2022 (9) TMI 1226 - AT - Customs

Tribunal upholds confiscation of gold bars, penalties for failure to prove legality.

Shri Mukul Aggarwal and Shri Ankit Bansal Versus Commissioner of Customs (Preventive), New Delhi

Shri Mukul Aggarwal and Shri Ankit Bansal Versus Commissioner of Customs (Preventive), New Delhi - TMI Issues Involved:1. Legitimacy of the seized gold bars.2. Compliance with Section 138B of the Customs Act, 1962.3. Burden of proof under Section 123 of the Customs Act, 1962.4. Admissibility of statements and documentary evidence.5. Imposition of penalties on the appellants.Detailed Analysis:1. Legitimacy of the Seized Gold Bars:The Customs Preventive, New Delhi intercepted a person carrying three gold bars inscribed with 'Rand Refinery Ltd, South Africa, 1000g GOLD 9950 FINENESS 2017.' The person identified himself as an employee of M/s. Kalindi Traders, Mathura, and claimed the gold was legally purchased. However, the investigation revealed inconsistencies, including the absence of a delivery challan during the initial search, which was later produced. The Tribunal found the appellant's defense contradictory, particularly regarding the purity of the gold, which remained 995 even after alleged impurities were added. The Tribunal concluded that the seized gold was reasonably believed to be of foreign origin and smuggled.2. Compliance with Section 138B of the Customs Act, 1962:The Tribunal examined whether the compliance with Section 138B was mandatory and whether non-compliance amounted to no evidence. Section 138B requires the adjudicating authority to examine witnesses before relying on their statements. The Tribunal held that the statements of Shri Ankit Bansal and other witnesses were inadmissible due to non-compliance with Section 138B. This decision was supported by precedent cases, including M/s. Anil Gadodia vs. C.C, New Delhi (Prev.).3. Burden of Proof under Section 123 of the Customs Act, 1962:The Tribunal noted that under Section 123, once goods are seized under the reasonable belief of being smuggled, the burden shifts to the possessor or owner to prove otherwise. The appellant failed to provide sufficient evidence to discharge this burden. The Tribunal cited cases such as Indru Ramchand Vs. Union of India and Santosh Gupta Vs. Union of India to support its conclusion that the appellant did not prove the gold was legally acquired.4. Admissibility of Statements and Documentary Evidence:The Tribunal held that the statements of Shri Ankit Bansal, Shri Pankaj Tayal, and Shri Vivek Aggarwal were inadmissible due to non-compliance with Section 138B. The documentary evidence, including the Panchnama, jewelry appraiser's report, tax invoices, purchase register, and bank statements, was scrutinized. The Tribunal found discrepancies in the appellant's defense, particularly the delayed submission of the delivery challan and the implausibility of the gold's purity remaining 995 after adding impurities. The Tribunal concluded that the documentary evidence was insufficient to prove the gold was not smuggled.5. Imposition of Penalties on the Appellants:The Tribunal upheld the penalties imposed on Shri Mukul Aggarwal and Shri Ankit Bansal. It found that the appellant's conduct during the investigation and the absence of genuine documents to prove the legitimate possession of the gold justified the penalties. The Tribunal emphasized that Shri Ankit Bansal, as the possessor of the gold, was equally responsible for proving its valid possession.Conclusion:The Tribunal upheld the confiscation of the three gold bars and the imposition of penalties on the appellants. It dismissed both appeals, concluding that the appellants failed to prove the gold was legally acquired and not smuggled. The Tribunal's decision was based on the reasonable belief that the seized gold was of foreign origin, the non-compliance with Section 138B, and the insufficiency of the documentary evidence provided by the appellants.