2024 (10) TMI 1076 - AT - Customs

Confiscation - foreign marked gold bars - burden to prove - legitimate source - Adequacy of evidence and documents presented by the appellant - Evaluation of the defense presented by the appellant - HELD THAT - The entire case is based on interception of certain consignments in the Air Cargo Complex, Hyderabad which were being carried by the Courier companies. In the case of the appellant also it is apparent from the record that there has not been any document produced by the courier company or the representative of the appellant at the time of seizure. The entire case has been decided by the Adjudicating Authority in a very cryptic manner without going into detail as far as the defence taken by the appellant is concerned. One of the major point which appellants have claimed is that the gold in question was procured from legitimate source and was being sent as a legitimate business transaction. This aspect has not been adequately dealt with by the Adjudicating Authority and a very cryptic remark has been made at para 31(ii) Mr Mohammad Abdul Razzak also not submitted any documentary evidence . Therefore, order appears to have been passed in a bald manner, without following principles of natural justice. The Commissioner (Appeals) has found no reasons to disagree with observations made by Original Authority at para 36 holding invoices and documents produced being created one and afterthought to cover up them illicit act of processing foreign gold. He also observed that Assessee has certified it as foreign gold - the evidence given under statement could not be brushed aside that being sufficient evidence to the contrary and therefore, Commissioner (Appeals) has also not given detailed reasons as to why Original Adjudicating Authority observation was correct. In the interest of justice and having regards to the facts of the case, the matter is remanded back to the Original Adjudicating Authority - The Adjudicating Authority should decide this matter by way of speaking order within a period of 3 months subject to appellants providing necessary documents and appearing for personal hearing on the date(s) fixed by the Adjudicating Authority. Appeal allowed by way of remand to Original Adjudicating Authority.

Summary

Issues:
1. Confiscation of gold bars and jewelry under Customs Act and CGST Act.
2. Burden of proof on the appellant to establish the confiscated gold were not of smuggled nature.
3. Adequacy of evidence and documents presented by the appellant.
4. Evaluation of the defense presented by the appellant.
5. Lack of detailed reasoning in the impugned order.

Analysis:
The case involved the interception of consignments at the Air Cargo Complex by Customs officers, suspected to contain foreign marked gold bars and jewelry. The Customs Department seized the goods under the belief that they were of foreign origin and smuggled. Subsequent investigations led to show cause notices being issued, including to the appellant, asking for explanations regarding the confiscated gold bars. The Original Adjudicating Authority, in a common order, held that the appellants failed to provide substantial evidence on the procurement of gold and its transport, leading to the confiscation of the goods.

The appellant's representative argued that the Department's belief of the gold being of foreign origin was not adequately supported by evidence, especially since the assayer's report did not definitively confirm it. The appellant claimed to have procured the gold from a legitimate source and provided explanations for the transactions, which were not further verified by the Department. The appellant contended that the burden of proof was not discharged by the Department and that the show cause notice was disposed of inadequately.

The Authorized Representative for the Department argued that Section 123 of the Customs Act was rightly invoked, shifting the burden of proof to the appellant. They claimed that the appellant failed to produce essential documents supporting their claims, thus justifying the confiscation of the gold and imposition of penalties. The Tribunal noted the lack of documentary evidence at the time of seizure but acknowledged the appellant's explanations regarding the procurement and transfer of the gold.

The Tribunal found that the Original Adjudicating Authority's decision was cryptic and lacked a detailed examination of the appellant's defense. The Tribunal emphasized the importance of evaluating evidence in cases of smuggling charges, ensuring a fair opportunity for the accused to present their case. Consequently, the matter was remanded back to the Original Adjudicating Authority for a detailed, speaking order within three months, allowing the appellant to provide necessary documents and attend a personal hearing. The order of the Commissioner (Appeals) was set aside, and the appeal was allowed by way of remand.