2016 (10) TMI 17 - AT - Customs

Restoration of confiscation order by the Adjudicating authority - foreign marked gold bars - foreign markings in the delivery / sales documents - whether this is a case of smuggling and confiscation order need to be restored in the view that foreign markings were not present in the sales documents? - Held that - It is not a legal requirement to indicate the foreign markings of the gold bars in the sale bills. Once importer MMTC Ltd is not showing any foreign markings in the delivery / sales documents then the Respondent can not be questioned to explain the foreign markings not indicated in the bill No. 527 dated 30/1/97. Once Respondent has produced such a bill then the burden under Sec 123 of the Customs Act 1962 stands discharged. It is a well settled legal proposition that a case can not be held to be established on the basis of assumptions, presumptions & surmises. Revenue is not able to demonstrate with documentary evidence that the seized gold bars were procured from any other source, except raising some suspicion. No confiscation justified - appeal dismissed - decided against Revenue.

Summary

Issues:
Confiscation of foreign marked gold bars, Burden of proof under Sec 123 of the Customs Act 1962, Legal requirement to indicate foreign markings in sale documents, Correctness of first appellate authority's decision.

Analysis:
The judgment involves an appeal filed by the Revenue against an order passed by the first Appellate authority in favor of the Respondent, concerning the confiscation of foreign marked gold bars. The Revenue argued that the gold bars were of foreign origin, as indicated by Swiss markings, and that the ultimate source of the gold differed from what was found with the Respondent, making it liable for confiscation. However, the Respondent produced a purchase bill from a supplier confirming the sale of foreign marked gold bars, which did not contain any markings. The Respondent argued that there is no legal requirement to indicate foreign markings in sale documents, supported by the fact that even documents from the importer did not contain such markings.

The key issue was whether the confiscation of the gold bars should be restored or if the first appellate authority's decision to allow the appeal was correct. The Tribunal noted that the burden of proof under Sec 123 of the Customs Act 1962 was on the Revenue, and it had to demonstrate with documentary evidence that the seized gold bars were not purchased by the Respondent under the documents produced. The Tribunal emphasized that a case cannot be established based on assumptions, presumptions, or surmises, requiring concrete evidence. The Tribunal found that the Revenue failed to provide such evidence and that the findings of the first appellate authority were justified.

The Tribunal referred to the observations made by the Hon'ble Calcutta High Court, which emphasized that the department needed to do more to prove that the confiscated gold bars were not purchased by the Respondent under the produced documents. As the Revenue could not demonstrate an alternative source for the gold bars and only raised suspicions without concrete evidence, the Tribunal upheld the decision of the first appellate authority. Consequently, the appeal filed by the Revenue was dismissed, affirming the first appellate authority's decision in favor of the Respondent.