2002 (9) TMI 152 - AT - Customs

Summary

Issues Involved:
1. Legality of the seizure of 49 foreign marked gold biscuits.
2. Application of Section 123 of the Customs Act.
3. Confiscation of gold biscuits under Section 111(d) of the Customs Act.
4. Confiscation of the blue colored jeans bag under Section 119 of the Customs Act.
5. Imposition of penalties on the involved parties under Section 112(a) and 112(b)(ii) of the Customs Act.
6. Validity of the statements and evidence provided by the appellants.

Detailed Analysis:

1. Legality of the Seizure of 49 Foreign Marked Gold Biscuits:
The judgment outlines that the gold biscuits were seized from Shri D.S. Srinivas by the Ulsoor Gate Police on 12-3-98. The Customs Officers were informed and conducted independent investigations. The gold biscuits bore the markings of 'Swiss Bank Corporation'. The initial claim by Shri Lakhanraj was that the gold was purchased from Indian Overseas Bank (IOB), but later documents suggested it was from Canara Bank. The court found discrepancies in the statements and documents provided, leading to the conclusion that the gold was smuggled.

2. Application of Section 123 of the Customs Act:
The court discussed the burden of proof under Section 123 of the Customs Act, which lies on the person from whose possession the gold was seized. The appellants failed to satisfactorily prove that the seized gold was not smuggled, as their explanations and documents were inconsistent and appeared to be afterthoughts.

3. Confiscation of Gold Biscuits under Section 111(d) of the Customs Act:
The Commissioner concluded that the 49 gold biscuits were smuggled into India in contravention of Section 11 of the Customs Act, making them liable for confiscation under Section 111(d). The court upheld this finding, noting that the appellants did not satisfactorily account for the possession of the gold and failed to prove its duty-paid character.

4. Confiscation of the Blue Colored Jeans Bag under Section 119 of the Customs Act:
The blue colored jeans bag used to conceal and carry the gold biscuits was also ordered to be confiscated under Section 119 of the Customs Act. The court upheld this decision as the bag was used in the act of smuggling.

5. Imposition of Penalties on the Involved Parties:
- Shri Lakhanraj: A penalty of Rs. 5 lakhs was imposed for his involvement in smuggling and attempting to legitimize the smuggled gold through false documents.
- Shri D.S. Srinivas: A penalty of Rs. 2 lakhs was imposed for his role in receiving, keeping, and selling the smuggled gold.
- Shri Prakash Chand: Initially, a penalty of Rs. 3 lakhs was imposed for giving false statements to legitimize the smuggled gold. However, the court set aside this penalty, finding no sufficient grounds to uphold it.

6. Validity of the Statements and Evidence Provided by the Appellants:
The court found the statements and evidence provided by the appellants to be inconsistent and unreliable. The initial claim that the gold was from IOB was contradicted by later documents suggesting Canara Bank as the source. The statements of Shri Vasudeva Bhat from IOB and the lack of cross-examination of his statements further weakened the appellants' case. The court also considered the statement of Shri B.H. Srinivasamurthy, which corroborated the possession of the gold biscuits by Shri D.S. Srinivas before the claimed time of delivery from Canara Bank.

Conclusion:
The appeals of Shri D.S. Srinivas and Shri Lakhanraj were dismissed, upholding the confiscation of the gold biscuits and the penalties imposed on them. The appeal of Shri Prakash Chand was allowed, and the penalty against him was set aside.