Gold bars worth 10 kg absolutely confiscated under Sections 111(b) and 111(d) for illegal import from Nepal

CESTAT New Delhi upheld absolute confiscation of 10 kg gold bars under Sections 111(b) and 111(d) of Customs Act, 1962, and penalty under Section 112. Appellant's confession established gold's foreign origin from Nepal, received in melted form to hide identity. Appellant failed to discharge burden of proving legal procurement per RBI guidelines. Large quantity concealment and lack of valid documents justified confiscation. Gold treated as prohibited goods under restricted category. Penalty against appellant upheld. Revenue's appeal allowed for remand regarding Section 114AA penalty consideration by adjudicating authority.

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Issues Involved:
1. Confiscation of gold under Section 111(b) and Section 111(d) of the Customs Act, 1962.
2. Imposition of penalties under Section 112(b)(i), Section 112(b), and Section 114AA of the Customs Act, 1962.
3. Determination of whether the seized gold was of foreign origin and smuggled.
4. Burden of proof regarding the legal procurement of gold.
5. Admissibility of statements recorded under Section 108 of the Customs Act, 1962.
6. Provisional release of confiscated goods.
7. Absolute confiscation under Section 111 of the Customs Act, 1962.

Summary:

Confiscation of Gold:
Separate appeals were filed by Suresh Bhonsle and Mohammed Wajid against the confiscation order under Section 111(b) and Section 111(d) of the Customs Act, 1962, and penalties under Section 112(b)(i) and Section 112(b). The Revenue also appealed against the non-imposition of penalty under Section 114AA on Suresh Bhonsle. The Directorate of Revenue Intelligence (DRI) apprehended three individuals with smuggled gold in Delhi. The gold was concealed on their bodies, and they failed to produce any legal documents for possession.

Imposition of Penalties:
Penalties were imposed as follows: Rs. 75,00,000 on Suresh Bhonsle, Rs. 20,00,000 each on Imran Mullick and Amjad Khan, Rs. 5,00,000 on Mohd. Wajid, and Rs. 2,00,000 on Mohd. Abid. The Tribunal upheld these penalties, emphasizing that the appellants were involved in the illegal trade of gold and failed to provide any legal documents for the procurement of the gold.

Foreign Origin and Smuggling of Gold:
The appellants challenged the claim that the gold was of foreign origin. However, the Tribunal noted that Suresh Bhonsle admitted in his statement that the gold was received from Nepal in melted form to hide its foreign origin. The Tribunal held that the statements recorded under Section 108 are binding and corroborated by other evidence, establishing the smuggled nature of the gold.

Burden of Proof:
The appellants argued that the burden of proof shifted to the department since the gold was delivered under proper challan. The Tribunal rejected this, stating that the challans had no sanctity as the appellants failed to show the source of procurement. The burden of proof remained on the appellants under Section 123 of the Act, which they failed to discharge.

Admissibility of Statements:
The Tribunal held that the statements recorded under Section 108 are admissible and binding. The appellant's retraction of his statement after a significant delay was deemed an afterthought and rejected.

Provisional Release of Confiscated Goods:
The Tribunal affirmed the absolute confiscation of the gold, citing the appellant's past involvement in illegal gold transactions and the lack of legal documents for the gold. Provisional release was not granted, as the gold was smuggled and prohibited.

Absolute Confiscation:
The Tribunal upheld the confiscation under Section 111(b) and 111(d) of the Act, noting the appellant's failure to provide any licit documents for the gold. The Tribunal referenced various legal precedents to support the absolute confiscation of smuggled goods.

Remand for Penalty under Section 114AA:
The Tribunal remanded the matter to the adjudicating authority to consider the imposition of penalty under Section 114AA, as there was no discussion on this issue in the impugned order.

Conclusion:
The appeals by Suresh Bhonsle and Mohammed Wajid were dismissed, and the appeal by the Revenue was allowed by way of remand for reconsideration of the penalty under Section 114AA. The Tribunal emphasized the need for strict adherence to legal provisions and the importance of credible evidence in cases involving smuggling and illegal trade.

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