2019 (6) TMI 1615 - AT - Customs

Smuggling - Gold - Indian Currency - onus to prove - whether the appellant has satisfactorily discharged his onus under Section 123 of the Customs Act,1962 to the effect that the gold seized from him is not smuggled gold? - Confiscation - penalty - HELD THAT - The gold was not seized while it was being smuggled either at the Port or at the Airport. It was seized from his shop in the City. In such cases, Section 123 of the Customs Act, 1962, provides in respect of the gold and some other notified goods, if the seizure was under reasonable belief, that they are smuggled, the onus of proving that they are not rests upon the person from whom the goods were seized. The first question is whether there was reasonable belief. In this case, it is found that the seizure was based on the information that they had received and that the documents pertaining to the gold, were not found in shop at the time of seizure. There is nothing on record to suggest that the pieces which were seized had any foreign markings. Under these circumstances, there was no reasonable belief for the seizure. The appellant had produced various documents to show how he came in the possession of gold and these documents, on investigation, were found to be genuine. It is for this reason that the Ld.Commissioner has refrained from imposing any penalty upon the appellant under Section 114AA of the Customs Act, 1962 - not only was there no reasonable belief for seizure of the gold and the Currency in the first place, but also that the appellant has satisfactorily explained that the gold and currency which were in his possession. The confiscation of gold and the currency and imposition of penalty upon the appellant under Section 112 of the Customs Act, 1962, are, therefore, not sustainable and the impugned order needs to be set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
Consideration of whether the appellant discharged the onus under Section 123 of the Customs Act, 1962 to prove that the seized gold is not smuggled and the sustainability of seizure, confiscation of gold, Indian Currency, and imposition of penalties under various sections.

Analysis:
The case involved the seizure of gold and Indian Currency from the appellant's shop premises by Customs Officers based on information received. The appellant failed to produce stock registers or documents proving legal possession of the seized items during the search. Subsequently, the appellant submitted documents claiming the gold and currency belonged to other companies, whose premises were also searched, and statements of customers were recorded. The Commissioner ordered confiscation of the gold and currency, along with imposing a penalty on the appellant under relevant sections of the Customs Act, 1962.

The appellant contended that the seizure lacked a reasonable belief of smuggling as the seized gold did not have foreign markings, and burden of proof under Section 123 was not met. The appellant argued that genuine documents were produced later, proving legal possession of the items, and the Department found no incriminating evidence during searches of other premises. The appellant claimed that the seizure was without reasonable belief, but subsequent document submissions proved the legality of possession.

Upon review, the Tribunal found that the seizure lacked reasonable belief as required under Section 123 of the Customs Act, 1962. The Tribunal noted that the appellant had produced genuine documents during investigation, leading to the Commissioner refraining from imposing penalties under certain sections. As a result, the Tribunal held that the confiscation of gold, currency, and imposition of penalties were not sustainable. The impugned order was set aside, and the appeal was allowed.

In conclusion, the Tribunal found that the seizure lacked a reasonable belief of smuggling, and the appellant satisfactorily explained the legality of possession through genuine documents. Therefore, the confiscation of gold and currency, along with penalties imposed, were deemed unsustainable, leading to the setting aside of the impugned order and allowing the appeal.