2007 (3) TMI 11 - SC - Customs

Supreme Court Remits Case for Fresh Consideration, Emphasizes Document Accuracy

COMMISSIONER OF CUSTOMS (PREVENTIVE) Versus VIJAY DASHARATH PATEL

The Supreme Court set aside the judgments of the High Court and the Tribunal, remitting the matter back to the Tribunal for fresh consideration. The Court ... Gold- Appellant were smuggled gold and they were arrested –Authority decided that no substantial question of law for its consideration had arisen therein and appeal were allowed- Matter remitted for fresh consideration. Issues Involved:1. Legality of the seizure of 551 gold biscuits.2. Validity of the statements made under Section 108 of the Customs Act.3. Compliance with Section 123 of the Customs Act regarding the burden of proof.4. Consideration of trade practices and their evidentiary value.5. Legitimacy of the documents produced to prove the lawful possession of gold.6. The High Court's refusal to interfere based on the absence of a substantial question of law.Detailed Analysis:1. Legality of the Seizure of 551 Gold Biscuits:The case revolves around the seizure of 551 gold biscuits of foreign origin from eight individuals. The Commissioner of Customs held that the gold was smuggled, as the respondents failed to provide valid documentation proving lawful importation. The gold was found concealed in various ways, such as in shoes and body parts, suggesting illegal acquisition. The Tribunal, however, found that the respondents had provided sufficient documentary evidence, including a letter from ABN AMRO Bank confirming the lawful importation of the gold.2. Validity of the Statements Made Under Section 108 of the Customs Act:The respondents made statements under Section 108 of the Customs Act, admitting they had no documents for the legal importation of the gold. These statements were later retracted, claiming they were made under duress. The Commissioner of Customs dismissed the retractions as belated and unsupported by evidence, while the Tribunal accepted the retractions, emphasizing the trade practice of transporting gold in shoes.3. Compliance with Section 123 of the Customs Act Regarding the Burden of Proof:Section 123 of the Customs Act places the burden of proof on the person from whose possession the gold is recovered to prove it is not smuggled. The Commissioner of Customs found that the respondents failed to discharge this burden, as the documents provided did not convincingly link the seized gold to lawful importation. The Tribunal, however, held that the respondents had discharged their burden by producing documentary evidence, including the ABN AMRO Bank letter.4. Consideration of Trade Practices and Their Evidentiary Value:The Tribunal took judicial notice of the trade practice of transporting gold in shoes, which the Commissioner of Customs had dismissed as indicative of smuggling. The Supreme Court found that no evidence was presented to support the existence of such a trade practice and thus rejected the Tribunal's reliance on this factor.5. Legitimacy of the Documents Produced to Prove the Lawful Possession of Gold:The Commissioner of Customs found discrepancies in the documents produced by the respondents, such as bills and delivery challans, which lacked serial numbers and brand specifications. The Tribunal, however, accepted these documents, stating that there is no statutory requirement for invoices to describe foreign marks. The Supreme Court noted that the Tribunal failed to address the discrepancies highlighted by the Commissioner.6. The High Court's Refusal to Interfere Based on the Absence of a Substantial Question of Law:The High Court refused to interfere with the Tribunal's decision, stating that no substantial question of law arose. The Supreme Court disagreed, noting that the Tribunal had ignored material facts and legal principles, which warranted a substantial question of law. The Supreme Court emphasized that substantial questions of law arise when material facts are ignored, and legal principles are not applied correctly.Conclusion:The Supreme Court set aside the judgments of the High Court and the Tribunal, remitting the matter back to the Tribunal for fresh consideration. The Court highlighted that the Tribunal must address the discrepancies in the documents and the lack of evidence supporting the purported trade practices. The parties were allowed to raise their respective contentions before the Tribunal, ensuring that all relevant issues are thoroughly examined.