2023 (9) TMI 728 - AT - Customs

Dispute over Confiscation of Gold Bars: Proof of Ownership at Stake

Subham Verma, Golu Verma, Rajendra Kumar Dhuriya, Shri Sourabh, Shri Rinku Verma, Pradeep Kumar Bothra Versus Commissioner of Customs (Port), Kolkata

The case involved the confiscation of 6 kg of gold bars at Howrah Railway Station, suspected to be of foreign origin. The adjudicating authority ordered ... Confiscation - Smuggling - foreign marked Gold Bars - evaluation of evidence tendered by the appellants towards discharge of their obligation and onus cast upon them under Section 123 of the Customs Act, 1962 - difference of opinion. HELD THAT:- In view of the the difference in the view points of two members, constituting the Bench who heard the matter, the Registrar is directed to refer the matter to the President for his kind consideration and referring the matter to a third member for the resolution of the conflict and the difference of opinion. The points of difference are as under: (a) Whether the appellants have discharged their burden under Section 123 of the Customs Act, 1962 in the facts and circumstances of the case, consequently, the goods are not liable for confiscation, as held by Member (Judicial); or (b) Whether the appellant have failed to discharge their burden under Section 123 of Customs Act, 1962 and hence, the goods are liable for confiscation in the facts and circumstances of the case as held by Member (Technical). Issues Involved:1. Confiscation of 6 kg gold and imposition of penalties.2. Validity of the appellants' claim of ownership and licit procurement of the gold.3. Assessment of the appellants' burden of proof under Section 123 of the Customs Act, 1962.Summary:Issue 1: Confiscation of 6 kg gold and imposition of penalties.The appellants were intercepted at Howrah Railway Station on 19.05.2015, and 6 kg of gold bars believed to be of foreign origin were recovered. The gold was seized on the belief that it had been smuggled into India. The adjudicating authority ordered absolute confiscation of the gold under Section 111(b) and 111(d) of the Customs Act, 1962, and imposed penalties on all appellants under Sections 112(b) and 114AA of the Customs Act, 1962.Issue 2: Validity of the appellants' claim of ownership and licit procurement of the gold.The appellants claimed that the gold was purchased by Appellant No. 5 from Appellant No. 6 through proper invoices and banking channels. The adjudicating authority did not find the documents provided by the appellants sufficient to establish the licit procurement of the gold. The appellants' initial statements indicated the gold was obtained from Shri Sashikant Patil, but later statements claimed it was from Appellant No. 5, which the adjudicating authority found contradictory and insufficient to establish legal ownership.Issue 3: Assessment of the appellants' burden of proof under Section 123 of the Customs Act, 1962.The Tribunal found that the appellants had discharged their burden under Section 123 of the Customs Act, 1962, by providing purchase invoices and bank statements confirming the sale from Appellant No. 6 to Appellant No. 5. The Tribunal referenced several case laws where similar evidence was accepted to discharge the burden of proof. However, the Member (Technical) disagreed, stating that the appellants failed to provide timely and credible evidence of licit procurement and that the documents submitted were part of a cover-up operation. The Member (Technical) upheld the adjudicating authority's order for confiscation and penalties.Conclusion:The matter was referred to the President of CESTAT for resolution due to the difference in opinions between the Member (Judicial) and Member (Technical) on whether the appellants had discharged their burden under Section 123 of the Customs Act, 1962, and whether the gold was liable for confiscation.