2021 (1) TMI 819 - AT - Customs

Smuggling - Prohibited Goods - Gold - foreign origin goods or not - presumption under section 123 of Customs Act - HELD THAT - Admittedly the seized gold coins are of Indian origin even the approved valuer have not certified the seized gold coins as of foreign origin. Further, it is found that the inscription on the coins evidently prove that the gold coins are of Indian origin, and were part of the monetary system and were in circulation during the British India period. Admittedly, Kind Edward VII, was the emperor of U.K. and India was under British Rule during the relevant period, and thus there is no anomaly as to the Indian origin of the gold coins. The allegation by Revenue that the gold coins are of foreign origin has got no basis, and is a wild guess work. The inscription on the gold coins ipso fact prove that the gold coins as are of Indian origin. The impugned order is vitiated for placing selective reliance on the statement of appellant under Section 108 - also the presumption in favour of Revenue under Section 123 is not attracted in the facts and circumstances. Appeal allowed.

Issues Involved:
1. Legality of possession and importation of 151 gold coins.
2. Applicability of Section 123 of the Customs Act, 1962.
3. Classification and origin of the gold coins.
4. Validity of the confiscation order under Section 111(d) & (i) of the Customs Act, 1962.
5. Imposition of penalty under Section 112 of the Customs Act, 1962.

Detailed Analysis:

1. Legality of Possession and Importation of 151 Gold Coins:
The appellant, an MBA residing in the UK, was detained at the New Delhi airport with 151 gold coins and 2 gold bangles. The appellant asserted that the gold coins were a gift from his father-in-law during his marriage in 2011 and were taken to the UK for obtaining a loan against gold. Upon returning to India, he did not declare the coins, believing it was unnecessary. The Revenue contended that the appellant failed to produce documents proving the legal possession of the gold coins, leading to their confiscation under the Customs Act.

2. Applicability of Section 123 of the Customs Act, 1962:
The Revenue argued that under Section 123, the onus was on the appellant to prove the licit possession of the gold coins. The appellant contended that the coins were of Indian origin from the British period and thus not subject to smuggling allegations. The Tribunal found that the presumption under Section 123 was not applicable, as the coins were of Indian origin.

3. Classification and Origin of the Gold Coins:
The appellant provided historical context, stating that the coins were from the British India period (1902-1910) and featured inscriptions indicating their Indian origin. The Tribunal noted that the coins' inscriptions and historical significance supported the claim of Indian origin. The Revenue's assertion of foreign origin was deemed baseless and speculative.

4. Validity of the Confiscation Order under Section 111(d) & (i) of the Customs Act, 1962:
The Tribunal reviewed the confiscation order, which was based on the assumption that the coins were smuggled. The appellant's evidence, including marriage certificates and affidavits, supported the claim that the coins were family heirlooms. The Tribunal found that the confiscation order was vitiated by selective reliance on the appellant's statements and lacked substantial evidence of foreign origin.

5. Imposition of Penalty under Section 112 of the Customs Act, 1962:
The original order imposed a penalty of ?5 lakhs on the appellant for alleged illegal importation. The Tribunal, however, concluded that the coins were of Indian origin and not smuggled goods. Consequently, the penalty was found to be unjustified.

Conclusion:
The Tribunal set aside the impugned order, finding that the gold coins were of Indian origin and not subject to smuggling allegations. The appellant's appeal was allowed, and the Revenue authority was directed to return the gold coins within 45 days.

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