2022 (2) TMI 1022 - AT - Customs

Smuggling from Myamar - Gold Biscuits - the goods mentioned in the invoices did not match with the actual quantity of the detected goods - Appellant has produced sufficient evidence to support his contention that the seized goods are not liable for confiscation or not - levy of penalty under Section 112(b)(i) of the Customs Act, 1962 upon the Appellant - discharge of onus to prove - HELD THAT - The Adjudicating authority after having considered the documents produced by the Appellant has summarily held that the said documents were fabricated. However, there are no evidence available on record to support the finding in the adjudication order that the documents produced by the Appellant were fabricated. Had the Adjudicating authority suspected of such foul play, they could have easily examined the jewellers who had issued the invoices to the Appellant to establish the correct factual position. Therefore, the Appellant has produced sufficient evidence in support of its claim for ownership of 2158 gms of seized goods. The Revenue has failed to establish beyond reasonable doubt that the seized goods had indeed been smuggled from Myanmar. In order to hold that the seized goods are smuggled goods, the Revenue has sought to rely upon Order-in-Original No.CCP/NER/15/2019 dated 24.09.2019 to state that certain goods, being gold biscuits with KTS marking had been seized by the Customs authorities in another matter and the seized goods in the instant case having KTS marking ought to be from the same batch. However, we find it difficult to accept the contention of the Revenue in the absence of any expert report and/or pictorial evidence establishing any similarity between the goods seized and adjudicated vide Order-in- Original dated 24.09.2019 and the goods seized from the Appellant. Further, it may not be out of place to note that merely because two separate goods have similar markings, it is not sufficient to conclude that both such goods originated from the same place. In the instant case, the Appellant has produced receipts from Kanaram Tarachand Sons, jewelers in respect of 13 biscuits melted and converted by the Appellant. In view of the fact that the Adjudicating authority had the details of the jewelers in both cases, adjudicated vide Order-in-Original dated 24.09.2019 and the instant case, they could have easily examined the jewelers to establish whether the goods belonged to the same batch. However, unfortunately this exercise has not been carried out by the Adjudicating authority - the Appellant cannot be made to suffer for lapses on the part of the Adjudicating authority. Although there have been certain inconsistencies in the submissions made on behalf of the Appellant, the Adjudicating authority has failed to satisfy that the seized goods were goods brought from a place outside India, and therefore, the provisions under Section 111 of the Customs Act cannot be invoked - the Appellant has duly discharged the burden of proof under Section 123 of the Customs Act, 1962 - 2158 gms. of gold, being 13 gold biscuits of KTS marking, be released in favour of the Appellant after verifying the originals of the receipts and Vasihatnama produced by the Appellant before this Tribunal - Matter is remanded to the Adjudicating authority to issue a fresh Show Cause Notice to Mr. Vishal in respect of the remaining 1328 gms. of seized goods of which he has claimed ownership. Appeal allowed by way of remand.

Summary

Issues:
i) Whether the seized goods were smuggled from Myanmar.
ii) Whether the Appellant provided sufficient evidence to prevent confiscation of the goods.
iii) Whether the penalty under Section 112(b)(i) of the Customs Act, 1962 should be imposed.

Analysis:

i) Smuggling Allegation:
The Appellant was intercepted at the airport carrying 21 gold biscuits with specific markings. The Appellant claimed ownership of a portion of the gold and provided purchase invoices and a Will as evidence. The Adjudicating authority doubted the authenticity of the documents but failed to prove fabrication. The Revenue alleged smuggling based on similar markings to another case but lacked expert reports or pictorial evidence. The Tribunal found the Revenue's argument weak, emphasizing the lack of conclusive evidence linking the seized goods to smuggling from Myanmar.

ii) Evidence for Non-Confiscation:
The Appellant produced purchase invoices and a Will to support gold ownership claims. Despite doubts raised by the Adjudicating authority, the Tribunal noted the lack of evidence proving the documents were fabricated. The Appellant demonstrated legal acquisition of a significant portion of the seized gold, meeting the burden of proof under Section 123 of the Customs Act. Consequently, the Tribunal ruled in favor of the Appellant, ordering the release of the claimed gold.

iii) Penalty Imposition:
Regarding the penalty under Section 112(b)(i) of the Customs Act, the Tribunal's decision did not specifically address this issue in the judgment. It focused on ownership and smuggling allegations, leading to the release of a portion of the seized gold and a remand for further proceedings related to the remaining portion claimed by another individual.

In conclusion, the Appellant successfully defended against the smuggling allegations and provided sufficient evidence to support ownership claims, leading to the release of a portion of the seized gold. The Tribunal's decision highlighted the importance of conclusive evidence in customs cases and emphasized the burden of proof on authorities to establish smuggling beyond reasonable doubt.