2021 (12) TMI 632 - AT - Customs

Smuggling - Gold - confiscation u/s 111(a) and 111(d) read with Section 120 of the Customs Act, 1962 - confiscation of the goods of no commercial value under Section 119 - penalties - burden of proof - HELD THAT - There are no hesitation in concluding that the seized gold is of foreign origin and the DRI officers had a reasonable belief that it was smuggled and has correctly been seized. Neither the person from whom the gold was seized, i.e. that Shri Sathyanarayana nor the alleged owner of the gold Shri Manda Ramu, could discharge the onus of showing that it is not smuggled gold. Much emphasis has been laid in all appeals on the fact that the pieces of gold which have been seized had no foreign markings. Be that as it may, lack of foreign markings does not change the status of the goods under Section 123. The reasonable belief has to be examined in the factual matrix of each case. In this case, the purity of the gold, the lack of invoice, the payment for the gold in cash concealed in a jacket and in which the gold was also being carried all add up to give reasonable belief to the officer. The original and duplicate copies of the invoice, unsigned, prepared by Shri Balaji in favour of Shri Manda Ramu do not inspire any confidence because if it was an invoice issued for sale it should have been sent with the goods after signature which is not the case. In fact, the initial statement Shri Balaji clarified that he prepared the invoice after receiving the same information about the seizure of gold. This is nothing but an attempt to cover up. The other invoice showing purchase of 2000 gm of gold also does not support the appellant s case because the purity of the gold was different. Appeal disposed off with following order - (a) Confiscation of 3.158 kg. of gold valued at ₹ 94,61,368/- under Section 111(a) and (d) read with Section 120 of the Customs Act is upheld. (b) Confiscation of the goods of no commercial value used for concealment the above gold is upheld under Section 119. (c) Confiscation of 173.400 gm of pieces of gold bars is set aside. (d) Confiscation of 70.300 gm. of foreign marked coins under Section 111(a) 111(d) is upheld. (e) Confiscation of Rupees Ninety lakhs under Section 121 of the Customs Act is upheld. (f) Penalty upon Shri V. Sathyanarayana under Section 112(b) of the Customs Act is reduced to Rupees One lakh. (g) Penalty of Rupees Twenty lakhs under Section 112(b) of the Customs Act Shri Manda Ramu is upheld. (h) Imposition of penalty under Section 112(b) of Rupees Twenty lakhs upon Shri P. Balaji is upheld. (i) Imposition of penalty of Rupees Five lakhs on Shri K. Srinivasulu is set aside.

Issues Involved:
1. Confiscation of 3.158 kg of gold.
2. Confiscation of goods of no commercial value.
3. Confiscation of 173.400 gm of cut pieces of gold bars and 70.300 gm of foreign marked gold coins.
4. Confiscation of Rupees Ninety lakhs deposited in Bank of Baroda.
5. Imposition of penalty on Shri V. Sathyanarayana.
6. Imposition of penalty on Shri Manda Ramu.
7. Imposition of penalty on Shri P. Balaji.
8. Imposition of penalty on Shri K. Srinivasulu.

Detailed Analysis:

1. Confiscation of 3.158 kg of gold:
The gold was seized from Shri V. Sathyanarayana, who was intercepted at the Railway Station. The gold, found concealed in a jacket, was of 99.9% purity, typically associated with smuggled gold. Shri Sathyanarayana admitted to working for Shri Manda Ramu and receiving the gold from Shri Balaji without any invoice. The purity and lack of documentation led to a reasonable belief that the gold was smuggled. The Tribunal upheld the confiscation under Section 111(a) and 111(d) read with Section 120 of the Customs Act, 1962.

2. Confiscation of goods of no commercial value:
The jacket used to conceal the smuggled gold was confiscated under Section 119 of the Customs Act, 1962. This confiscation was upheld as it was used for concealing the smuggled gold.

3. Confiscation of 173.400 gm of cut pieces of gold bars and 70.300 gm of foreign marked gold coins:
The Tribunal found that the 173.400 gm of cut pieces of gold bars did not fall under the mischief of Section 123 and set aside their confiscation. However, the 70.300 gm of foreign marked gold coins, lacking legitimate import documents, were confiscated under Section 111(a) and 111(d).

4. Confiscation of Rupees Ninety lakhs deposited in Bank of Baroda:
The amount was considered the sale proceeds of the smuggled gold, as it was transferred to M/s SLN Security from Shri Manda Ramu. The Tribunal upheld the confiscation under Section 121 of the Customs Act, 1962.

5. Imposition of penalty on Shri V. Sathyanarayana:
Shri Sathyanarayana, acting as a courier for Shri Manda Ramu, was penalized under Section 112(b) of the Customs Act, 1962. The penalty was reduced from Rupees Ten lakhs to Rupees One lakh, considering his role as a courier.

6. Imposition of penalty on Shri Manda Ramu:
Shri Manda Ramu, identified as the buyer of the smuggled gold, was penalized Rupees Twenty lakhs under Section 112(b) of the Customs Act, 1962. The Tribunal found no reason to interfere with this penalty.

7. Imposition of penalty on Shri P. Balaji:
Shri Balaji, who facilitated the smuggling operation, was penalized Rupees Twenty lakhs under Section 112(b) of the Customs Act, 1962. The Tribunal upheld this penalty.

8. Imposition of penalty on Shri K. Srinivasulu:
Shri K. Srinivasulu, a Director of M/s SLN Security, was found to have no active role in the operation due to personal reasons. The Tribunal set aside the penalty of Rupees Five lakhs imposed on him.

Conclusion:
- Confiscation of 3.158 kg of gold and the jacket used for concealment is upheld.
- Confiscation of 173.400 gm of cut pieces of gold bars is set aside, but 70.300 gm of foreign marked gold coins is upheld.
- Confiscation of Rupees Ninety lakhs is upheld.
- Penalty on Shri V. Sathyanarayana is reduced to Rupees One lakh.
- Penalties on Shri Manda Ramu and Shri P. Balaji are upheld.
- Penalty on Shri K. Srinivasulu is set aside.

Disposition:
All appeals are disposed of with the above terms and consequential reliefs, if any. The miscellaneous application filed by the appellant also stands disposed of.

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