Gold confiscation overturned after appellants prove legitimate purchase with proper documentation and banking records under Section 123

CESTAT Hyderabad allowed appeals in gold confiscation case, setting aside impugned orders. Revenue's statement recorded during panchanama proceedings deemed not freely given due to coercive circumstances. Appellants successfully discharged burden under Section 123 by providing independent external evidence including GST-registered seller's invoice, bank statements showing payment through banking channels, and corroborative testimony. Transaction's genuineness established through proper documentation and banking records. Gold ordered to be returned to appellants or sale proceeds with interest if already disposed. All penalties set aside.

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Issues Involved:
1. Confiscation of Gold Bars: Whether the gold bars seized from the appellants were of foreign origin and liable to confiscation under the Customs Act.
2. Validity of Statements: Whether the statements made by the appellants during the investigation were voluntary and reliable.
3. Burden of Proof under Sec 123: Whether the appellants have discharged the burden of proof under Sec 123 of the Customs Act regarding the lawful acquisition of the gold.

Summary of Judgment:

1. Confiscation of Gold Bars:
The appellants challenged the order of absolute confiscation of 14 gold bars and two small pieces of gold weighing 3304.56gms, which were seized by the Revenue on the grounds of being remelted gold of foreign origin. The gold was seized from Mr. A. Praveen Kumar during his travel from Coimbatore to Narsaraopeta. The Revenue treated the gold as smuggled due to the absence of standard size, weight, and markings indicating the country of origin.

2. Validity of Statements:
The appellants argued that the statements made by Mr. A. Praveen Kumar on 10.03.2020 and Mr. V.B. Vimal on 12.03.2020 were not voluntary. Mr. A. Praveen Kumar retracted his statement at the first opportunity, claiming it was made under duress due to the threat of arrest and harassment of his wife and sister. The Tribunal found that the statement recorded during the panchanama proceedings was not freely given and noted the contradictions in Mr. V.B. Vimal's statements, which were deemed unreliable.

3. Burden of Proof under Sec 123:
The appellants provided evidence of the purchase of the gold from M/s Aryan Gold, Bangalore, including a GST invoice and proof of payment through banking channels. The Tribunal found that the appellants had discharged the onus under Sec 123 of the Customs Act by providing legitimate documentation and payment evidence, establishing the genuineness of the transaction.

Conclusion:
The Tribunal allowed the appeals, setting aside the impugned orders of confiscation and penalties. The appellants were entitled to receive back the seized gold or the sale proceeds with interest if the gold had been disposed of by the department. The Tribunal emphasized the lack of credible evidence from the Revenue to substantiate the claim of the gold being of foreign origin and smuggled.

Appeals allowed.

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