2013 (9) TMI 247 - AT - Customs

Tribunal Upholds Commissioner's Decision on Gold Confiscation, Rejects Department's Appeals

COMMISSIONER OF CUSTOMS & CENTRAL EXCISE VISAKHAPATNAM Versus KEERTHI KUMAR JAIN & Others

The Tribunal upheld the Commissioner's decision, rejecting the department's appeals against the order setting aside the confiscation of gold and penalties ... Confiscation of goods - The expert opinion given by the assayer that the gold of purity 995 could not have been manufactured by any venture in India was irrelevant as the respondents were claiming that the gold was only part of what was imported - Held that:- It was incumbent on the department to rely on evidence to show the illicit nature of the seized gold mound and pieces of gold - There was no such evidence adduced by the department - no verification had been conducted with the prospective dealers. No valid reasons had been adduced to doubt the correctness of the above findings especially when it had been held that Section 123 cannot be applied - The claim that the respondents marked the mound of gold with the words 'CHI ESSAYEUR FONDEUR' as the mound was part of the imported gold had been rightly accepted by the Commissioner (Appeals) - the documents given in respect of substantial quantity of the seized gold produced by Keerthi Kumar Jain stands accepted by the department - the acceptance of the evidence by the Commissioner (Appeals) in respect of the balance quantity of gold calls for no interference – Decided against revenue Issues:- Confiscation of gold and imposition of penalties- Applicability of Section 123 of the Customs Act- Burden of proof on the respondents- Evidence of illicit nature of seized gold- Benefit of doubt to the respondentsConfiscation of Gold and Imposition of Penalties:The appeals arose from an order confiscating gold and imposing penalties on three respondents, which was set aside by the Commissioner (Appeals). The department contended that the documents provided by the respondents did not correspond to the material facts, and the Commissioner erred in setting aside the confiscation order. The department relied on a previous case to support its argument.Applicability of Section 123 of the Customs Act:The respondents argued that they were not importers but dealers who purchased gold from an importer, and the gold seized by the police was part of a genuine transaction. They claimed that the burden of proof under Section 123 should not be on them as the gold was seized by police authorities and handed over to customs. They provided documents related to the procurement of gold bars to support their case.Burden of Proof on the Respondents:The Tribunal noted that the gold seized was handed over to customs based on the order of the Mandal Revenue Officer, indicating the status of one respondent as a dealer of foreign gold. As the gold was not directly seized from the respondents, Section 123 of the Customs Act could not be invoked. The department failed to provide evidence of the illicit nature of the seized gold, and no verification was done with prospective dealers.Evidence of Illicit Nature of Seized Gold:The Commissioner (Appeals) gave the benefit of doubt to the respondents, considering the probability that the gold was imported and that the markings on the gold indicated its imported nature. The Tribunal upheld the Commissioner's findings, stating that the defense put forth by the appellants was more probable, especially since a substantial portion of the seized gold had been proved to be correct.Benefit of Doubt to the Respondents:The Tribunal rejected the department's appeals, emphasizing that no valid reasons were presented to doubt the Commissioner's findings. The acceptance of the evidence regarding the seized gold, along with the correctness of the documents for a significant portion of the gold, led to the rejection of the appeals.In conclusion, the Tribunal upheld the Commissioner's decision, rejecting the department's appeals against the order setting aside the confiscation of gold and penalties imposed on the respondents.