2019 (1) TMI 256 - AT - Customs

Smuggling - Gold - illegal importation and possession of primary gold in contravention of the provisions of the Customs Act - appellant claims lawful possession of gold - confiscation - penalty - Held that - There is no dispute with the two Gold Bars recovered from the residential premises owned by the appellant s father and the appellant and his brother Shri Harish Kumar Chaurasia were residing along with their respective families in the said premises. There is no dispute that the said gold bars did not have any foreign marking. No further investigation has been made by the Department thereafter - Thus, the department could not adduce any evidence whatsoever to prove that the said two gold bars were smuggled in the two countries. Therefore, the presumption regarding the smuggled nature of seized gold under section 123 of the Customs Act, is not invokable. Neither seized gold could be legally confiscated under Section 111 (b) of the Customs Act, 1962 nor any penalty could be imposed on the appellant - appeal allowed - decided in favor of appellant.

Issues:
1. Illegal importation and possession of primary gold in contravention of Customs Act.
2. Allegations of gold being of 3rd country origin brought from Nepal through unauthorized route.
3. Seizure and possession of gold from residential premises.
4. Purity testing of seized gold.
5. Confiscation of gold and penalty imposition.
6. Dismissal of appeal by Ld. Commissioner (Appeals).
7. Lack of evidence proving seized gold as of foreign origin.
8. Disputed link between accused persons and appellant.
9. Allegation of possession of primary gold, not related to smuggling.
10. Claim of lawful possession based on family traditions.
11. Legal requirements post-repeal of Gold (Control) Act, 1968.
12. Imposition of penalty without proper reasoning.
13. Disputed origin of seized gold from Nepal.
14. Verification of gold purity and its implications.
15. Appellant's affidavit supporting gold ownership.
16. Lack of legal documents for recovered gold.
17. Ownership details of recovered gold.
18. Absence of foreign marking on seized gold bars.
19. Legal confiscation and penalty imposition.

Analysis:
1. The case involved allegations of illegal importation and possession of primary gold in violation of the Customs Act. The gold in question was suspected to be of 3rd country origin, smuggled into India from Nepal through an unauthorized route.
2. The gold, weighing 299 grams, was seized from the residential premises of the appellant's father, leading to proceedings against the appellant.
3. Samples of the seized gold were sent for purity testing, with the results awaited at the time of the adjudication.
4. The Adjudicating Authority ordered the confiscation of the gold and imposed a penalty under section 112 of the Customs Act, which was challenged in the appeal.
5. The appeal filed by the appellant was dismissed by the Ld. Commissioner (Appeals), prompting the appellant to approach the Tribunal.
6. The appellant's defense centered on the lack of evidence proving the seized gold as of foreign origin, emphasizing the absence of foreign markings on the gold pieces.
7. The appellant argued that the seized gold was lawfully possessed, following traditional family customs of gifting gold at weddings and births.
8. The appellant also highlighted the liberalization of gold import policies post the repeal of the Gold (Control) Act, 1968, and the absence of stringent record-keeping requirements for gold transactions.
9. The Tribunal found discrepancies in the Department's case, noting the lack of evidence linking the appellant to the smuggling of gold and the absence of foreign markings on the seized gold bars.
10. Relying on legal precedents, the Tribunal set aside the confiscation of the gold and the penalty imposed on the appellant, granting consequential relief.
11. The judgment emphasized the importance of substantiating allegations of smuggling and the need for concrete evidence to support confiscation and penalty imposition under the Customs Act.

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