2015 (10) TMI 2132 - AT - Customs

Appeals granted, confiscation overturned, penalties lifted for gold biscuits possession. Proof of lawful acquisition key.

SRI NAND KISHORE MODI AND SRI RAJENDRA KUMAR DAMANI Versus COMMISSIONER OF CUSTOMS (PREV), WB

The Tribunal allowed the appeals, setting aside the confiscation of the 22 pcs. of gold biscuits and the penalties imposed on the appellants. The Tribunal ... Smuggling of goods or not - foreign marked gold – Alleged that goods were seized from waste paper box into which Shri Mahendra Bahadur (employee of Appellant) has hastly dropped the packet containing gold bars – Appellant contends that gold biscuits have been procured by him legally from M/s. Anand Sales Pvt. Ltd. - Confiscation of goods under Section 111(b) and (d) and penalties imposed thereafter under Section 112 – Held That:- On investigation by Customs Officer it was found that Shri Nand Kishore Modi of M/s. Anand Sales Pvt. Ltd. has confirmed the sale of 22 pcs. of gold biscuits to Shri R.K. Damani and also that the same has been procured by him from ABN AMRO BANK, Russel Street Branch, Kolkata - Recovery of goods was conflictingly shown to be from the pocket of Shri Mahendra Bahadur and as well as from the waste paper box – Confiscation set aside and goods handed over to the owner – No penalties imposed – Appeal disposed in favour of Appellant with consequential relief. Issues Involved:1. Whether the foreign marked gold seized by the officers of Customs on 14/2/2001 was smuggled gold.2. Whether the purchase bills for the gold biscuits produced by the appellant Shri Rajendra Kumar Damani were covering the seized gold biscuits.3. The legality of the confiscation of 22 pcs. of gold biscuits and the imposition of penalties on the appellants.Issue-wise Detailed Analysis:1. Whether the foreign marked gold seized by the officers of Customs on 14/2/2001 was smuggled gold:The Revenue argued that the seized gold biscuits were smuggled as neither Shri Mahendra Bahadur nor Shri Rajendra Kumar Damani could produce any documents regarding the licit acquisition of the gold at the time of seizure. The appellant contended that the gold was legally acquired and produced purchase bills later. The Tribunal found discrepancies in the facts presented by the Revenue, including conflicting statements about the location of the gold biscuits' recovery and the identity of the owner. The Tribunal noted that the gold was not seized in a customs area or near an international border, and referenced the case of Samir Kumar Roy Vs. CC(P), Calcutta, which established that the mere possession of foreign marked gold does not imply smuggling.2. Whether the purchase bills for the gold biscuits produced by the appellant Shri Rajendra Kumar Damani were covering the seized gold biscuits:The appellant produced two bills from M/s. Anand Sales Pvt. Ltd., which were confirmed by Shri Nand Kishore Modi of M/s. Anand Sales Pvt. Ltd. The Tribunal observed that although the documents were not produced at the time of the initial seizure, the subsequent confirmation of the purchase from a legitimate source (ABN AMRO BANK) supported the appellant's claim. The Tribunal held that the appellant successfully discharged the burden of proving the licit acquisition of the gold biscuits.3. The legality of the confiscation of 22 pcs. of gold biscuits and the imposition of penalties on the appellants:The Tribunal referenced the case of S.K. Chains, which highlighted the widespread availability of foreign marked gold in India due to liberalized import policies. It concluded that the Revenue failed to establish that the seized gold was smuggled. Consequently, the confiscation of the gold biscuits and the imposition of penalties were deemed unjustified. The Tribunal set aside the confiscation and penalties, directing that the gold biscuits be returned to the rightful owner.Conclusion:The Tribunal allowed the appeals, setting aside the confiscation of the 22 pcs. of gold biscuits and the penalties imposed on the appellants. The Tribunal emphasized the discrepancies in the Revenue's case and the appellant's successful demonstration of the licit acquisition of the gold biscuits through valid purchase documents. The judgment reinforced the principle that possession of foreign marked gold in India does not inherently indicate smuggling, especially in the absence of evidence linking the gold to illicit activities.