2024 (6) TMI 60 - AT - Customs

Smuggling Gold from Sri Lanka - Confiscation of Indian Currency and Seized Cars - Penalty - third party statements - Evidence - Onus to prove - criminal case against the appellants ended in acquittal - HELD THAT - There was nothing to suggest that gold of foreign origin was actually smuggled into the country other than the statements made which were retraced. Reasonable belief to seize the currency cannot be based on presumption. Allegations based on assumptions and presumptions have no legs to stand on. The impugned order has not addressed these legal issues satisfactorily. In fact the Order states that the appellants have not put forward any other documentary evidence to prove that they are not involved in the illicit transaction and hence rejects their appeal. This is a very strange situation in which the noticees of a town seizure are held guilty only because of their statements and their not possessing documents to prove their innocence, when the burden of proving the case rests with the department. We are thus hold that the department has not proved its allegations on the facts in issue beyond reasonable doubt and have not met the standard of proof of the preponderance of probability as required. The impugned order of the Commissioner Appeals is also similarly flawed as discussed and merits to be set aside. We hereby order the same. The appeals succeed. The appellants are eligible for consequential relief prayed for, as per law.

Summary

Issues Involved: Appeal against Order in Appeal No. 129 to 133/2016 dated 22.6.2016 passed by the Commissioner of Central Excise (Appeals - II), Trichy.

Summary:

Issue 1: Confiscation of Indian Currency and Seized Cars
The police handed over the appellants and others to Customs authorities with Indian currency and seized goods allegedly related to smuggled gold. The Customs authorities confiscated the currency and imposed penalties on the appellants. The appellants challenged this decision before the Tribunal.

Details: The appellants argued that the criminal case against them ended in acquittal, emphasizing the need for voluntary confessions. They raised concerns about the lack of evidence linking the seized currency to smuggled gold and the flaws in the investigation process. The appellants requested the return of the seized currency, cars, and penalty amounts.

Issue 2: Penalty Imposed on Appellants
The department contended that the appellants were directly involved in the illicit import and sale of gold. They argued that the confessional statements, recovery of sale proceeds, and retraction were sufficient evidence to uphold the penalties imposed on the appellants.

Details: The department highlighted the appellants' direct roles in the gold smuggling operation and the involvement of other individuals like the buyer of the gold. They emphasized the importance of the confessional statements and recovery of proceeds in justifying the penalties. The department urged the Tribunal to reject the appeals and uphold the penalties imposed.

Judgment:
The Tribunal noted the differing standards of proof in criminal and civil cases, emphasizing the need for the department to establish allegations beyond reasonable doubt. The Tribunal found the lack of direct evidence and reliance on statements problematic, especially without allowing cross-examination. Citing a previous High Court judgment, the Tribunal emphasized the need for corroborative evidence in adjudication proceedings. Ultimately, the Tribunal held that the department failed to meet the required standard of proof and set aside the impugned order, allowing the appeals and granting consequential relief to the appellants.

This summary provides a detailed breakdown of the issues involved in the legal judgment, highlighting the arguments presented by both parties and the Tribunal's decision based on the legal principles and evidence presented.