2017 (3) TMI 1113 - AT - Customs

Detention of gold with vehicle - seizure of gold during movement - whether smuggled / imported gold or locally procured - gold was being transported by the appellant from the Delhi branch to their Agra Branch - Held that - law requires such person as in this case, the appellant to discharge the onus as regards the licit purchase and acquisition of the specified item or gold u/s 123 of CA - It is admitted fact that the appellant have produced tax invoice in support of purchase of the gold in question from another dealer who is also duly registered with the trade tax and other authorities, and it is also further fact on record that payment for the purchase was made through the banking channel RTGS. It is further evident from the records that the said gold was being transported by the appellant from the Delhi branch to their Agra Branch and proper Challan had been issued, as well as road permits/waybill which was pre-authenticated by the Sales Tax Department and the appellant is required to maintain proper records of usage of such road permits and account for the same before the Trade Tax authorities. I hold under the facts and circumstances, the appellant have discharged their onus as required u/s 123 (1) and (2) of the CA. I further hold that Section 123 of the CA requires to explain the licit source of acquisition and not source of source. Accordingly, I find that the impugned order is untenable being erroneous. Gold to be returned - confiscation with penalty set aside - appeal allowed - decided in favor of appellant.

Issues Involved:
1. Confiscation of 12 gold bars and Toyota Etios Liva car.
2. Imposition of penalties on various individuals and entities.
3. Legitimacy of the gold's acquisition and transportation.
4. Applicability of Section 123 of the Customs Act.
5. Compliance with procedural requirements.

Issue-wise Detailed Analysis:

1. Confiscation of 12 Gold Bars and Toyota Etios Liva Car:
The appellant, AIMR Jewels Pvt. Ltd., challenged the absolute confiscation of 12 gold bars and a Toyota Etios Liva car by the Customs Authority. The gold bars were seized during transit from Delhi to Agra by the Sales Tax Authority and later confiscated by the Customs Authority. The car used for transportation was also confiscated, with an option to redeem it on payment of ?1 Lakh. The Tribunal found that the appellant had provided sufficient documentation, including tax invoices and banking records, to prove the legitimate purchase and transportation of the gold bars. The Tribunal ruled that the confiscation was untenable and ordered the return of the gold bars and the car to the appellant.

2. Imposition of Penalties on Various Individuals and Entities:
Penalties were imposed on Shri Swadesh Verma (Director of AIMR Jewels Pvt. Ltd.), the appellant company, the driver Shri Ajay Kumar, and Mrs. Ruchi Rastogi (previous owner of the car). The proposed penalties on other individuals and entities were dropped. The Tribunal set aside all penalties, finding that the appellant had discharged their onus under Section 123 of the Customs Act by providing valid documentation for the gold's acquisition and transportation.

3. Legitimacy of the Gold's Acquisition and Transportation:
The appellant provided evidence of purchasing the gold from M/s Bilasa & Sons Pvt. Ltd., which had, in turn, acquired it from M/s Supreme Gold. The gold was part of a consignment imported by M/s HHEC from Dubai. The Tribunal found that the chain of transactions was sufficiently established through proper tax invoices, banking records, and other documentation. The Tribunal held that minor discrepancies in the markings on the gold bars did not invalidate the legitimacy of the acquisition and transportation.

4. Applicability of Section 123 of the Customs Act:
The Tribunal considered whether Section 123 of the Customs Act, which shifts the burden of proof regarding the licit acquisition of gold to the appellant, was applicable. The Tribunal ruled that the appellant had successfully discharged their burden by providing valid documentation and that the burden of proof had shifted back to the Customs Authority. The Tribunal also noted that the initial seizure by the Sales Tax Authority rather than the Customs Authority weakened the applicability of Section 123 in this case.

5. Compliance with Procedural Requirements:
The Tribunal noted that the appellant had complied with procedural requirements by providing a road permit pre-authenticated by the Sales Tax Department, proper challans, and maintaining records of the road permits. The Tribunal found that the Customs Authority had not adequately considered these documents and had erroneously confiscated the gold and the car.

Conclusion:
The Tribunal allowed the appeal, setting aside the confiscation of the gold bars and the car, and ordered their return to the appellant. All penalties imposed were also set aside. The Tribunal emphasized that the appellant had discharged their onus under Section 123 of the Customs Act and that the Customs Authority had not provided sufficient evidence to justify the confiscation. The appellant was entitled to the return of the gold bars and the car within 30 days, along with any consequential benefits.

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