2015 (1) TMI 1125 - HC - Customs

Confiscation of goods - Attempt to smuggle gold biscuits - at the point of import; import of gold was free - Held that - When the situation is that importation of gold was free, a higher onus was on the Revenue to prove that the gold bars, which were seized from the possession of the appellant, were illegally imported or smuggled . More so, when there was no dispute that the petitioner was carrying on the business of jewellers. Appellant was able to adduce some evidence regarding the legal source of the goods under Section 123 of the Customs Act, 1961 under which the petitioner had the burden of proof, since gold items were seized. But unfortunately the Revenue has not been able to disprove the facts brought on record by the petitioner. - tribunal was acting on no evidence and if an authority acts on no evidence, the High Court can exercise its powers under Article 226 of the Constitution of India to set aside an order. - Order of Tribunal is set aside - Decided in favour of assessee.

Summary

Issues:
1. Validity of the Tribunal's order dated 29th August, 2002 regarding the confiscation of gold bars.
2. Burden of proof on the Revenue to establish illegal importation of gold.
3. Consideration of evidence presented by the appellant in the form of purchase bills and stock register.
4. Application of Section 123 of the Customs Act, 1961 regarding burden of proof.
5. High Court's power under Article 226 of the Constitution of India to set aside orders based on no evidence.

Analysis:
The High Court of Calcutta, in this judgment, addressed the validity of the Tribunal's order dated 29th August, 2002, concerning the confiscation of gold bars. The Court noted that the import of gold was free at the time of the incident, placing a higher burden of proof on the Revenue to establish illegal importation. The Court emphasized that the Tribunal's reliance on the erasure of marks on the gold biscuits as an indication of illegal importation was insufficient. The Tribunal's finding that the appellant tampered with the marks on the gold biscuits, leading to confiscation, was deemed unjust as substantial proof was lacking before confiscation.

Furthermore, the Court highlighted that the evidence provided by the appellant, including purchase bills and stock registers, was not adequately considered by the Tribunal. Despite the appellant meeting the burden of proof under Section 123 of the Customs Act, 1961, the Revenue failed to disprove the facts presented. The Court asserted that acting on no evidence, as done by the Tribunal, warranted intervention under Article 226 of the Constitution of India. Consequently, the Court set aside and quashed the Tribunal's order, allowing the writ application and directing the return of confiscated gold biscuits to the petitioner within six weeks.

In conclusion, the judgment underscores the importance of substantial evidence in cases of confiscation, the burden of proof on the Revenue, and the High Court's authority to intervene when decisions are based on no evidence. The Court's meticulous analysis of the legal provisions and evidentiary considerations led to the favorable outcome for the petitioner in this case.