2023 (11) TMI 423 - AT - Customs

Revenue fails to prove gold smuggling despite foreign origin markings and Swastika symbols

CESTAT Kolkata dismissed revenue appeals in gold seizure cases. The Tribunal held that customs authorities failed to establish reasonable belief that ... Confiscation - town Seizure - Gold of foreign origin having inscription of 2(two) Swastika symbol - failure to prove reasonable belief that being the gold in question is smuggled one - HELD THAT:- To decide the issue this Tribunal in the case of SHRI BALWANT RAJ SONI VERSUS COMMISSIONER OF CUSTOMS (PREVENTIVE) , PATNA, SHRI ANURAG JALAN VERSUS COMMISSIONER OF CUSTOMS (PREVENTIVE) , PATNA AND SHRI MANOJ KUMAR SETH VERSUS COMMISSIONER OF CUSTOMS (PREVENTIVE) , PATNA [2023 (5) TMI 940 - CESTAT KOLKATA] has examined the issue and observed the ‘reasonable belief’ on which the DRI officers presumed that the gold bars/pieces were of smuggled nature is not supported by any corroborative evidence. There is no document available on record to establish that gold bars/pieces were smuggled into India from Bangladesh. The impugned order has concluded that the said gold bars/pieces were smuggled into India only on the basis of assumptions and presumptions without any concrete evidence to substantiate this claim. Hence, we hold that material evidence available on record does not establish that the gold bars/pieces were smuggled into India without any valid documents. It is apparent from the records itself that it is a case of town seizure. The purity of gold is 99.5% and having no embossing of foreign mark, in that circumstances, revenue has failed to prove reasonable belief that being the gold in question is smuggled one. In the absence of that the impugned gold cannot be seized under Section 110 of the Customs Act, 1962 and therefore the gold in question is not liable for confiscation and no penalty is imposable on the appellant. There are no infirmity in the impugned order - the appeals filed by the revenue are dismissed. Issues Involved:1. Confiscation of gold.2. Penalty imposition.3. Validity of the respondent's claim and documents.4. Admissibility of retracted statements.5. Compliance with National Litigation Policy.Summary:Issue 1: Confiscation of GoldThe Revenue appealed against the exoneration of the appellants by the Commissioner (Appeals), who held that the gold was not liable for confiscation. The gold in question, a 1 kg gold bar valued at Rs. 30,50,000/-, was seized based on specific information. The gold was examined and confirmed to be 24 Karat gold. The respondent claimed the gold was procured by melting smaller pieces, supported by purchase invoices. The adjudicating authority had initially confiscated the gold, but the Commissioner (Appeals) set aside this order.Issue 2: Penalty ImpositionPenalties were imposed on the respondents by the adjudicating authority but were set aside by the Commissioner (Appeals). The Revenue's appeal against this decision was based on the claim that the documents provided by the respondents were manipulated to justify the gold's legality.Issue 3: Validity of Respondent's Claim and DocumentsThe Revenue argued that there were discrepancies in the documents submitted by the respondents, including manipulated stock registers and issue vouchers. The respondents countered that the documents were genuine and any errors were minor and internal. The Commissioner (Appeals) found the respondents' documents credible and dismissed the charges.Issue 4: Admissibility of Retracted StatementsThe Revenue contended that the retracted statements of the respondents should be considered valid evidence. The respondents argued that the statements were made under duress and retracted promptly. The Commissioner (Appeals) agreed with the respondents, finding no corroborative evidence to support the initial statements.Issue 5: Compliance with National Litigation PolicyThe respondents argued that the appeal by the Revenue was not maintainable under the National Litigation Policy, which sets monetary thresholds for appeals. The penalties in question were below the threshold, making the appeal non-maintainable. The Commissioner (Appeals) upheld this view, emphasizing that the policy aims to reduce unnecessary litigation.Conclusion:The Tribunal upheld the Commissioner (Appeals)'s order, stating that the Revenue failed to prove that the gold was smuggled. The Tribunal noted that the gold's purity and lack of foreign markings did not support the Revenue's claim of smuggling. Consequently, the gold was not liable for confiscation, and no penalties were imposable. The appeal by the Revenue was dismissed.