2017 (10) TMI 985 - AT - Customs

Smuggling - gold - confiscation - redemption fine - penalty - Held that - the genuineness of the appellant is doubted and the goods were rightly seized - carrying the gold in temple is doubtful, therefore, it is a case of smuggling of gold by the appellant from Nepal to India - confiscation upheld. Cross-examination of witnesses - Held that - in the case of Surjeet Singh Chhabra Vs. Union of India 1996 (10) TMI 106 - SUPREME COURT OF INDIA , the Hon ble Apex court has held that when the goods have been recovered in the custody of the appellant itself during the course of investigation, in that circumstances by providing cross-examination of the witnesses is of no help - Admittedly, the goods in question has been recovered from the personal custody of the appellant. Therefore, there is no requirement to give cross-examination to the appellant of the panch witnesses. The value of gold is ₹ 6,26,258/- and redemption fine and penalties are imposed of ₹ 1 lakh each which are highly excessive, therefore, the redemption fine and penalty are reduced to Rs,50,000/- each. Appeal allowed in part.

Summary

Issues:
Appeal against confiscation of seized goods and imposition of redemption fine and penalty under Section 112 (b) of Customs Act, 1962. Explanation of source of procurement of goods, cross-examination of witnesses, justification of confiscation, and assessment of redemption fine and penalty.

Analysis:
The appellant appealed against an order confiscating seized goods and imposing a redemption fine and penalty under Section 112 (b) of the Customs Act, 1962. The appellant was intercepted while returning from Nepal to India, carrying 93.74 gm. of pure gold and 239 gms. of gold nose pins. The appellant claimed the goods were handed over to him by a person named Shera in Nepal, but failed to provide a satisfactory explanation for the source of procurement. The Adjudicating Authority dropped proceedings based on an invoice produced by the appellant, but the Commissioner (Appeals) held the goods liable for confiscation. The appellant contended that the goods were purchased from M/s D.S. Traders, Amritsar, and were not smuggled. However, the tribunal found the explanation unsatisfactory, considering the circumstances and lack of supporting evidence. The tribunal affirmed the order of confiscation, concluding it was a case of smuggling.

The appellant argued that the panch witnesses were not allowed to be cross-examined, but the tribunal cited a Supreme Court case stating that cross-examination is unnecessary when goods are recovered from the appellant's custody. As the goods were found in the appellant's possession, cross-examination of panch witnesses was deemed unnecessary. Additionally, the tribunal reduced the redemption fine and penalty from &8377; 1 lakh each to &8377; 50,000 each, considering the excessive amount in relation to the value of the gold. The tribunal disposed of the appeal with the modified terms, affirming the confiscation of goods but reducing the redemption fine and penalty.

In conclusion, the tribunal upheld the confiscation of the seized goods due to the appellant's failure to provide a credible explanation for the source of procurement. The decision highlighted the importance of providing supporting evidence and the lack of justification for carrying valuable items in suspicious circumstances. The tribunal also clarified the requirement for cross-examination of witnesses in cases where goods are recovered from the appellant's personal custody. Additionally, the tribunal adjusted the redemption fine and penalty to a more reasonable amount based on the value of the gold involved in the case.