Gold with foreign markings confiscated under Section 111(d) for violating DGFT and RBI import conditions

The CESTAT New Delhi upheld the absolute confiscation of seized gold with foreign markings under Section 111(d) of the Customs Act, 1962, ruling it constituted prohibited goods due to violation of DGFT and RBI import conditions. The appellant failed to provide valid purchase documents and discharge customs duty liability, rendering the gold smuggled goods. The tribunal rejected natural justice violation claims, noting the appellant admitted his statement under Section 108 and never requested cross-examination during his lifetime. The penalty under Section 112(b) was confirmed, and the appeal was dismissed.

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Issues Involved:
1. Confiscation of seized gold and penalty under Section 112(b) of the Customs Act, 1962.
2. Whether the seized gold was a prohibited item.
3. Opportunity to present the case and cross-examine witnesses.
4. Testing method for the seized gold.
5. Application of Section 110A and Section 125 of the Customs Act regarding provisional release and absolute confiscation.

Summary:

1. Confiscation of Seized Gold and Penalty under Section 112(b):
The appellant challenged the Order-in-Appeal affirming the absolute confiscation of seized foreign-marked gold and the imposition of a penalty under Section 112(b) of the Customs Act, 1962. The seized gold, weighing 1199.550 grams and valued at Rs. 30,90,109/-, was recovered from a smelter's premises without any documents evidencing licit possession, leading to its confiscation under Section 110 of the Customs Act.

2. Whether the Seized Gold was a Prohibited Item:
The appellant argued that the seized gold was not a prohibited item and should not be absolutely confiscated. However, the Tribunal referred to various judgments and statutory definitions, concluding that the seized gold falls under the definition of "prohibited goods" as per Section 2(33) of the Customs Act. The importation of gold is highly regulated, and the appellant failed to prove that the seized gold was validly imported, thus making it liable for confiscation under Section 111 of the Act.

3. Opportunity to Present the Case and Cross-Examine Witnesses:
The appellant contended that he was denied a proper opportunity to present his case and cross-examine witnesses. The Tribunal found no merit in this argument, noting that the appellant did not appear before the Investigating Agency despite repeated summons and admitted his statement recorded under Section 108 of the Customs Act. The statement, being un-retracted, was admissible in evidence, and no further corroboration was required.

4. Testing Method for the Seized Gold:
The appellant requested retesting of the seized gold using the Melting Purity Method, arguing that the initial testing by the Touch Stone Method was inadequate. The Tribunal rejected this plea, stating that the gold was tested by a Certified Jewellery Appraiser in the presence of independent witnesses, and no definite tests are prescribed under law. The marking on the gold biscuits and the statements recorded under Section 108 of the Act further supported the findings.

5. Application of Section 110A and Section 125 Regarding Provisional Release and Absolute Confiscation:
The appellant argued against absolute confiscation and sought provisional release of the seized gold. The Tribunal, referring to various judgments, held that the adjudicating authority has the discretion to decide on absolute confiscation based on the facts and circumstances of each case. The appellant's failure to produce valid documents for the seized gold justified the absolute confiscation and penalty under Section 112(b) of the Act.

Conclusion:
The Tribunal upheld the findings of the authorities below, affirming the confiscation of the seized gold under Section 111(d) and the penalty under Section 112(b) of the Customs Act. The appeal was dismissed.

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