2017 (3) TMI 1113 - AT - Customs

Tribunal returns gold bars and car to AIMR Jewels, sets aside penalties.

The Tribunal allowed the appeal by AIMR Jewels Pvt. Ltd., setting aside the confiscation of 12 gold bars and a Toyota Etios Liva car by the Customs ... Onus of proof as to licit source of acquisition under Section 123 of the Customs Act - confiscation of goods and conveyance under the Customs Act - requirement to prove source not source-of-source - pre-authenticated road permit and challan as evidence of lawful transportOnus of proof as to licit source of acquisition under Section 123 of the Customs Act - pre-authenticated road permit and challan as evidence of lawful transport - requirement to prove source not source-of-source - confiscation of goods and conveyance under the Customs Act - Whether the appellant discharged the onus under Section 123 of the Customs Act and whether the confiscation of the seized gold bars, the vehicle and the penalties could be sustained. - HELD THAT: - The Tribunal found that the appellant produced tax invoices evidencing purchase from a registered dealer, demonstrated payment through banking channel (RTGS), and produced the transit challan and a road permit pre-authenticated by the Sales Tax Department. The statutory onus under Section 123 requires the person in possession to explain the licit source of acquisition of the specified item; it does not extend to proving the source of that source. Minor discrepancies in marking or numbering on the bars, relied upon by the Commissioner to reject the chain of transactions, were not held to be sufficient to negate the documentary and banking evidence establishing purchase and lawful transport. On these facts the appellant discharged the onus required by Section 123(1) and (2). Consequently, the confiscation of the gold and the vehicle, and the penalties and redemption fine imposed, were held to be untenable. The Tribunal directed return of the gold and the car within 30 days and held the appellant entitled to consequential benefits. [Paras 8, 9]Impugned order of absolute confiscation of the gold and confiscation of the car, and all penalties, set aside; gold and vehicle to be returned to the appellant forthwith, preferably within 30 days.Final Conclusion: Appeal allowed; confiscation of the seized gold and the vehicle and the penalties set aside on finding that the appellant discharged the onus under Section 123 by producing invoices, bank payment evidence and transit documents; return of gold and car ordered within 30 days and consequential benefits permitted. Issues Involved:1. Confiscation of 12 gold bars and Toyota Etios Liva car.2. Imposition of penalties on various individuals and entities.3. Legitimacy of the gold's acquisition and transportation.4. Applicability of Section 123 of the Customs Act.5. Compliance with procedural requirements.Issue-wise Detailed Analysis:1. Confiscation of 12 Gold Bars and Toyota Etios Liva Car:The appellant, AIMR Jewels Pvt. Ltd., challenged the absolute confiscation of 12 gold bars and a Toyota Etios Liva car by the Customs Authority. The gold bars were seized during transit from Delhi to Agra by the Sales Tax Authority and later confiscated by the Customs Authority. The car used for transportation was also confiscated, with an option to redeem it on payment of Rs. 1 Lakh. The Tribunal found that the appellant had provided sufficient documentation, including tax invoices and banking records, to prove the legitimate purchase and transportation of the gold bars. The Tribunal ruled that the confiscation was untenable and ordered the return of the gold bars and the car to the appellant.2. Imposition of Penalties on Various Individuals and Entities:Penalties were imposed on Shri Swadesh Verma (Director of AIMR Jewels Pvt. Ltd.), the appellant company, the driver Shri Ajay Kumar, and Mrs. Ruchi Rastogi (previous owner of the car). The proposed penalties on other individuals and entities were dropped. The Tribunal set aside all penalties, finding that the appellant had discharged their onus under Section 123 of the Customs Act by providing valid documentation for the gold's acquisition and transportation.3. Legitimacy of the Gold's Acquisition and Transportation:The appellant provided evidence of purchasing the gold from M/s Bilasa & Sons Pvt. Ltd., which had, in turn, acquired it from M/s Supreme Gold. The gold was part of a consignment imported by M/s HHEC from Dubai. The Tribunal found that the chain of transactions was sufficiently established through proper tax invoices, banking records, and other documentation. The Tribunal held that minor discrepancies in the markings on the gold bars did not invalidate the legitimacy of the acquisition and transportation.4. Applicability of Section 123 of the Customs Act:The Tribunal considered whether Section 123 of the Customs Act, which shifts the burden of proof regarding the licit acquisition of gold to the appellant, was applicable. The Tribunal ruled that the appellant had successfully discharged their burden by providing valid documentation and that the burden of proof had shifted back to the Customs Authority. The Tribunal also noted that the initial seizure by the Sales Tax Authority rather than the Customs Authority weakened the applicability of Section 123 in this case.5. Compliance with Procedural Requirements:The Tribunal noted that the appellant had complied with procedural requirements by providing a road permit pre-authenticated by the Sales Tax Department, proper challans, and maintaining records of the road permits. The Tribunal found that the Customs Authority had not adequately considered these documents and had erroneously confiscated the gold and the car.Conclusion:The Tribunal allowed the appeal, setting aside the confiscation of the gold bars and the car, and ordered their return to the appellant. All penalties imposed were also set aside. The Tribunal emphasized that the appellant had discharged their onus under Section 123 of the Customs Act and that the Customs Authority had not provided sufficient evidence to justify the confiscation. The appellant was entitled to the return of the gold bars and the car within 30 days, along with any consequential benefits.