2019 (10) TMI 382 - HC - Customs

Smuggling - Gold Jewellery - reliance on the un-retracted statement - burden to prove the fact that the goods are not smuggled - section 123 of CA - HELD THAT - Being a notified item, the burden to prove that the gold jewellery was not smuggled, was on the respondent. Though the appellant maintained that he had purchased the gold within India, the identity of the purchaser remain undisclosed during investigation as well as during adjudication, and it was only at the stage of appeal, before the Commissioner (Appeals) that the appellant belatedly produced documents, purportedly invoices whereunder he had purchased the gold - There is no explanation forthcoming as to why, if, in fact, the gold had been purchased by the appellant within India, the aforesaid invoices were not available with the respondent till the stage of appeal. The belated explanation of the respondent, at the stage of appeal, that the gold had been sold to him in India, and was intended to be given to some undisclosed person in Mumbai, is too facile to merit acceptance - We are, therefore, persuaded to believe the un-retracted confessional statement of the respondent under Section 108 of the Act that, in fact, he had smuggled the gold from Dubai. The seized goods are smuggled goods - the substantial questions of law are, therefore, answered in favor of the Revenue and, against the respondent.

Summary

Issues:
- Whether the Ld. CESTAT failed to appreciate the reliance on evidences not produced during investigation?
- Whether the onus of proving goods are not smuggled falls under Section 123 of the Customs Act?
- Whether the statement of the Respondent under Section 108 of the Customs Act was corroborated by circumstantial evidences?

Analysis:

1. The respondent was found with four packets of gold jewellery, weighing 2.015 kgs and valued at ?47,55,400, allegedly concealed in his underwear. The seizure took place on 1st February, 2013, at Hazrat Nizamuddin Railway Station, along with evidence of his travel from Dubai to New Delhi on the same day.

2. The respondent admitted in a statement under Section 108 of the Customs Act that the seized gold jewellery was brought from Dubai, given to him by individuals from a gold jewellery shop for delivery to Mumbai.

3. A Show Cause Notice was issued to the respondent, leading to an Order-in-Original confiscating the gold and imposing a penalty. The respondent appealed to the Commissioner of Customs (Appeal) who reversed the original order.

4. The Revenue appealed to the CESTAT, which dismissed the appeal based on the lack of conclusive evidence of smuggling, especially considering the invoices produced by the respondent for the purchase of gold within India.

5. The High Court analyzed the burden of proof under Section 123 of the Customs Act, placing it on the respondent to prove the gold was not smuggled. The court noted the circumstances of the seizure and the respondent's confession of smuggling.

6. The court found the respondent's explanation of purchasing the gold within India unconvincing, especially due to the delayed production of invoices and lack of disclosure of the seller or recipient. The court emphasized the need for a common-sense approach in such cases.

7. Referring to legal precedents, the court concluded that the respondent failed to discharge the burden of proving licit possession of the seized gold. The court upheld the appeal by the Revenue, ruling in their favor against the respondent.

8. Ultimately, the court answered the substantial questions of law in favor of the Revenue, allowing the appeal and disposing of the case accordingly.