2013 (9) TMI 141 - AT - Customs

Court Upholds Confiscation of Gold Biscuits in Importation Case

SHRI M SRINIVASA RAO & SHRI J SATYANARAYANA Versus COMMISSIONER OF CENTRAL EXCISE, CUSTOMS & SERVICE TAX, BHUBANESWAR-I

The court upheld the confiscation of gold biscuits seized from the appellants at Bhubaneswar Railway Station due to lack of evidence of legal importation. ... Seizure of goods - Gold coins of foreign origin seized on the belief of being smuggled into India - Held that:- Gold with foreign markings when recovered from the possession of a person and the person from whose possession it was recovered - failed to explain reasonably about the licit procurement of such gold to the officers - the same was liable for seizure and confiscation - as gold was a notified goods u/s 123 - the burden lies on the Appellant to satisfy the authorities that the gold biscuits that were seized from their possession, not only procured legally by them from the NRIS as claimed by them - but also the gold were licitly brought into India - on which appropriate Customs duty had been discharged – the sale letters issued by the respective vendors were no doubt relevant and might carry some evidentiary value - but would definitely require corroboration in the form of documentary evidence of licit import of the gold by the respective NRI vendors. Confiscation of goods u/s 111(d) - whether the description of the gold as mentioned in the seizure list tallies with the description shown in the baggage receipts - in the case of 05 pieces of gold biscuits seized claimed to be covered under baggage receipt No.16891 - the description in the baggage receipt more or less tallies with the description mentioned in the seizure list – Thus absolute confiscation of 05 pcs. of gold biscuits seized cannot be sustained - the other one piece of gold biscuit the description mentioned in the seizure list as 'Swiss Bank Corporation', does not at all conform to the description shown in the baggage receipt no.16891 - the absolute confiscation of the other one piece of gold biscuit was upheld. Penalty u/s 112 – as confiscation of five gold coins were set aside – thus the penalty was also reduced accordingly – decided partly in favour of assessee. Issues Involved:1. Legality of the gold biscuits seized from the appellants.2. Validity of the baggage receipts and sale letters produced by the appellants.3. Justification of the penalties imposed on the appellants.Detailed Analysis:Legality of the Gold Biscuits Seized from the Appellants:The Customs officers intercepted the appellants at Bhubaneswar Railway Station and seized gold biscuits of foreign origin from their possession, suspecting them to be smuggled. The appellants were unable to provide satisfactory evidence that the gold was legally imported into India. The adjudicating authority and the Commissioner (Appeal) upheld the confiscation of the gold biscuits.Validity of the Baggage Receipts and Sale Letters:The appellants produced baggage receipts and sale letters to prove the legal importation of the gold biscuits. The Tribunal had earlier remanded the case for verification of these documents. Upon verification, the baggage receipts were found to be genuine. However, the adjudicating authority noted discrepancies between the descriptions in the baggage receipts and the seized gold biscuits.1. For Shri M. Srinivas Rao (Appeal No. 567/09):- The descriptions of the gold biscuits in the baggage receipts did not match those in the seizure list.- Despite the appellant's argument that 'J.M.' in the baggage receipt referred to Johnson Matthey, the adjudicating authority found no documentary evidence to support this claim.- Consequently, the absolute confiscation of all six gold biscuits seized from Shri M. Srinivas Rao was upheld.2. For Shri J. Satyanarayana (Appeal No. 568/09):- Five pieces of gold biscuits weighing 583.300 grams broadly matched the descriptions in the baggage receipts, except for minor discrepancies.- One piece of gold biscuit weighing 116.650 grams did not conform to the description in the baggage receipt.- Therefore, the absolute confiscation of the five pieces of gold biscuits was set aside, but the confiscation of the one piece was upheld.Justification of the Penalties Imposed:The penalties imposed on the appellants were initially reduced by the Commissioner (Appeal) and later re-imposed by the adjudicating authority upon re-adjudication. The Tribunal further reviewed the penalties in light of the findings:1. For Shri M. Srinivas Rao (Appeal No. 567/09):- The penalty imposed on Shri M. Srinivas Rao was upheld due to the discrepancies in the descriptions of the gold biscuits.2. For Shri J. Satyanarayana (Appeal No. 568/09):- Given that five pieces of gold biscuits were found to be legally imported, the penalty on Shri J. Satyanarayana was reduced to Rs. 20,000.Conclusion:- Appeal No. 567/09 (Shri M. Srinivas Rao): Dismissed, and the absolute confiscation of the six gold biscuits and the penalty were upheld.- Appeal No. 568/09 (Shri J. Satyanarayana): Partly allowed, with the absolute confiscation of five gold biscuits set aside and the penalty reduced to Rs. 20,000.(Pronounced in the Court on 28/02/2012)