2023 (10) TMI 1005 - AT - Customs

Smuggling - foreign origin Gold - evidences available on record indicate that the goods seized in this case are smuggled in nature or not? - burden to prove - HELD THAT - The Commissioner has given a detailed finding as to why the seizes goods are not smuggled in nature. The gold seized were of 99.5 purity. There was no foreign marking available on the gold. In fact, they were in the shape of ornaments. The adjudicating authority has given a clear finding as to why the goods are not smuggled in nature - the findings of the adjudicating authority agreed upon. In order to seize the goods, there must be a reasonable belief that the goods are smuggled in nature. The provisions of section 123 of Customs Act are not applicable in this case. Accordingly, the impugned order passed by the adjudicating authority is legal and proper and it does not warrant any interference. Appeal of Revenue dismissed.

Summary

Issues Involved:
1. Whether the seized gold is smuggled in nature.
2. Applicability of Section 123 of the Customs Act, 1962 regarding the burden of proof.
3. Validity of the documents submitted by the respondents to prove the legal acquisition of the gold.

Summary:

1. Whether the seized gold is smuggled in nature:

The Department argued that the gold seized from Shri Maran Saha, which included 6 pieces of gold bangles, 16 pieces of gold sticks, and 1 piece of a gold chain strip, was smuggled. They contended that the gold was coated with a silver color substance to disguise its true nature and that the respondents failed to produce valid purity certificates from M/s Sidhanath Gold & Silver Refiner. They also alleged that the documents provided by the respondents were fabricated to cover up the smuggled nature of the gold.

However, the Commissioner found that the gold was not smuggled. The seized gold did not have any foreign markings and was in the form of ornaments. The respondents provided documents and statements from customers confirming the deposit of old gold for conversion into pure gold. The Commissioner noted that the investigation did not provide concrete evidence to prove that the gold was of foreign origin or smuggled.

2. Applicability of Section 123 of the Customs Act, 1962 regarding the burden of proof:

The Department claimed that the burden of proof u/s 123 of the Customs Act, 1962, lies on the respondents to prove that the seized goods were not smuggled. The Commissioner, however, concluded that the respondents had discharged their burden of proof by providing documentary evidence of legal acquisition and ownership of the gold. The Commissioner emphasized that the seized gold was of indigenous origin, and thus, the provisions of Section 123 were not applicable in this case.

3. Validity of the documents submitted by the respondents to prove the legal acquisition of the gold:

The Department questioned the authenticity of the documents provided by the respondents, including gold vouchers and cash memos. They argued that these documents were fabricated after the seizure to account for the gold. The Commissioner found that the documents were maintained for a considerable period and had interrelation and corroboration among them. The Commissioner also noted that the investigation did not provide sufficient evidence to prove that the documents were fabricated. The respondents provided bank statements and other documentary evidence supporting their claim of legal acquisition of the gold.

Conclusion:

The Tribunal upheld the findings of the Commissioner, agreeing that the seized gold was not smuggled and that the respondents had provided sufficient documentary evidence to prove legal acquisition. The provisions of Section 123 of the Customs Act, 1962, were deemed not applicable. The appeals filed by the Department were rejected, and the impugned order was upheld as legal and proper.