2010 (4) TMI 325 - AT - Customs

Tribunal upholds gold confiscation, rejects challenge on foreign origin. Burden of proof not met.

ZAKI ISHRATI Versus COMMISSIONER OF CENTRAL EXCISE, KANPUR

The Tribunal upheld the Commissioner (Appeals)'s decision to confiscate gold biscuits seized from a residential premises, rejecting the appellant's ... Confiscation- Department during the seizure find smuggled gold. the original authority confiscated the gold absolutely and he also imposed a penalty of Rs. 50,000/- on Shri Faiyaz Ahmed and a penalty of Rs. 50,000/- on Shri Sayed Zaki Ishrati. On appeal by Shri Zaki lshrati, Managing Director of M/s. Zarafahan Chemical (P) Ltd., Commissioner (Appeals) by impugned order upheld the order of the original authority. Held that- the Commissioner (Appeals) in upholding the confiscation of the gold treating them as foreign mark gold and holding that the appellant has failed to prove the licit nature does not call for any interference. The appeal is, therefore, rejected. Issues:- Appeal against the order of the Commissioner (Appeals) dated 3-6-05- Seizure of gold biscuits from residential premises- Valuation and testing of gold- Statements of individuals involved- Confiscation of gold and imposition of penalties- Challenge to finding of gold being of foreign origin- Reliance on various evidence and legal precedents- Validity of statements and retractions- Burden of proof on the appellant- Decision of the Commissioner (Appeals) upheldAnalysis:1. Seizure of Gold Biscuits: The case involved the seizure of gold biscuits from the residential premises of the Managing Director of a company. The gold was found in various locations, including a drawer and the lawn, leading to suspicion of smuggling.2. Valuation and Testing of Gold: An Assayer valued the seized gold, and the total value was determined. The purity and weight of the gold were crucial in assessing its value and origin.3. Statements of Individuals: Statements of the Manager and Managing Director were taken, admitting to the smuggled nature of the gold. However, retractions and denials were later made, raising questions about the validity and reliability of these statements.4. Confiscation and Penalties: The original authority confiscated the gold and imposed penalties on the individuals involved. The Commissioner (Appeals) upheld this decision, leading to the appeal before the Tribunal.5. Challenge to Finding of Foreign Origin: The appellant challenged the finding that the gold was of foreign origin. Various evidence and legal precedents were presented to contest this conclusion, including the unreliability of foreign markings as proof of foreign origin.6. Validity of Statements and Retractions: The validity of statements and retractions made by the individuals involved was a key point of contention. The Tribunal analyzed the circumstances under which these statements were made and retracted, considering factors like signatures and delivery to investigating officers.7. Burden of Proof: The burden of proof that the gold was licitly procured rested on the appellant. Despite attempts to provide evidence of purchase, inconsistencies in statements and ownership claims weakened the appellant's case.8. Decision of the Tribunal: After considering all submissions and evidence, the Tribunal rejected the appeal, upholding the Commissioner (Appeals)'s decision to confiscate the gold and impose penalties based on the failure to prove the licit nature of the gold.This detailed analysis of the judgment highlights the complexities of the case, including the seizure, valuation, statements, challenges to findings, and the burden of proof, ultimately leading to the rejection of the appeal by the Tribunal.