2020 (9) TMI 134 - AT - Customs

Tribunal overturns order, finding appellant not liable to prove gold recovery. Confiscation and penalty deemed unjustified. Appeal granted.

The Tribunal set aside the order, ruling that the appellant was not required to prove the recovery of gold as it was not established. The confiscation of ... Absolute Confiscation - Gold - old and used Mobile Phone - Indian Currency - Claim of innocence and bonafide - cross-examination of witnesses - Section 108 of the Customs Act, 1962 - HELD THAT:- The authorities below proceeded on the basis of assumption of recovery of gold from the possession of the appellant. The appellant wanted cross-examination of the witnesses named in the BSF Seizure Memo, which has not been granted. The factum of recovery as has been mentioned in the BSF Seizure Memo and the statement of the appellant contained in the said Memo has been disputed by the appellant. Before the Customs Authority while giving statement under Section 108 of the Customs Act, 1962, the appellant in his statements dated 04-04-2016 and 05-04-2016 repeatedly stated that he is not involved in any illegal smuggling activity. He did not know any person whose names are appearing in the BSF Seizure Memo. Recovery of the gold from the appellant has not been proved and hence, he was not required to discharge the burden under Section 123 of the Customs Act, 1962. As there is no claimant of the gold, the confiscation of gold handed over by the BSF Personnel to the Customs Authority is justified. Regarding seizure and confiscation of Mobile Phone and Indian currency, since the illegal importation of gold by the appellant has not been proved, the confiscation of the said old and used Mobile Phone valued at ₹ 200/- and Indian currency of ₹ 6,000/- cannot be made. Adjudicating Authority proceeded on the basis of probability that the Indian currency may be the advance received for smuggling of gold. The learned Commissioner did not give any finding on this point but upheld the confiscation - Appeal allowed - decided in favor of appellant. Issues Involved:1. Confiscation of gold under Section 111(b) and 111(d) of the Customs Act, 1962.2. Confiscation of mobile phone and Indian currency under Section 111(b) and 111(d) of the Customs Act, 1962.3. Imposition of penalty under Section 112(b) of the Customs Act, 1962.4. Denial of cross-examination of witnesses.5. Legality of the proceedings and service of notice for hearing.Issue-wise Detailed Analysis:1. Confiscation of Gold:The appellant challenged the confiscation of 473 grams of gold valued at Rs. 12,97,912/- under Section 111(b) and 111(d) of the Customs Act, 1962. The appellant contended that the gold was not seized from his possession and he was neither the owner nor the claimant of the gold. The Customs Authorities based their decision on the BSF Seizure Memo, which the appellant disputed, stating that he was forced to sign a document at night without understanding its contents. The Tribunal found that the recovery of gold from the appellant was not proven and hence, he was not required to discharge the burden under Section 123 of the Customs Act, 1962. Consequently, the confiscation of gold handed over by the BSF Personnel to the Customs Authority was justified due to the lack of a claimant.2. Confiscation of Mobile Phone and Indian Currency:The appellant also contested the confiscation of his mobile phone valued at Rs. 200/- and Indian currency of Rs. 6,000/- under Section 111(b) and 111(d) of the Customs Act, 1962. The Adjudicating Authority had confiscated these items on the assumption that the Indian currency was an advance received for smuggling gold. The Tribunal found that since the illegal importation of gold by the appellant was not proven, the confiscation of the mobile phone and Indian currency could not be sustained. The Tribunal noted that the Adjudicating Authority proceeded based on probability, which was not sufficient for confiscation.3. Imposition of Penalty:A penalty of Rs. 1,25,000/- was imposed on the appellant under Section 112(b) of the Customs Act, 1962. The appellant argued that there was no evidence to show his involvement in any goods that were confiscable under Section 111 of the Customs Act, 1962. The Tribunal agreed with the appellant, stating that the involvement of the appellant in the alleged illegal importation of gold was not proven, and therefore, the imposition of the penalty was not maintainable in law.4. Denial of Cross-Examination of Witnesses:The appellant requested cross-examination of the witnesses named in the BSF Seizure Memo, which was denied. The Tribunal noted that the appellant's request for cross-examination was legitimate and should have been granted to ensure a fair trial. The denial of this request weakened the case against the appellant, as the factum of recovery and the statements in the BSF Seizure Memo were disputed.5. Legality of the Proceedings and Service of Notice:The appellant contended that he did not receive any notice of hearing, which led to the proceedings being conducted in his absence. The Revenue produced copies of the notices and argued that the notices were sent and did not return, which they considered sufficient proof of service. However, the Tribunal emphasized that proof of service is required and cannot be assumed or presumed. The Tribunal found merit in the appellant's argument regarding the lack of proper service of notice.Conclusion:The Tribunal set aside the impugned order, finding that the recovery of gold from the appellant was not proven, and hence, he was not required to discharge the burden under Section 123 of the Customs Act, 1962. The confiscation of the mobile phone and Indian currency was also not maintainable, and the imposition of the penalty was unjustified. The appeal of the appellant was allowed with consequential relief, if any.