2024 (3) TMI 1052 - AT - Customs

Smuggling - seizure of three cut pieces foreign origin gold totally weighing 1000 gms - Validity of Show cause notice issued - limitation - burden of prove - Confiscation - Penalty - HELD THAT - Admittedly, it is the case of town seizure as the appellant was intercepted in the domestic terminal at Hyderabad. The only evidence brought on record by Revenue as to the smuggled nature of goods is firstly, that the three pieces of gold have got markings indicated their foreign origin and secondly, the statement of the appellant that he is aware that he has purchased gold at Hyderabad, which is of smuggled in nature and the same has been purchased without any invoice/bill/receipt. From the tenor of the statement recorded from the appellant, its voluntary nature is doubtful as no person of ordinary prudence will state that the gold he is possessing is of smuggled in nature. I further find that it has been held by the Hon ble Supreme Court in Vinod Solanki vs UOI 2008 (12) TMI 31 - SUPREME COURT that where the accused/noticee disputes the voluntary nature of his statement, the onus is on Revenue to prove the voluntary nature of the statement recorded. Thus, the statement as recorded of the appellant on 01.02.2020 is not voluntary in nature. The SCN is bad and hit by limitation as the same has been issued after more than six months from the date of seizure as required u/s 110(2) of the Act. In this view of the matter, the appeal is allowed and the impugned order is set aside. Accordingly, the gold in question shall be released to the appellant forthwith, and if already sold, to return the sale proceeds, with interest as per Rules. The appeal is allowed in the aforementioned terms.

Issues Involved:

1. Voluntariness of the appellant's statement.
2. Validity of the seizure and confiscation under the Customs Act.
3. Issuance of Show Cause Notice (SCN) beyond the prescribed period.
4. Burden of proof regarding the licit acquisition of gold.

Summary:

1. Voluntariness of the appellant's statement:
The appellant contested the SCN, disputing the voluntariness of his statement recorded at the time of seizure, alleging it was given under undue influence and duress. The Tribunal found the statement's voluntary nature doubtful, stating, "no person of ordinary prudence will state that the gold he is possessing is of smuggled in nature." The Tribunal referenced the Supreme Court's ruling in Vinod Solanki vs UOI, emphasizing that the onus is on Revenue to prove the voluntary nature of the statement when disputed.

2. Validity of the seizure and confiscation under the Customs Act:
The appellant argued that the seizure was not valid as there was no proper seizure order/memo issued, and the act of taking possession of gold by the Customs officers u/s 110 does not amount to seizure. The Tribunal noted that the case was a "town seizure" as the appellant was intercepted at the domestic terminal. The only evidence of the smuggled nature of the gold was the foreign markings and the appellant's statement, which was found not to be voluntary. The Tribunal held that the statement recorded on 01.02.2020 was not reliable for the purpose of confiscation proceedings.

3. Issuance of Show Cause Notice (SCN) beyond the prescribed period:
The appellant argued that the SCN was issued beyond the period of six months from the date of seizure, violating Sec 110(2) of the Act. The Tribunal found that the SCN was indeed issued after more than six months from the date of seizure, making it "bad and hit by limitation." The Tribunal referenced the ruling in Ulla Baig vs CC, Bangalore, where it was held that SCN must be served within six months from the date of seizure.

4. Burden of proof regarding the licit acquisition of gold:
The appellant stated that he had purchased the gold pieces in question at Hyderabad for selling in Mumbai at a profit and that gold is freely available in India. The Tribunal noted that the Revenue had not brought any evidence on record as to the smuggled nature of the gold in question. The Tribunal held that the burden of proof under Sec 123 of the Act lies on the person from whose possession the goods are seized or the person who claims ownership, not on the department.

Conclusion:
The Tribunal allowed the appeal, setting aside the impugned order. It directed that the gold in question be released to the appellant forthwith, or if already sold, the sale proceeds be returned with interest as per Rules. The appeal was allowed on the grounds that the SCN was issued beyond the prescribed period, and the statement recorded was not voluntary.

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