2019 (9) TMI 334 - AT - Customs

Smuggling - Gold - Gold of Foreign Origin or not - it was alleged that appellant did not produce any licit document for possession of said quantity of gold - HELD THAT - The purity of gold in the seized gold was less than purity of gold of foreign origin. Further, revenue also could not establish from where the gold was smuggled. On the contrary the appellant has established that he has procured the said gold from Shri Shivanshu Agarwal after making payments through banking channels. It was up to revenue to further investigate as to from where Shri Shivanshu Agarwal has obtained the same. Though it is not available on record but it is more probable that after investigation with Shri Shivanshu Agarwal, revenue could not bring out any evidence to establish that Shri Shivanshu Agarwal had obtained smuggled gold and therefore, no such evidence is forth coming from the record. After taking note that the purity of gold was less than the gold of foreign origin and M/s Raj Shree Jewelers and its proprietor Shri Neeraj Agarwal had obtained that gold from Shri Shivanshu Agarwal after making payments through banking channels, we hold that the seized gold was not smuggled into India and therefore, the same is not liable for confiscation. Confiscation as well as penalties set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Confiscation of seized gold under Customs Act, 1962
2. Imposition of penalties on the appellants
3. Origin of the seized gold - foreign or domestic
4. Validity of evidence and investigations conducted by DRI Officers
5. Ownership and possession of the gold by the appellants

Analysis:

1. The appeals arose from a common impugned Order-in-Original passed by the Commissioner of Customs (Preventive), Lucknow, regarding the confiscation of 2997 grams of gold seized from one of the appellants, Shri Bipat Bind, intercepted at a railway station. The gold was suspected to be liable for confiscation under the Customs Act, 1962.

2. The Original Adjudicating Authority had ordered absolute confiscation of the gold and imposed penalties on the appellants. The appellants challenged this decision before the Tribunal, arguing that the gold was meant for legitimate business purposes and was not of foreign origin, as claimed by the authorities.

3. The appellants contended that the seized gold was not of foreign origin, as its purity levels did not match those of foreign gold. They presented evidence to show that the gold was obtained through legal channels, with payments made through banking transactions. They argued that the gold should be released as they had proven legal possession.

4. The Tribunal noted discrepancies in the investigations conducted by the DRI Officers, especially regarding the origin of the gold and the involvement of a third party, Shri Shivanshu Agarwal. The Tribunal found that the revenue failed to establish the gold as smuggled, and no evidence linked Shri Shivanshu Agarwal to illegal activities. The lack of conclusive evidence led to the decision to set aside the confiscation and penalties.

5. Ultimately, the Tribunal ruled in favor of the appellants, setting aside the confiscation of the gold and the penalties imposed on them. The Tribunal directed the revenue to release the seized gold promptly, concluding that the appellants had demonstrated legal possession and the absence of evidence linking the gold to smuggling activities.

This detailed analysis of the judgment highlights the key issues, arguments presented by the parties, and the Tribunal's reasoning leading to the final decision in the case.