2025 (1) TMI 1380 - AT - Customs

Absolute confiscation of gold seized from the - option of redemption fine - levy of penalty - town seizure - concrete evidence for confiscating the gold or not - discharge of burden of prove - HELD THAT - Only reasonable belief is sufficient for Department side that is recovered gold smuggled goods or not. In these circumstances when recovered gold have foreign marking and no any supporting document produced by the appellant so it was reasonable ground for Officer concerned to believe otherwise. Therefore in the fact and circumstances burden to prove otherwise on appellant. Hon ble Supreme Court in the case of State of Gujarat Vs Shri Mohan Lal Jitamalji Porwal and Another 1987 (3) TMI 111 - SUPREME COURT in which Hon ble Supreme Court has held The circumstances have to be viewed from the experienced eye of the officer who is well equipped to interpret the suspicious circumstances and to from a reasonable belief in the light of the said circumstances. Seized gold of 2 FG biscuits with foreign marking as VALCAMBI SUSSIE with serial no. AJ855365 AJ855366. In this regard appellant failed to produce any documentary evidence which relates to seized gold biscuit. Appellant has stated in his statement dated 22.06.2022 that he was given Rs. 10, 50, 000/- by Shri P. Radha Krishna for purchase of 2 gold biscuits from Shri Ashok Kumar Chennai. However this part of his statement was denied by Shri P. Radha Krishna and also stated that he did not know anyone by name Shri Ashok Kumar from Chennai and also denied to given money of Rs. 10, 50, 000/- requested appellant to get gold biscuits. Shri Ashok Kumar from Chennai did not turn up to respond Summons. Therefore appellant failed to prove that the seized gold biscuit is not illicit - Department has established that seized gold relates to smuggled gold hence appellant has failed to prove otherwise. In this case no any supporting evidence by the appellant and it is also important to mention that statement as given by the appellant denied by concerned person Shri P. Radha Krishna. Mr Ashok Kumar also has not come to support Appellant s version in spite of serving proper summons. The seized gold was tested by a recognised agency. Therefore no any infirmity in the process of testing. The burden under the Section 123 of Customs Act 1962 which is only of a reasonable belief is effectively discharged by the Department who initiated the action on the basis of the seizure and the recorded statements of the concerned person. Then the onus to prove that the gold was not smuggled so as to reasonable belief entertained by the Department shifted and is squarely rested on his shoulder. But in this case appellant is failed to prove that seized gold is not smuggled. Conclusion - The appellant failed to prove that the seized gold is not smuggled. Impugned order based on facts and law and proper appreciation of evidence. No any interference required in the impugned order. Therefore appeal is liable to be dismissed. Appeal dismissed.

Summary

ISSUES PRESENTED and CONSIDERED

The core legal issues considered in this judgment include:

1. Whether the absolute confiscation of gold seized from the appellant was justified under the Customs Act, 1962.

2. Whether the appellant was entitled to redeem the confiscated gold upon payment of a redemption fine instead of absolute confiscation.

3. Whether the penalties imposed under Sections 112(a) and 112(b) of the Customs Act were correctly applied.

4. Whether the burden of proof under Section 123 of the Customs Act was appropriately applied to the appellant.

ISSUE-WISE DETAILED ANALYSIS

1. Justification for Absolute Confiscation of Gold

Relevant Legal Framework and Precedents: The confiscation was based on Sections 111(d) and 111(o) of the Customs Act, 1962, which pertain to the prohibition of importation of goods and goods that have been imported or attempted to be exported contrary to any prohibition imposed by law. Section 123 of the Customs Act places the burden of proof on the person from whose possession goods are seized to prove that they are not smuggled.

Court's Interpretation and Reasoning: The Court upheld the confiscation, noting that the seized gold had foreign markings and the appellant failed to provide documentation proving its legal acquisition. The Court emphasized that the reasonable belief of the officers, supported by the lack of documentation, was sufficient to justify the confiscation.

Key Evidence and Findings: The seized gold biscuits were marked with "VALCAMBI SUSSIE" and lacked accompanying documentation. The appellant's statement regarding the purchase of gold was contradicted by other involved parties, and no corroborative evidence was provided.

Application of Law to Facts: The Court found that the appellant did not discharge the burden of proof required under Section 123, as they failed to provide evidence to counter the presumption of smuggling.

Treatment of Competing Arguments: The appellant's reliance on various judgments was dismissed as those cases involved different circumstances, such as the absence of foreign markings on the gold.

Conclusions: The confiscation was upheld as the appellant failed to prove the legality of the gold's acquisition.

2. Entitlement to Redemption of Gold

Relevant Legal Framework: Section 125 of the Customs Act provides discretionary power to allow redemption of confiscated goods upon payment of a fine.

Court's Interpretation and Reasoning: The Court noted that redemption is discretionary and should be based on the facts and circumstances of each case. Given the foreign markings and lack of documentation, the Court found no reason to exercise discretion in favor of the appellant.

Conclusions: The appellant was not entitled to redeem the confiscated gold.

3. Appropriateness of Penalties under Sections 112(a) and 112(b)

Relevant Legal Framework: Sections 112(a) and 112(b) of the Customs Act pertain to penalties for improper importation of goods.

Court's Interpretation and Reasoning: The penalties were justified as the appellant was found to have engaged in activities that contravened the Customs Act. The Court noted the appellant's history of similar offenses, further justifying the penalties.

Conclusions: The penalties were upheld as appropriate given the appellant's conduct and history.

4. Burden of Proof under Section 123

Relevant Legal Framework: Section 123 of the Customs Act places the burden of proof on the possessor of goods to prove they are not smuggled when seized under reasonable belief of smuggling.

Court's Interpretation and Reasoning: The Court found that the burden was correctly applied to the appellant, who failed to provide sufficient evidence to rebut the presumption of smuggling.

Conclusions: The application of the burden of proof was upheld as correct.

SIGNIFICANT HOLDINGS

The Court established the following core principles:

- The presence of foreign markings on goods, coupled with the absence of documentation, is sufficient to form a reasonable belief of smuggling under Section 123 of the Customs Act.

- The discretionary power to allow redemption of confiscated goods under Section 125 should be exercised judiciously, considering the specifics of each case.

- A history of similar offenses can justify the imposition of penalties under Sections 112(a) and 112(b) of the Customs Act.

Final Determinations on Each Issue:

- The absolute confiscation of the gold was justified.

- The appellant was not entitled to redeem the confiscated gold.

- The penalties imposed were appropriate and upheld.

- The burden of proof was correctly placed on the appellant, who failed to discharge it.

The appeal was dismissed, affirming the decisions of the lower authorities.