2024 (3) TMI 192 - AT - Customs

Confiscation of the gold seized - penalty - HELD THAT - We find force in the submission made by the Learned Advocate. The Seizure Report itself states that the goods is of about 20-21 Carat and subsequent quality test has revealed that its purity is only 80.66%. Therefore, this could not be classified as gold of foreign origin. Therefore, we hold that the confiscation and relevant penalty towards the same are required to be set aside. In respect of the proceedings conducted about 6 Kgs of gold seized at Patliputra Railway Station, the Learned Advocate submits that the initial statements given by the Appellant No. 2 3 were subsequently retracted. The Appellants have sought cross- examination of the Panchas and other persons who have recorded the statement. After the Cross-Examination proceedings are completed, the same should be taken on record and the Appellant should be given opportunity to make all their submissions and Order should be passed after following the principles of natural justice. Since the value of seized/confiscated gold is very high and the matters pertain to the year 2021, the Adjudicating Authority is directed to complete the proceedings within 4 months from the date of receipt of communication of this Order. In respect of the seized gold of 1096.03 gms, the Appeals stand allowed. The confiscated goods should be released immediately on receipt of communication of this Order. The Appeal is disposed of thus.

Summary

Issues involved: Seizure and confiscation of gold, imposition of penalties, failure to discharge burden of proof under Section 123, principles of natural justice not followed.

Seizure and Confiscation of Gold:
The case involved the seizure of approximately 6 kgs of gold from the Appellant Nos. 2 & 3 at Patliputra Railway Station and 1096.030 gms of gold from the premises of Appellant No. 1 at Guwahati. The Directorate of Revenue Intelligence (DRI) issued a Show Cause Notice to the Appellants regarding the confiscated gold and penalties. The lower authorities ordered absolute confiscation of the seized gold and imposed penalties. The Appellants challenged this decision before the Tribunal.

Burden of Proof and Confiscation:
The Appellant's Counsel argued that the seized gold of 1096.030 gms had a documented description and verified purity of 80.66%, indicating it was not of foreign origin. The Tribunal examined the evidence and agreed with the Counsel's submission, setting aside the confiscation and penalties related to this gold.

Principles of Natural Justice:
Regarding the 6 kgs of gold seized at Patliputra Railway Station, the Appellant's Counsel contended that the initial statements given by Appellant Nos. 2 & 3 were retracted, and they were denied the opportunity for cross-examination of witnesses. The Tribunal found that the Adjudicating Authority did not follow the provisions of the Customs Act and failed to grant the Appellants' request for cross-examination, thus not adhering to the principles of natural justice.

Decision and Remand:
The Tribunal remanded the matter of the 6 kgs of seized gold back to the Adjudicating Authority. It directed the Authority to allow cross-examination of witnesses, including the Panchas, and ensure all submissions are considered before passing a new order within four months. The appeal was allowed in the case of the 1096.03 gms of gold, and the confiscated goods were ordered to be released immediately upon receipt of the Tribunal's decision.

This judgment addresses the issues of seizure, confiscation, burden of proof, and adherence to principles of natural justice in a case involving the possession of gold by the Appellants. The Tribunal set aside the confiscation and penalties related to the 1096.03 gms of gold based on documented evidence of its purity. It also found that the Adjudicating Authority did not follow proper procedures in the case of the 6 kgs of seized gold and remanded the matter for further proceedings ensuring the principles of natural justice are upheld.