2023 (9) TMI 876 - HC - Customs

Applicability of Section 123 of the Customs Act, 1962 - shifting the burden of proof of licit import of subject goods on the Appellant when the gold bullion was seized under Section 132 of Income Tax Act, 1962 - goods were not seized by the proper officer of Customs under Section 110 Customs Act, 1962 on the belief that the goods were of smuggled nature - production of invoices or not - authenticity of the invoices - HELD THAT - The appellant had submitted documents to show the source from where he had purchased the gold. The CESTAT has held that the Invoices were produced while replying to the show-cause notice. Therefore, the Department could not investigate the authenticity of the Invoices. Admittedly, the invoices were available before passing the Order-in-Original. The Customs Department has all the authorized to summon and investigate into the matter. CESTAT is the last fact finding authority. Therefore, the CESTAT ought to have satisfied itself with regard to authenticity of Invoices before pronouncing judgment on the appeal. In that view of the matter, it is deemed appropriate to remit the matter to the file of CESTAT with a direction to record its satisfaction with regard to the authenticity of invoices by calling for Report from the Additional Commissioner of Customs, if required and thereafter consider the appeal on its merits. Appeal on remand.

Summary

Issues Involved:
The judgment involves the following Issues:
1. Interpretation of Section 123 of the Customs Act, 1962 regarding burden of proof in the case of seized goods.
2. Examination of the authenticity of purchase invoices in proving licit import of goods.
3. Application of judicial precedents in cases where goods were not seized by Customs Officers under the Customs Act.

Issue 1:
The first issue pertains to the interpretation of Section 123 of the Customs Act, 1962 in a case where gold bullion was seized by the Income Tax Department under Section 132 of the Income Tax Act, not by the Customs Officers. The appellant argued that the burden of proof of licit import should not shift to them in such circumstances. The Additional Commissioner of Customs had ordered confiscation of certain gold bars with foreign markings and imposed a penalty, which was upheld by the CESTAT. The appellant contended that they had submitted documents to prove legitimate purchase from specific jewellers, but the CESTAT held that the authenticity of the invoices was not verified due to the timing of their submission. The High Court directed the CESTAT to ensure the authenticity of the invoices before making a judgment.

Issue 2:
The second issue revolves around the examination of the authenticity of purchase invoices in establishing licit import of goods. The appellant had provided invoices from jewellers to prove the source of the gold, but the CESTAT questioned the timing of their submission, stating that the Customs authorities had no opportunity to investigate. The High Court emphasized that the invoices were available before the original order was passed, and the Customs Department had the authority to investigate. The Court directed the CESTAT to verify the authenticity of the invoices before proceeding with the appeal.

Issue 3:
The final issue concerns the application of judicial precedents in cases where goods were not seized by Customs Officers under the Customs Act. The appellant argued that Section 123 of the Customs Act should not apply in such situations. The High Court did not provide a specific ruling on this issue but directed the CESTAT to ensure the authenticity of the invoices before making a decision. The Court remitted the matter back to the CESTAT for further consideration based on the verification of the invoices.

This judgment highlights the importance of verifying the authenticity of documents, such as purchase invoices, in cases involving the import of goods and the burden of proof in seizure cases under the Customs Act.