2019 (8) TMI 1005 - AT - Customs

Smuggling - Gold Bars - It appeared to revenue that the said gold was smuggled in to India from Nepal through off-route in violation of Notification No.09/1996-Cus dated 22.01.1996 and therefore, the said gold was liable for absolute confiscation - penalties - HELD THAT - The appellants had produced documents through which appellants obtained legal possession of gold within India. Neither the investigating agency produced any evidence on inquiry from Embassy of India in Kathmandu, Nepal nor they have produced any evidence of the so called off-route taken by the appellant to allegedly smuggle gold into India from Nepal. Further, the Original Adjudicating Authority has not caused any inquiry with M/s Saakshi Securities Ltd. and without causing any investigation with M/s Saakshi Securities Ltd. who had issued documents to the appellants for legally handing over the gold to them simply did not accept the documents only for the reason that they were not produced before the investigating authorities. It was obvious that the documents were produced before the Original Adjudicating Authority as evidence of legal possession of gold by the appellants. The Original Adjudicating Authority has rejected the documents only for the reason that they were not produced before the investigating authorities - We are constrained to observe that the Original Adjudicating Authority has not understood the process of adjudication. Since it has not been established that the documents issued by M/s Saakshi Securities ltd. for handing over 8 Kgs gold to Shri Vinod Kumar Verma are not fake and also it has not been established that said gold was brought into India through off-route, we do not find any merit in upholding the impugned order. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Legality of the confiscation of 8 kg gold bars.
2. Legality of the confiscation of the vehicle.
3. Imposition of penalties on the appellants.
4. Validity of the evidence provided by the appellants.

Detailed Analysis:

1. Legality of the confiscation of 8 kg gold bars:
The appellants contested the confiscation of the gold bars, claiming legal ownership. The Original Adjudicating Authority presumed the gold to be of third-country origin and smuggled into India from Nepal, thus liable for confiscation under Section 111(b) & (e) of the Customs Act, 1962. The appellants provided documents showing the gold was purchased from M/s Saakshi Securities Ltd. through an auction. The Authority rejected these documents as they were not presented during the investigation. However, the Tribunal noted that the documents were not proven fake, and no evidence was provided by the investigating agency to substantiate the claim of smuggling. Therefore, the Tribunal found no merit in upholding the confiscation order.

2. Legality of the confiscation of the vehicle:
The vehicle was confiscated under Section 115 of the Customs Act, 1962, with an option to redeem it for a fine. The Tribunal did not specifically address the legality of the vehicle's confiscation in detail, but the overall judgment to set aside the impugned order implies that the confiscation of the vehicle was also not upheld.

3. Imposition of penalties on the appellants:
Penalties were imposed on the appellants under Section 112 (a) & (b) of the Customs Act, 1962, ranging from ?5,00,000 to ?30,00,000. The Tribunal found that the Original Adjudicating Authority decided against the appellants based on statements recorded under Section 108 of the Customs Act, which were retracted. The Tribunal noted that the Authority did not verify the documents provided by the appellants nor conducted any inquiry with M/s Saakshi Securities Ltd. Therefore, the penalties imposed were not justified.

4. Validity of the evidence provided by the appellants:
The appellants provided documents showing the gold was legally purchased from M/s Saakshi Securities Ltd. The Original Adjudicating Authority rejected these documents due to their late submission. The Tribunal criticized this approach, emphasizing the need for proper adjudication and verification of the documents. The Tribunal found that the documents were not proven fake, and no evidence supported the claim that the gold was smuggled. Therefore, the evidence provided by the appellants was valid and should have been considered.

Conclusion:
The Tribunal set aside the impugned order, allowing the appeals and thereby nullifying the confiscation of the gold and the vehicle, and the imposition of penalties. The judgment emphasized the importance of proper verification and consideration of evidence in adjudication processes.