2024 (10) TMI 1188 - AT - Customs

Confiscation - penalty - Interception of certain consignments in the Air Cargo Complex Hyderabad which were being carried by the Courier companies - burden to prove - deatils not considered properly before passing impuned order - violation of principles of natural justice - HELD THAT - The entire case is decided by the Adjudicating Authority in a very cryptic manner without going into detail as far as the defence taken by the appellant is concerned. One of the major point which appellants have been claiming is that the gold in question was procured from legitimate source as also supply of the gold was being made as a legitimate business transaction. This aspect has not been dealt with at all by the Adjudicating Authority and very cryptic remark has been made to dismiss the defence. The claim that it s a remelted gold and that duty paid invoice has been given to Courier company has also not been examined. When in a statement recorded under Section 108 of Customs Act 1962 someone gives evidences it has to be carefully evaluated and it s authenticity or otherwise has to be examined. The Adjudicating Authority should have examined all the documents and submissions and then taking up the issue of authenticity with regard to the claim that the gold were procured from legitimate source following prescribed procedure before coming to the conclusion that the said gold was of foreign origin. It is also on record that when the assayer has made a disclaimer that he is not in a position to say whether gold is of foreign origin or otherwise how Commissioner (Appeals) can say that he has certified the gold to be of foreign origin. A cryptic common and general order passed for all the persons without appreciating factual matrix and evidence adduced by each of the appellants would not be correct and may tantamount to nonapplication of mind. In the present case the impugned order is clearly not a speaking order nor it appears to have followed the principles of nature justice in true spirit of the doctrine. The matter is required to be remanded back to the Original Adjudicating Authority - Appeal allowed by way of remand.

Summary

Issues:
Interception of consignments carrying foreign marked gold, confiscation under Customs Act and CGST Act, burden of proof on the appellant, evaluation of evidence, violation of principles of natural justice, decision-making process of the Adjudicating Authority, appeal process before Commissioner (Appeals), remand to Original Adjudicating Authority.

Analysis:
The case involved the interception of consignments at the Air Cargo Complex, Hyderabad, suspected of carrying foreign marked gold, leading to confiscation under the Customs Act and CGST Act. The Original Adjudicating Authority upheld the confiscation, citing the appellant's failure to provide substantial evidence regarding the gold's origin and procurement, as required under Section 123 of the Customs Act. The Authority dismissed the appellant's defense, emphasizing the lack of proper documentation and proof of legitimate procurement. The Adjudicating Authority's decision was criticized for being cryptic and not adequately addressing the appellant's claims, leading to a violation of principles of natural justice.

The appellant contended that the Department lacked sufficient evidence to establish the gold's foreign origin, citing a disclaimer in the assayer's report. The appellant claimed the gold was intended for legitimate business transactions with specific invoices, which were not presented during the consignment inspection. The Adjudicating Authority's failure to thoroughly examine the appellant's defense and the authenticity of their statements under Section 108 of the Customs Act was highlighted, suggesting a lack of adherence to procedural fairness.

The Commissioner (Appeals) affirmed the Original Authority's decision without adequately addressing the appellant's defense, leading to a further challenge on the grounds of principles of natural justice violation. The Commissioner's order was criticized for its cryptic nature and reliance on generalized statements, rather than a detailed evaluation of individual evidence. The lack of a speaking order and failure to follow the principles of natural justice were emphasized, prompting the decision to remand the case back to the Original Adjudicating Authority for a thorough reevaluation.

The judgment concluded by setting aside the Commissioner (Appeals) decision and remanding the case to the Original Adjudicating Authority for a comprehensive review within a specified timeframe, emphasizing the importance of procedural fairness and detailed examination of evidence in cases involving serious charges like smuggling. The decision highlighted the necessity of a speaking order and adherence to principles of natural justice in reaching a just outcome.