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2017 (7) TMI 451 - AT - CustomsDetention of imported goods - Gold - smuggling - prohibited item - absolute confiscation - onus to prove - Held that - Section 123 of the Customs Act, 1962 is made applicable to Gold through Sub-section (2) of Section 123 of the said Act and the said Section provides that if the goods to which said Section is made applicable are seized under the reasonable belief that they are smuggled goods than the burden to prove that the goods are not of smuggled nature was on the person from whose possession the goods were seized or the person who claims the ownership of the same. Though the appellant has shown that he purchased the said gold from M/s Bilasa & Sons Pvt. Ltd., Delhi vide tax invoice dated 07/07/2014 and another dated 11/07/2014 and M/s Bilasa & Sons Pvt. Ltd., Delhi have proved that they had purchased said Gold from M/s Supreme Gold, Delhi vide invoice dated 07/07/2014 and further that Supreme Gold, Delhi have proved that they had purchased said gold from M/s H.H.E.C. of India who had imported and got said gold cleared through Bill of Entry No. 5913058 dated 25/06/2014 in the said Show Cause Notice. The appellant have discharged burden to establish that the Gold under seizure was legitimately possessed by them and the same was legitimately cleared through filing Bill of Entry and payment of Customs duty as required under Section 123 of the Customs Act, 1962. Therefore, we find that the said Show Cause Notice dated 09/01/2015 is not tenable in law. As a result, we set aside the impugned Order-in-Original dated 27/11/2015 and held that appellant is entitled for release of said Gold under seizure within a period of 21 days. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Jurisdiction of Single Member Bench. 2. Legitimacy of the seized gold. 3. Compliance with Section 123 of the Customs Act, 1962. 4. Confiscation of the vehicle used for transporting the gold. 5. Validity of the Show Cause Notice. Detailed Analysis: 1. Jurisdiction of Single Member Bench: The Hon’ble High Court of Allahabad found that the matter was beyond the jurisdiction of the Single Member Bench of the Tribunal in terms of Section 129C of the Customs Act, 1962. Consequently, the High Court set aside the Final Order No.70267/2017 dated 20/01/2017 and remanded the matter back to the Tribunal for a fresh decision on merits by a Division Bench. 2. Legitimacy of the Seized Gold: The appellant M/s AIMR Jewels Pvt. Ltd. was engaged in the trade of gold and silver. On 11/07/2014, 12 Kg of gold was seized by the Commercial Tax Department of Uttar Pradesh and subsequently detained by the Customs Department. The gold was being transported from Chandni Chowk, New Delhi to Agra under a valid Challan. The appellant provided a road permit, which was initially not produced by the driver at the time of interception but was later submitted to the authorities. The appellant established the purchase of the gold from M/s Bilasa & Sons Pvt. Ltd., which in turn had purchased it from Supreme Gold, who had imported it from M/s HHEC. The entire trail of lawful import and payment of customs duty was documented through various traders and banking channels. 3. Compliance with Section 123 of the Customs Act, 1962: Section 123 of the Customs Act, 1962 places the burden of proof on the person from whose possession the goods are seized to prove that they are not smuggled. The appellant provided evidence of the lawful purchase and import of the gold. However, the Revenue contended that the gold bars bore the mark 'VALCAMBI SUSSIE' instead of 'AL ETIHAD' as mentioned in a certificate dated 04/08/2014 from M/s INTL Commodities DMCC. The Tribunal found that the certificate was not a relied upon document in the Show Cause Notice, and thus, the appellant had discharged the burden of proof under Section 123. 4. Confiscation of the Vehicle: The vehicle used for transporting the gold was also detained and subject to confiscation under Section 115(1)(a) and 115(2) of the Customs Act, 1962. The Tribunal did not provide a separate analysis on the confiscation of the vehicle, focusing instead on the legitimacy of the gold. 5. Validity of the Show Cause Notice: The Show Cause Notice dated 09/01/2015 was based on the contention that the gold was of smuggled nature due to the discrepancy in the brand names. The Tribunal found that the certificate dated 04/08/2014, which mentioned the brand name 'AL ETIHAD', was not a relied upon document for issuing the Show Cause Notice. Therefore, the Tribunal concluded that the appellant had established the legitimate possession of the gold, and the Show Cause Notice was not tenable in law. Conclusion: The Tribunal set aside the impugned Order-in-Original dated 27/11/2015, holding that the appellant is entitled to the release of the seized gold within 21 days from the receipt of the order. The appeal was allowed, and the Show Cause Notice was deemed not sustainable.
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