2017 (10) TMI 36 - AT - Customs

Confiscation of seized Gold - penalty - Held that - 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 - SCN not sustainable - confiscation and penalty set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Appeal arising from common Order-in-Original
- Application of Section 123 of the Customs Act, 1962
- Burden of proof in case of seized goods
- Validity of Show Cause Notice
- Appeal outcome and penalties imposed

Analysis:

1. Appeal arising from common Order-in-Original:
The judgment involves three appeals arising from a common Order-in-Original dated 27.11.2015. The appellants include the Director of a company and individuals associated with a car under seizure.

2. Application of Section 123 of the Customs Act, 1962:
The Division Bench analyzed the application of Section 123 of the Customs Act, 1962 to the seized goods. It was noted that the burden to prove that the goods were not of smuggled nature rested on the person from whose possession the goods were seized or the person claiming ownership.

3. Burden of proof in case of seized goods:
The appellants successfully established a legitimate chain of possession for the seized gold, tracing it back to the original import through proper documentation. The Division Bench found that the appellant had discharged the burden to establish the legitimacy of the gold under seizure.

4. Validity of Show Cause Notice:
The Division Bench scrutinized the contents of the Show Cause Notice, particularly focusing on the reliance placed on a specific certificate dated 04/08/2014. It was determined that the certificate was not a relied-upon document as per the Show Cause Notice, leading to the conclusion that the Notice was not tenable in law.

5. Appeal outcome and penalties imposed:
Based on the findings in the main appeal of the company, the penalties imposed on the individual appellants were deemed not maintainable. Additionally, the confiscation of the car owned by one of the appellants was set aside, with directions for its immediate release by the Customs Authority.

In summary, the judgment delves into the intricacies of burden of proof in cases of seized goods under the Customs Act, emphasizing the importance of proper documentation and tracing the legitimate possession of goods. The analysis of the Show Cause Notice and subsequent appeal outcomes highlight the meticulous scrutiny applied by the Division Bench in arriving at a just decision.