1985 (3) TMI 279 - AT - Customs

Tribunal Decision on Gold Bars Seizure: Burden of Proof, Knowledge, and Penalties Explained

MRS. SHEELA SUMBALY AND MRS. NEELA RAINA Versus COLLECTOR OF CENTRAL EXCISE AND CUSTOMS, NEW DELHI

The Tribunal found that the seizure of gold bars occurred on 4-11-1981 by the Directorate of Revenue Intelligence, making Section 123 of the Customs Act ... - Issues Involved:1. Seizure of gold bars and applicability of Section 123 of the Customs Act.2. Conscious possession and knowledge of the gold bars by Mrs. Neena Raina and Mrs. Sheela Sumbaly.3. Validity of statements made by deceased individuals.4. Burden of proof regarding the smuggled nature of the gold bars.5. Imposition and quantum of penalties under the Customs Act and the Gold (Control) Act.Detailed Analysis:1. Seizure of gold bars and applicability of Section 123 of the Customs Act:The central issue was whether the seizure of the gold bars occurred on 3-11-1981 by the Enforcement Directorate or on 4-11-1981 by the Directorate of Revenue Intelligence (DRI), which are Customs Officers. The Tribunal found that the actual seizure took place on 4-11-1981 by the DRI, making Section 123 applicable. This section shifts the burden of proof to the appellants to show that the gold bars were not smuggled goods. The Tribunal held, 'We hold that there was no seizure on 3-11-81 and that the actual seizure took place on 4-11-81 only.'2. Conscious possession and knowledge of the gold bars by Mrs. Neena Raina and Mrs. Sheela Sumbaly:The Tribunal examined whether Mrs. Neena Raina and Mrs. Sheela Sumbaly had conscious possession and knowledge of the gold bars. For Mrs. Raina, the Tribunal found no evidence to suggest she knew the contents of the cloth bag. Her statement that she was unaware of the gold bars until the search was corroborated by her actions and statements. The Tribunal concluded, 'We are satisfied that at any rate so far as Smt. Neena Raina is concerned, there is no clinching evidence established that she was in conscious possession of these foreign marked gold bars.'For Mrs. Sumbaly, her own handwritten statement on 5-11-1981 indicated she knew the contents of the cloth bag were gold bars given by her mother-in-law. The Tribunal found her subsequent disclaimers unconvincing, stating, 'In the face of these statements the explanation of Smt. Sumbaly, that she was unaware of the contents of the cloth bag until they were seized by the officers, is not at all acceptable.'3. Validity of statements made by deceased individuals:The Tribunal addressed the admissibility of statements made by Mr. Dina Nath Sumbaly, who had died before the adjudication proceedings. The Tribunal held that such statements could be relied upon, stating, 'The statement could be relied upon by the departmental officials though Shri Dina Nath had subsequently died and was, therefore, not available for examination during the actual adjudication proceedings.'4. Burden of proof regarding the smuggled nature of the gold bars:The Tribunal noted that under Section 123 of the Customs Act, once the gold bars were seized by Customs Officers, the burden of proof shifted to the appellants to prove that the gold was not smuggled. The Tribunal found that neither appellant had discharged this burden satisfactorily. The Tribunal stated, 'Under Section 123 of the Customs Act, the burden rests on the appellants to prove that they were not smuggled into India.'5. Imposition and quantum of penalties under the Customs Act and the Gold (Control) Act:The Tribunal upheld the confiscation of the gold bars and the penalties imposed on Mrs. Sheela Sumbaly but reduced the penalties in consideration of her age and respectable background. The Tribunal reduced the penalty under Section 112 of the Customs Act to Rs. 10,000 and under the Gold (Control) Act to Rs. 2,500. The Tribunal stated, 'We are of the opinion that the circumstances mentioned above warrant a lenient view in respect of penalties.'Conclusion:The Tribunal allowed the appeals of Mrs. Neena Raina, setting aside the penalties imposed on her. The appeals of Mrs. Sheela Sumbaly were dismissed except for a reduction in the penalties. The Tribunal concluded, 'Appeal Nos. C-8/82-NRB and GC-158/83-NRB preferred by Smt. Neena Raina are allowed and the penalty imposed on her is set aside. Appeal Nos. C-6/82-NRB and GC-159/83-NRB are dismissed except to the limited extent of reducing the penalties on Smt. Sheela Sumbaly to the extent indicated above.'