2014 (6) TMI 25 - AT - Central Excise

Confiscation of Indian Currency - As per Revenue, the said currency is the sale proceeds of gutka - clandestine removal - Held that - For confiscating the currency in terms of Section 121 of Customs Act, 1962, which stands made applicable to the Central Excise law, it has to be first concluded that the same was actually the sale proceeds of the clandestinely sold excisable goods - before confiscating the currency, the Revenue must establish that there was by sale; that the sale was of smuggled goods; that the sale was a person having knowledge reason to believe that the goods were smuggled origin; that the identity of the seller and buyer must be established by the customs authorities. If all the above ingredients of Section 121 are not established by the Revenue, the violation of Section 121 cannot be made out. The said decision stands followed in a number of subsequent decisions and it stands held that in the absence of any evidence to establish the Indian currency as sale proceeds of tainted goods, the benefit has to be extended to the appellant - onus to prove that the Indian currency in question is the sale proceeds of the clandestinely removed goods is upon the Revenue, which is required to be discharged by production of affirmative, tangible and positive evidences. Apart from the fact of recovery of Indian currency and the retracted statement of the appellant, there is virtually no evidences to indicate that the said currency is the sale proceeds of clandestinely removed goods, which the appellant had, in any case stopped manufacturing with effect from November, 2006 - Decided in favour of assessee.

Summary

Issues:
Challenge to absolute confiscation of Indian currency as sale proceeds of smuggled goods.

Analysis:
The judgment pertains to the challenge against the absolute confiscation of Indian currency amounting to Rs.3,22,540 recovered from the residential premises of the appellants. The Revenue alleged that the currency represented the sale proceeds of gutka, which the appellants were manufacturing until November 2006. The appellant initially admitted during investigations that the currency was indeed from the sale of smuggled goods. However, the appellant retracted this statement the next day, claiming that the currency was related to their new medical store business, as they had ceased gutka manufacturing in November 2006.

The proceedings resulted in the absolute confiscation of the currency under Section 121 of the Customs Act, 1962, which is applicable to Central Excise law. The Tribunal discussed the legal requirements for confiscation in the case of Ramachandra Vs. Collector of Bombay, emphasizing the need for establishing various elements, including the sale of smuggled goods, knowledge of the seller, and positive evidence linking the currency to the illicit goods. The Tribunal cited precedents like Malar Vs. Collector of Customs & Central Excise, Trichy, and Pandit DP Sharma Vs. CCE, Calcutta, which underscored the Revenue's burden to prove the currency's origin through concrete evidence.

The presiding judge, Mrs. Archana Wadhwa, analyzed the evidence and found insufficient proof linking the confiscated currency to the clandestinely removed goods, especially since the appellant had ceased gutka manufacturing well before the currency's recovery. Consequently, the judge set aside the impugned order and allowed the appeal, providing consequential relief to the appellant.