2003 (4) TMI 167 - AT - Customs

Summary

Issues involved: Appeal against order-in-appeal affirming confiscation of gold biscuits and penalty imposed by Commissioner of Customs (Appeals).

Details of the Judgment:

Issue 1: Seizure of Gold
The Police officers made seizure of various gold items from the premises of M/s. Jai Saraswati Refinery Works and from the possession of the appellant No. 1. The seized gold included gold biscuits with different markings, gold rods, gold lumps, and cut pieces. The Police handed over the gold to the Superintendent of Customs under a proper panchnama on the belief that it was smuggled gold. Show cause notice was issued proposing confiscation of the gold and imposition of penalty on the appellants. Appellant No. 1 claimed legal acquisition of the gold, while the other two appellants denied involvement. The adjudicating authority ordered confiscation and imposed penalties, which was affirmed by the Commissioner (Appeals).

Issue 2: Presumption of Smuggled Gold
The initial seizure was made by the Police, and later the Superintendent of Customs verified the purity of the gold. The presumption of the gold being smuggled under Section 123 of the Customs Act was not applicable, as established by legal precedents. The burden was on the Department to prove the gold was smuggled, which was not supported by tangible evidence. Statements made before the police were deemed inadmissible as legal evidence. The appellant provided proof of legal acquisition of the gold, which was corroborated by the seller. The authorities below wrongly ignored this evidence.

Issue 3: Legal Acquisition of Gold
The proof of legal acquisition of the gold by appellant No. 1 was found to be acceptable, especially considering gold was freely importable at the time. No evidence was presented to prove the gold was smuggled. The findings of the authorities regarding the smuggled nature of the gold were deemed baseless. The requirement of a License for importing gold was irrelevant as the appellant claimed to have purchased it, not imported it.

Issue 4: Involvement of Other Appellants
There was no reliable evidence linking the other two appellants to the seized gold. Both appellants denied their involvement, and the father of appellant No. 1 also stated he had no connection with the gold. The impugned order of the Commissioner (Appeals) was set aside, and the appeals of the appellants were accepted.

This judgment highlights the importance of providing tangible evidence in cases involving the seizure of goods and the burden of proof on the authorities to establish illegal activities.