High Court rules Single Member Bench lacked jurisdiction under Customs Act, remands case to Division Bench. Appellant's gold release ordered.

The High Court found that the Single Member Bench lacked jurisdiction under Section 129C of the Customs Act, 1962. The matter was remanded to a Division Bench. The appellant proved the legitimacy of the seized gold through documented lawful import and payment of customs duty. The burden of proof under Section 123 was discharged. The Tribunal set aside the confiscation order and directed the release of the gold to the appellant within 21 days, deeming the Show Cause Notice unsustainable.

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Issues Involved:
1. Jurisdiction of Single Member Bench.
2. Legitimacy of the seized gold.
3. Compliance with Section 123 of the Customs Act, 1962.
4. Confiscation of the vehicle used for transporting the gold.
5. Validity of the Show Cause Notice.

Detailed Analysis:

1. Jurisdiction of Single Member Bench:
The Hon’ble High Court of Allahabad found that the matter was beyond the jurisdiction of the Single Member Bench of the Tribunal in terms of Section 129C of the Customs Act, 1962. Consequently, the High Court set aside the Final Order No.70267/2017 dated 20/01/2017 and remanded the matter back to the Tribunal for a fresh decision on merits by a Division Bench.

2. Legitimacy of the Seized Gold:
The appellant M/s AIMR Jewels Pvt. Ltd. was engaged in the trade of gold and silver. On 11/07/2014, 12 Kg of gold was seized by the Commercial Tax Department of Uttar Pradesh and subsequently detained by the Customs Department. The gold was being transported from Chandni Chowk, New Delhi to Agra under a valid Challan. The appellant provided a road permit, which was initially not produced by the driver at the time of interception but was later submitted to the authorities. The appellant established the purchase of the gold from M/s Bilasa & Sons Pvt. Ltd., which in turn had purchased it from Supreme Gold, who had imported it from M/s HHEC. The entire trail of lawful import and payment of customs duty was documented through various traders and banking channels.

3. Compliance with Section 123 of the Customs Act, 1962:
Section 123 of the Customs Act, 1962 places the burden of proof on the person from whose possession the goods are seized to prove that they are not smuggled. The appellant provided evidence of the lawful purchase and import of the gold. However, the Revenue contended that the gold bars bore the mark 'VALCAMBI SUSSIE' instead of 'AL ETIHAD' as mentioned in a certificate dated 04/08/2014 from M/s INTL Commodities DMCC. The Tribunal found that the certificate was not a relied upon document in the Show Cause Notice, and thus, the appellant had discharged the burden of proof under Section 123.

4. Confiscation of the Vehicle:
The vehicle used for transporting the gold was also detained and subject to confiscation under Section 115(1)(a) and 115(2) of the Customs Act, 1962. The Tribunal did not provide a separate analysis on the confiscation of the vehicle, focusing instead on the legitimacy of the gold.

5. Validity of the Show Cause Notice:
The Show Cause Notice dated 09/01/2015 was based on the contention that the gold was of smuggled nature due to the discrepancy in the brand names. The Tribunal found that the certificate dated 04/08/2014, which mentioned the brand name 'AL ETIHAD', was not a relied upon document for issuing the Show Cause Notice. Therefore, the Tribunal concluded that the appellant had established the legitimate possession of the gold, and the Show Cause Notice was not tenable in law.

Conclusion:
The Tribunal set aside the impugned Order-in-Original dated 27/11/2015, holding that the appellant is entitled to the release of the seized gold within 21 days from the receipt of the order. The appeal was allowed, and the Show Cause Notice was deemed not sustainable.

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