2024 (2) TMI 204 - AT - Customs

Levy of penalty u/s 112 (b) (ii) of the Customs Act, 1962 - smuggling of Gold Bars - goods were bought from Myanmar without proper documents - no reliable evidence has been produced to prove beyond reasonable doubt that the gold bars were imported or legally procured - Violation of principles of natural justice - HELD THAT - The Department has not stated as to what kind of foreign markings were found on the seized gold bars. Even in the list of Inventory of Goods seized dated 26/6/2014, nothing on this count is being shown. Though this document speaks of 5 Gram gold being drawn as samples, the Department has not come out with any Certificate about the purity of these gold bars. Though the Appellants in their reply to Show Cause Notice before the Adjudicating Authority have submitted that no reliable evidence has been produced to prove beyond reasonable doubt that the gold bars were imported or legally procured, the Adjudicating Authority has not addressed this issue properly. In the instant case the inscriptions as embossed on the recovered gold bars clearly demonstrates that they have been manufactured in a foreign country . The seizure Report and the SCN do not speak any such inscription. Therefore, this finding of the Adjudicating Authority is not backed by any documentary evidence whatsoever. Thus, no proper case has been made out against any of these three Appellants so as to impose the penalty under Section 112 (b) (ii) of the Customs Act, 1962 - appeal allowed.

Summary

Issues involved: Seizure of gold bars, confiscation, penalties under Section 112(b)(ii) of the Customs Act, 1962.

Summary:

The Appellants were travelling from Imphal to Mumbai when they were intercepted at the Airport and eight pieces of gold bars weighing 6 Kgs were seized from them. A Show Cause Notice was issued seeking to confiscate the gold bars valued at Rs. 1,56,00,000/- and impose penalties on the three Appellants under Section 112(b)(ii) of the Customs Act, 1962. The Adjudicating Authority passed an order confiscating the gold bars absolutely and imposing penalties, leading the Appellants to appeal before the Tribunal.

The Learned Counsel argued that no one claimed ownership of the gold bars, hence the confiscation was not challenged. They contested the penalties imposed, highlighting discrepancies in the seizure report and lack of evidence regarding the foreign origin of the gold bars. The statements given by the Appellants were inconsistent, with one Appellant claiming to have bought the gold from Myanmar while later stating he found it in a garbage bin.

Regarding the Second Appellant, no gold was seized, and the case against her was based on bank statements showing cash transactions. The Counsel argued that cash transactions alone do not prove involvement with the seized gold. The third Appellant claimed he was unaware of the gold bars and had accompanied the first Appellant only for assistance during travel, asserting no case against him.

After reviewing the documents and arguments, the Tribunal found that the Department failed to prove the case against the Appellants for imposing penalties under Section 112(b)(ii) of the Customs Act, 1962. As a result, the penalties were set aside, and the Appeals were allowed. The order for absolute confiscation of the gold bars remained upheld as it was not challenged by the Appellants.

In conclusion, the Appeals were disposed of with the penalties being set aside, and the confiscation order remaining in effect.