or export of gold was prohibited in the year 1994, such ground has not been permitted to be canvassed by the writ petitioner at this stage. The order of the Tribunal is restored. The appellant will take immediate appropriate steps against the writ petitioner in accordance with law and in terms of the order passed by the Tribunal. The writ petitioner will pay costs of the entire proceedings assessed at ₹ 1 lakh.

Issues:
1. Confiscation of gold biscuits and penalty annulled.
2. Source of seized gold biscuits.
3. Adjudication and Tribunal's orders.
4. Defense raised by the writ petitioner.
5. Burden of proof on the writ petitioner.
6. Judicial review of factual findings.
7. Alternative argument under Section 125 of the Customs Act, 1962.

Confiscation of Gold Biscuits and Penalty Annulled:
The High Court of Calcutta heard an appeal by the department against an order that allowed the writ petition and annulled the confiscation of eleven gold biscuits from the writ petitioner, along with the consequent penalty. The seizure of the gold biscuits occurred in November 1994, with a total weight of 1283.650g.

Source of Seized Gold Biscuits:
The writ petitioner claimed that the seized gold came from a purchase made in February 1993 from a specific supplier, supported by a bill. However, discrepancies arose as the weight of the seized gold exceeded the purchased amount, raising doubts about the source and authenticity of the gold.

Adjudication and Tribunal's Orders:
The Customs Tribunal's order highlighted the lack of transaction records post-March 1993 and discrepancies in the weight of the gold seized compared to the initial purchase. The Tribunal disbelieved the writ petitioner's defense and upheld the confiscation.

Defense Raised by the Writ Petitioner:
The writ petitioner's defense involved melting and reshaping the gold biscuits obtained from the supplier, but the Court found the explanation implausible, especially given the weight inconsistencies and lack of transaction records.

Burden of Proof on the Writ Petitioner:
The Court emphasized that the burden lay on the writ petitioner to explain the origin of the gold seized, which the petitioner failed to do satisfactorily. The absence of a credible defense led to adverse inferences against the petitioner.

Judicial Review of Factual Findings:
The Court noted that findings of fact by competent bodies should not be interfered with unless they are clearly erroneous. The Single Bench's attempt to challenge the Tribunal's findings was deemed unsubstantiated upon a thorough review of the Tribunal's order.

Alternative Argument under Section 125 of the Customs Act, 1962:
The writ petitioner raised an alternative argument under Section 125 of the Act, claiming the adjudicating authority should have provided an option before confiscating the goods. However, since this argument was not adequately presented in the writ petition, it was not considered by the Court.

In conclusion, the High Court set aside the impugned judgment and restored the Tribunal's order, directing the appellant to take appropriate legal action against the writ petitioner. The writ petitioner was also ordered to pay the costs of the entire proceedings.

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