2023 (7) TMI 591 - AT - Customs

Smuggling or not - Town Seizure - Absolute Confiscation of gold - penalties - burden to prove - whether 3327.40 gms of gold can be absolutely confiscated without having any iota of evidence that the gold being smuggled in nature? - HELD THAT - In fact, it is a case of town seizure and the appellants were carrying job-work voucher with them in support of their claim. Moreover, the test report also certified that the purity of the gold is not up to the mark and the gold which is seized having no foreign marking to prove its foreign origin - In that circumstances, it is to be seen that can it be alleged that 3327.40 gms of gold is of foreign origin. Admittedly in the case in hand it is a case of town seizure and gold in question was not bearing any marking of foreign origin. Moreover, purity of the gold is also less than the purity of foreign origin gold. In that circumstances, the provision of section 123 of the Customs Act, 1962 are not attracted to allege that the 3327.40 gms of gold in question is smuggled one - Moreover, the statements recorded during the course of investigation have been retracted by the appellants during the course of adjudication by way of cross-examination, but no procedure has been followed in terms of section 138B of the Customs Act, 1962 to testify the statements recorded during the course of investigation, therefore, as held by the Hon ble Punjab Haryana High Court in the case of M/S JINDAL DRUGS PVT. LTD. AND ANOTHER VERSUS UNION OF INDIA AND ANOTHER 2016 (6) TMI 956 - PUNJAB HARYANA HIGH COURT and M/S AMBIKA INTERNATIONAL AND OTHERS VERSUS UNION OF INDIA AND ANOTHER 2016 (6) TMI 919 - PUNJAB AND HARYANA HIGH COURT , the statements are not reliable statements. In that circumstances the Revenue has failed to make out a case against the appellants, therefore, the impugned order qua absolute confiscation of 3327.40 gms of gold is liable to be set aside and penalty on the appellants are not imposable - appeal allowed.

Summary

Issues:
The judgment involves the imposition of penalties on the appellants and absolute confiscation of the gold recovered during a search.

Facts of the Case:
The case involved the interception of individuals at a railway station and the recovery of gold presumed to be of foreign origin. Statements were recorded, and a show cause notice was issued, alleging that the gold was smuggled into India from Myanmar. The matter was adjudicated, resulting in the absolute confiscation of the gold and imposition of penalties on the appellants.

Appellants' Submission:
The appellants argued that the gold was not of foreign origin as it was not seized at a port or airport, and the purity did not match that of foreign gold. They contended that the statements recorded during the investigation were not reliable and relied on legal precedents to support their case against the penalties and confiscation.

Revenue's Argument:
The Authorized Representative supported the impugned order, stating that the appellants failed to provide sufficient evidence to support their claim that the gold was not smuggled.

Judgment:
The Tribunal considered whether the gold could be confiscated without evidence of it being smuggled. They noted that the gold was seized in a town, lacked foreign markings, and had lower purity than foreign gold. Referring to a previous case, the Tribunal held that in the absence of evidence of smuggling, confiscation was not justified. The statements recorded during the investigation were found unreliable, and the Revenue failed to prove its case. Consequently, the confiscation of the gold was set aside, and no penalties were imposed on the appellants.

Conclusion:
The Tribunal ruled in favor of the appellants, ordering the release of the gold and determining that no penalties were to be imposed.