1997 (8) TMI 260 - AT - Customs

Summary

Issues Involved:
1. Legality of the search conducted on M/s. S.C. Dey & B.N. Sil & Co.
2. Confiscation of three gold lumps.
3. Confiscation of 24 pieces of Sovereign (Akbari Mohar/Guinea).
4. Confiscation of Indian Currency amounting to Rs. 4.5 lakhs.
5. Imposition of penalties on the appellants.

Detailed Analysis:

1. Legality of the Search Conducted on M/s. S.C. Dey & B.N. Sil & Co.:
The appellants argued that the search was conducted without proper Search Warrants issued by the proper Officer, rendering the search illegal. The learned Advocate submitted that the goods recovered based on the said search should be returned to the appellants without further delay. This issue raised questions about the procedural correctness of the customs officers' actions during the search and seizure process.

2. Confiscation of Three Gold Lumps:
The appellants contended that the three gold lumps were not of foreign origin as there was no marking indicating such, and the purity was less than 99.99%. The Assay Report indicated purities of 97.9% and 97.65%, which the appellants argued were consistent with gold made from old ornaments. The appellate authority initially concluded that the gold lumps were of foreign origin based on their purity. However, the judgment found that the purity levels did not conclusively indicate foreign origin, referencing the High Court of Calcutta's decision in Shamlal Sen Private Ltd. v. Additional Collector of Customs, which held that fineness alone could not establish foreign origin. Consequently, the confiscation of the three gold lumps was deemed unjustified.

3. Confiscation of 24 Pieces of Sovereign (Akbari Mohar/Guinea):
The appellants claimed that the 24 pieces of Sovereign were legal tender and personal property of the firm's partners. The appellate authority had doubts about the personal ownership due to the lack of documentation indicating ownership. However, the judgment referenced the Delhi High Court's decision in Daga Commercial Corporation Pvt. Ltd. v. Union of India, which stated that presumption of smuggling could not be drawn from fineness alone. There was no evidence to suggest that the Sovereigns were smuggled, leading to the conclusion that the confiscation was unwarranted.

4. Confiscation of Indian Currency Amounting to Rs. 4.5 Lakhs:
The appellants argued that the Department failed to produce evidence proving that the seized currency was the sale proceeds of smuggled gold. They cited Tribunal decisions emphasizing that the burden of proof lay heavily on the Department. The Department's reliance on initial statements and the absence of the claimed owner, Shri Swapan Kamilla, was insufficient to establish the currency's tainted nature. The judgment reiterated the necessity for the Department to provide tangible evidence, which was lacking in this case, resulting in the order to release the Indian Currency to the appellants.

5. Imposition of Penalties on the Appellants:
Given the success of the appeal on merits, the judgment found no basis for imposing penalties on the other appellants. The absence of evidence supporting the confiscations invalidated the grounds for penalties, leading to the conclusion that the appeals of the other appellants also succeeded with consequential reliefs.

Conclusion:
The appeal filed by M/s. S.C. Dey & B.N. Sil & Co. was allowed, with directions to release the three gold lumps, 24 gold Sovereigns, and Indian Currency amounting to Rs. 4.5 lakhs. The appeals of the other appellants were also allowed, resulting in the annulment of the penalties imposed.