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2021 (3) TMI 1114 - AT - CustomsSmuggling - Gold - failure to discharge the burden under Section 123 of the Customs Act, 1962 - notified goods - prohibited goods or not - discharge of onus of proof - assumption and presumption - whether the impugned gold seized by Punjab police and later on handed over to Customs Officers, the provisions of Section 123 of the Customs Act, 1962 are applicable or not? - HELD THAT - Admittedly, in the case in hand, the gold initially seized by Punjab police in 2007 and thereafter, it was handed over to Customs authorities by Punjab police itself. In these circumstances, burden lies on the Revenue to prove that the goods in question are of smuggled in nature, which the Revenue failed to do so. In these circumstances, as the Revenue failed to discharge their onus, therefore, the impugned order and seizure of the goods by the authorities below is bad in law. The onus lies on the Revenue to prove that the goods in question are of smuggled in nature, which the Revenue has failed to discharge their onus with proper evidence. In the impugned order, it is held on the basis of assumption presumption that the gold is of smuggled in nature which cannot be appreciated. Further, the gold in question is not prohibited goods in terms of Section 2(33) of the Act, in these circumstances, the absolute confiscation of the gold is against the legal provisions as held by this Tribunal in the case of YAKUB IBRAHIM YUSUF VERSUS COMMISSIONER OF CUSTOMS, MUMBAI 2010 (10) TMI 650 - CESTAT, MUMBAI . Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Legality of the seizure of gold biscuits by Punjab Police and its subsequent handling by Customs Authorities. 2. Applicability of Section 123 of the Customs Act, 1962. 3. Burden of proof regarding the smuggled nature of the gold. 4. Validity of absolute confiscation of the gold. 5. Timeliness of the show cause notice. 6. Imposition of penalty on the appellant. Issue-wise Detailed Analysis: 1. Legality of the Seizure by Punjab Police: The appellant contested the seizure of ten gold biscuits by Punjab Police on 24.09.2007, arguing that the police were not the appropriate authority for such an action. The Hon’ble Judicial Magistrate, Amritsar, held that the police official was not authorized to seize the gold and suggested forwarding the matter to the Commissioner of Customs or another appropriate authority. The gold was eventually handed over to Customs on 15.12.2017. 2. Applicability of Section 123 of the Customs Act, 1962: The appellant argued that Section 123, which shifts the burden of proof to the possessor of notified goods to show they are not smuggled, does not apply when goods are seized by police and later handed to Customs. This view was supported by various judicial pronouncements, including Commissioner of Customs Vs. D. K. Singh and E. Eswara Reddy Vs. C.C., which held that seizures by police do not attract Section 123. 3. Burden of Proof: The appellant provided invoices and a certificate from M/s Rakesh Jewellers to substantiate the lawful purchase of the gold. The Customs Department failed to provide evidence proving the gold was smuggled. The Tribunal noted that the burden to prove the gold was smuggled lay with the Customs, as per the judicial precedents cited. 4. Validity of Absolute Confiscation: The appellant contended that the gold, not being prohibited goods, should not have been absolutely confiscated. The Tribunal agreed, referencing Section 125 of the Customs Act, which allows for the release of non-prohibited goods on payment of a fine. The Tribunal cited cases like Yakub Ibrahim Yusuf Vs. Commissioner of Customs, which supported this view. 5. Timeliness of the Show Cause Notice: The appellant argued that the show cause notice issued on 07.03.2018 was time-barred, given the initial seizure occurred in 2007 and the Customs were aware of the gold by 2011. The Tribunal agreed, referencing the Hon’ble Punjab & Haryana High Court's decision in Famina Knit Fabs Vs. Union of India, which held that actions must be initiated within a reasonable period, typically not exceeding five years. 6. Imposition of Penalty: The appellant argued against the penalty, stating there was no mens rea or malafide intent. The Tribunal found that the Customs Department failed to substantiate claims of unlawful acquisition, thus setting aside the penalty. Conclusion: The Tribunal concluded that the seizure by Punjab Police and subsequent handling by Customs did not attract Section 123 of the Customs Act. The burden of proof lay with the Customs Department, which failed to prove the gold was smuggled. The absolute confiscation was deemed illegal, and the show cause notice was found to be time-barred. Consequently, the Tribunal set aside the impugned order, allowing the appeal with consequential relief.
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