2017 (9) TMI 1332 - AT - Customs

Smuggling - Gold bars - confiscation - Whether Commissioner of Customs (Appeals) was legally correct to pass an order for Denovo Adjudication by lower authority after verification with the records of M/s. Anand Silver Pvt. Ltd. for the gold bar which was already tempered and when it is not clear how verification will bring out the truth? - Held that - the Commissioner(Appeals) had given an opportunity to establish the truth on the basis of records, if available and thereafter the question of further investigation would arise, which cannot be treated as unreasonable. Release of Gold Bars - Held that - there is no indication in the Panchnama that these goods have foreign markings. The Revenue had not disputed this fact - there is no material available on record that the cue pieces were not bearing any foreign markings. So, there is no reason to interfere with the order of First Appellate Authority. The confiscated gold has already been disposed by the department. The Commissioner(Appeals) observed that the appellants are entitled to the sale proceeds minus the fine etc., if any, as provided under section 150 of the Customs Act, 1962 - appeal dismissed - decided against Revenue.

Summary

Issues involved:
1. Legality of passing an order for Denovo Adjudication by lower authority after verification with records of M/s. Anand Silver Pvt. Ltd.
2. Imposition of a redemption fine of ?30,000 without indicating mitigating factors.
3. Legality of releasing 13 pieces of gold without foreign markings.

Analysis:

Issue 1:
The Revenue challenged the Commissioner(Appeals) order for Denovo Adjudication regarding the gold bar's authenticity and source. The Commissioner(Appeals) remanded the matter for further inquiry to determine if the gold was purchased from M/s. Anand Silver Pvt. Ltd. The Revenue argued that tampering of marks is evidence of mala fide, negating the need for additional investigation. However, the Tribunal found the remand order reasonable, allowing the appellant to establish the truth based on available records before further investigation could be considered. The Tribunal upheld the Commissioner(Appeals) decision for further inquiry, dismissing the Revenue's appeal on this point.

Issue 2:
Regarding the redemption fine, the Commissioner(Appeals) upheld the confiscation but reduced the fine to ?30,000 without specifying mitigating factors. The Tribunal noted that the Revenue did not dispute the absence of foreign markings on the 13 cut pieces of gold. The Tribunal found no evidence that the cut pieces lacked foreign markings and upheld the Commissioner(Appeals) decision to release them. Additionally, the Tribunal mentioned the disposal of confiscated gold by the department and cited a High Court decision directing the department to refund the sale proceeds with interest. The Tribunal dismissed the Revenue's appeal on this issue, affirming the Commissioner(Appeals) order.

Issue 3:
The Tribunal considered the Revenue's arguments against releasing the 13 cut pieces of gold without foreign markings. However, the Tribunal found no concrete evidence to support the Revenue's claim of tampering with mala fide intention. The Tribunal upheld the Commissioner(Appeals) decision to release the cut pieces, emphasizing the lack of material on record to dispute their foreign markings. Citing relevant case law and decisions, the Tribunal concluded that there was no basis to interfere with the Commissioner(Appeals) order. Consequently, the Tribunal dismissed the Revenue's appeal on this issue as well.

In conclusion, the Appellate Tribunal CESTAT KOLKATA upheld the Commissioner(Appeals) decisions on all points raised by the Revenue, dismissing the appeal and affirming the orders regarding Denovo Adjudication, redemption fine, and release of the cut pieces of gold.