2023 (9) TMI 415 - AT - Customs

Successful Appeals Overturn Confiscation Order Due to Illegal Seizure and Non-Compliance with Timelines

Babu Ram and Neeraj Aggarwal Versus Additional Commissioner, Customs (Preventive), New Delhi

The Appeals were successful as the Tribunal set aside the Order confiscating 4Kg gold bars and imposing penalties on the appellants. The Tribunal found ... Service of SCN within stipulated time - Smuggling - Gold - foreign origin goods or not - entire case based on the confessional statement of Babu Ram - discharge of onus of proof by Revenue or not - HELD THAT:- The Appellant had filed Affidavit in support of the contention regarding non-service of SCN prior to 28.11.2018. Learned AR in response, informed that he has written to the concerned Adjudicating Authority, and the DRI/DZU on 11.5.2023 itself. However, the compliance was awaited. Accordingly, some more time was prayed and by way of last opportunity, time was allowed and the date of further Hearing was fixed on 02.06.2023. On 2.6.2023, learned AR stated that he has not received any reply or instructions in the matter. Accordingly, the Appeal was heard and Order was reserved. Even after conclusion of the Hearing till date, there is no submission on behalf of the Revenue as regards the service of SCN within the stipulated time. It is found from the facts and circumstances and the evidence led by the Appellant (owner of goods) that he has discharged the onus under Sec 123 of the Act by leading sufficient documentary evidence like (i) copy of challan, (ii) copy of tax invoice, (iii) copy of stock ledger and (iv) copy of bank statement. The Bank statement further certifies that the payment has been made for the purchase of the gold in question through banking channel. Further the tax invoice reflects that GST has been deposited on the transaction - the Appellant has discharged the onus under Sec 123 of the Act - allegations of Revenue are based on assumptions and presumptions as the evidence led by the Appellants have not been found to be incorrect or false. The whole proceedings are vitiated as the SCN has not been issued and served within six months as required under Sec 124(a) read with Sec 110(2) of the Act. The Revenue are directed to return the seized/confiscated goods forthwith to the Appellant, Mr. Neeraj Aggarwal - the Impugned Orders are set aside - appeal allowed. Issues Involved:1. Confiscation of gold bars and imposition of penalties.2. Legality of the seizure and service of the Show Cause Notice (SCN).3. Burden of proof regarding the licit procurement of gold.4. Admissibility and reliability of the confessional statement.Summary:Issue 1: Confiscation of Gold Bars and Imposition of PenaltiesThe Appeals were filed against the Order of confiscation of 4Kg gold bars valued at Rs.1,19,98,963/- and imposition of penalties under Sec 112(i) on Mr. Neeraj Aggarwal and Mr. Babu Ram. The Department's main allegation was that the appellants did not submit any documents regarding the procurement of the seized gold bars of foreign origin, but it was not alleged that the gold bars were smuggled.Issue 2: Legality of the Seizure and Service of the SCNThe Appellants contended that the SCN was not served within the stipulated period of six months from the date of seizure as required under Sec 124(a) read with Sec 110(2) of the Customs Act. The Tribunal noted that there was no evidence of the SCN being served within the required timeframe, and thus, the whole proceedings were vitiated.Issue 3: Burden of Proof Regarding the Licit Procurement of GoldThe Appellants provided documentary evidence such as challan, invoice, stock ledger, and bank statement to establish the licit possession of the gold. The Tribunal found that the Appellants had discharged the burden of proof under Sec 123 of the Customs Act by leading sufficient documentary evidence, and the Department's allegations were based on assumptions and presumptions.Issue 4: Admissibility and Reliability of the Confessional StatementThe Tribunal observed that the Department's case was built on the confessional statement of Mr. Babu Ram, which was retracted at the first opportunity. The Tribunal held that the confessional statement recorded under duress does not have any evidentiary value unless corroborated by independent evidence. The Tribunal also noted that the purity of the gold was not tested by the Department, which could have established its origin.Conclusion:The Tribunal allowed the Appeals, set aside the Impugned Orders, and directed the Revenue to return the seized/confiscated goods to Mr. Neeraj Aggarwal. If the goods had been auctioned or sold, the Appellant was entitled to the sale proceeds with interest from the date the amount was realized by the Department till the date of disbursement.