2024 (2) TMI 1263 - AT - Customs

Smuggling - Seized 2332.800 gm of foreign marked gold - confiscation of seized gold - Burden of proof - four invoices of VBC initially recovered from Satendro Panda at the time of recovery - invocation of Section 123 of CA - HELD THAT - We find that it remains a matter contentious between the department and the appellant, that only photocopies of two invoices of BBC were made over to the authorities and original not produced by the appellant, while the latter claims to have made it over to the Deputy Commissioner, who had personally verified the same. The fact that copy of the said invoices each were procured by the department from the end of BBC, sets to rest any doubts in this regard, in the purported absence of the originals/invoices. It is also not the case that the two invoices were tendered quite later during the investigation process, as it is on record that the appellant, at the time of claim of ownership of seized gold within days of seizure (gold seized on 18.08.1999 while ownership claim application and BBC invoices received by the department on 23.08.1999), itself tendered the said invoices virtually hinting at proximate time span in the matter. Also we find not enough merit in disregarding the application indicating 20 Tolas in lieu of 200 Tolas in one of the application tendered by the appellant, which error the appellant have described as to a clerical one. We also find no substance in the departments plea of reading exceptionally into the act of interpolating UBS in the MMTC issued delivery challan/invoice, which the appellant indicates was for reason of their own internal consumption. MMTC has admittedly raised the invoice in question in favour of BBC which the department sourced upon investigations done with BBC and a copy of which was made over to the department by the appellant during investigations. Also, BBC has submitted before the authorities that sales were normally made against manual invoices, but computerized billing was resorted to by them on the basis of customer s request. We note it is these computerized invoices that the department laid its hands on while conducting immediate follow up with BBC. We are of the view that the appellant s have satisfactorily discharged the burden cast upon them in law, u/s 123 of the Customs Act and have demonstrated the licit possession of seized gold. On the other hand the department has failed in irrefutably demonstrating any falsity in the evidence supplied by the appellant noticee. Thus, for want of the same the seizure and the ultimate confiscation of the 20 gold bars is not warranted. It being therefore unlawful is liable to be set aside. For reasons thus, we quash and set aside the orders passed by the lower authority and also set aside the order of confiscation of gold and imposition of penalty and allow the appeal with consequential relief as per law.

Summary

Issues Involved:
1. Legality of the confiscation of 2332.800 gm of foreign marked gold.
2. Validity of the documents provided by the appellant to prove lawful possession.
3. Conduct of the appellant during the investigation.

Summary:

1. Legality of the confiscation of 2332.800 gm of foreign marked gold:
The Revenue seized 2332.800 gm of foreign marked gold in 1999, which was ordered to be confiscated by the Department. This order was upheld in appeal but later set aside by the Hon'ble High Court of Orissa, which remanded the matter for fresh consideration. The Commissioner (Appeals) again upheld the confiscation, stating that the appellant could not convincingly prove lawful import or acquisition of the gold, thereby validating the confiscation and penalization.

2. Validity of the documents provided by the appellant to prove lawful possession:
The appellant initially provided four bills from Visakha Bullion Corporation (VBC) to support the lawful acquisition of the gold. However, investigations revealed that these bills did not pertain to the seized gold, as the State Bank of India, from which VBC procured gold, did not sell UBS brand gold. The appellant later claimed ownership through two bills from Bherunath Bullion Corporation (BBC), which were verified by the Department. Despite the Department's skepticism about the manual inscription of "UBS" on the MMTC invoice, the Tribunal found that the appellant satisfactorily demonstrated the licit possession of the gold through these documents.

3. Conduct of the appellant during the investigation:
The appellant was accused of obstructing the investigation by not responding to summons and filing multiple petitions, which delayed the process. However, the Tribunal noted that such conduct could be due to various reasons, including fear and harassment, and did not necessarily indicate guilt. The Tribunal emphasized that the Department failed to provide conclusive evidence to refute the appellant's claims and documents.

Conclusion:
The Tribunal concluded that the appellant satisfactorily discharged the burden under Section 123 of the Customs Act, proving the lawful possession of the seized gold. The Department failed to irrefutably demonstrate any falsity in the evidence provided by the appellant. Consequently, the seizure and confiscation of the gold were deemed unlawful and set aside, and the appeal was allowed with consequential relief.