2019 (5) TMI 1356 - AT - Customs

Smuggling - Gold of foreign origin - recovery from her registered baggage - Confiscation - redemption fine - penalty - HELD THAT - The Indian Origin remolten gold/gold ornaments could not be legally confiscated as the possession of the same is not prohibited under any provision of law - In the present case, the seized gold do not bear foreign markings and do not have uniform weight/purity. It is observed that the respondent belongs to a respectable and a well to do family. She is also a regular Income Tax assessee. The seized gold rods were made from the gold ornaments belonging to her. Every piece of gold possessed by a person in India cannot be considered to be of smuggled nature and that the possessor of such gold cannot be made to discharge the onus u/s 123 of the Customs Act, 1962. Appeal dismissed - decided against Revenue.

Summary

Issues:
1. Seizure of suspected gold of foreign origin from a passenger at the airport.
2. Dispute over the origin and ownership of the seized gold.
3. Allegations of unjustified confiscation and penalty imposition by the Adjudicating Authority.
4. Legal interpretation of possession of gold under Customs Act, 1962.

Analysis:
1. The case involved the seizure of suspected gold of foreign origin from a passenger at the airport. The respondent, wife of an individual, was found carrying yellow metals suspected to be gold in rod form while traveling from Imphal to Kolkata. The gold was recovered from her registered baggage and handed over for further seizure formalities.

2. The respondent contended that the gold was not of foreign origin but actually gold ornaments received by her on her wedding. The gold did not bear foreign markings, and she claimed ownership of the gold, which was confirmed by the authorities. The respondent argued that the confiscation and penalty imposed were unjustified, presenting documents supporting her ownership of the gold.

3. The Adjudicating Authority had confiscated the gold based on suspicion of foreign origin, despite no concrete evidence supporting such a claim. The respondent highlighted that the gold did not have foreign markings, and its value was later found to be inferior quality, not matching primary gold standards. The respondent faced hardship due to the absolute confiscation and penalty imposition, which was deemed unwarranted.

4. Upon review, the Tribunal found that the seized gold, being Indian origin remolten gold/gold ornaments, could not be legally confiscated as possession was not prohibited under any law. The gold did not bear foreign markings and lacked uniform weight/purity. The respondent, belonging to a well-to-do family and a regular Income Tax assessee, possessed the gold made from her own ornaments. The Tribunal upheld settled legal principles, emphasizing that not all gold possessed in India could be deemed smuggled, and the burden of proof under the Customs Act, 1962, was not discharged in this case.

In conclusion, the Tribunal dismissed the appeal filed by the Revenue, sustaining the impugned order in favor of the respondent. The judgment clarified the legal interpretation of possession of gold under the Customs Act, emphasizing the need for concrete evidence to support allegations of foreign origin in such cases.