2023 (7) TMI 664 - AT - Customs

Smuggling - Gold Bar - Indian Currency - corroborative evidence brought in by the Department to support their allegation or not - reasonable belief that the gold is of foreign origin, or not - HELD THAT - It is an admitted fact that the verification was conducted in the premises of the Appellant which is located in Kolkata which is not any border town of India. The Appellant has provided the details of Trade Licence of his Melting House, Profit Loss Account, Balance Sheet, Fixed Assets Schedule, Income Tax Returns etc. Out of the 12 pieces of gold found in the vault, only one piece was with marking of MELTER ASSAYER . There was no marking in the balance 11 pieces of gold bar. Therefore, on the basis of this one piece itself, the Department cannot come to a conclusion that all the 12 pieces are of foreign origin. When the Appellant has provided the details of his mother s address and has stated that he has given 330 grams of gold, it is seen that the Department has not carried out any verification to ascertain the veracity of this claim. The Department has also not made any efforts to verify the claims that he has undertaken melting works for various persons by making any enquiry from them. In the case of AADIL MAJEED BANDAY VERSUS C.C. AMRITSAR 2021 (5) TMI 282 - CESTAT CHANDIGARH , the Tribunal has held that revenue has failed to discharge that they are initial burden that on reasonable belief that the goods in question are smuggled goods. Further, it has been found that only market enquiry was done for valuation and purity of the goods in question. No fact has been brought on record by way of testing of the goods in question that the marking made on the goods are genuine or not. As no such investigation has been done to establish that the goods in question are of foreign origin, therefore, the provision of Section 123 of the Customs Act is not applicable to the facts of this case. Appeal allowed.

Summary

Issues:
The issues involved in the judgment are the confiscation of gold and currency found in the premises of the Appellant, imposition of penalty, and the allegation of dealing with foreign origin gold.

Confiscation of Gold and Currency:
The Department officials conducted physical verification at the Appellant's premises and recovered 12 pieces of gold and Indian currency. The Adjudicating Authority ordered the absolute confiscation of 499.800 grams of gold bar and Indian Currency of Rs.11,36,300/-, along with imposing a penalty of Rs. 2 Lakhs on the Appellant. The Commissioner (Appeals) upheld the order, leading to the appeal before the Tribunal.

Allegation of Dealing with Foreign Origin Gold:
The Appellant claimed that the gold and cash recovered were his own property, supported by statements and documents provided. The Appellant argued that the Department proceeded on assumptions without corroborative evidence to support the allegation of foreign origin gold. The Appellant's advocate cited relevant case laws to support the argument that the Department's actions lacked legal basis.

Tribunal's Decision:
After considering the submissions from both sides, the Tribunal found that the Department's actions were based on assumptions and presumptions without concrete evidence. The Tribunal highlighted that the Department failed to verify the Appellant's claims regarding the origin of the gold and the source of the seized cash. Citing precedents, including the cases of Aadil Majeed Banday and Nand Kishore Modi, the Tribunal set aside the order of the lower Authorities and allowed the appeal with consequential relief, emphasizing the lack of evidence supporting the Department's claim of dealing with foreign origin gold.