1992 (2) TMI 200 - AT - Customs

Tribunal Upholds Gold Confiscation & Penalty. Valid Show Cause Notice. Burden of Proof Not Discharged. Legal Precedents Rejected.

UDAI LAL DOSHI Versus COLLECTOR OF CUSTOMS AND CENTRAL EXCISE

The tribunal upheld the confiscation of seized gold under Section 111 of the Customs Act, 1962, and imposed a penalty of Rs. 5,000/- under Section 112. ... Smuggling - Foreign marked gold biscuits recovered from appellant’s premises Issues Involved:1. Confiscation of seized gold under Section 111 of the Customs Act, 1962.2. Imposition of penalty under Section 112 of the Customs Act, 1962.3. Validity of the show cause notice issued under Section 110(2) read with Section 124 of the Customs Act.4. Burden of proof under Section 123 of the Customs Act.5. Applicability of precedents and legal principles.Issue-wise Detailed Analysis:1. Confiscation of Seized Gold under Section 111 of the Customs Act, 1962:The Collector of Customs and Central Excise, Jaipur, ordered the confiscation of 10 pieces of gold biscuits weighing 1166.400 grams with foreign markings. The gold was seized based on a reasonable belief that it was illegally imported into India, contravening Section 7(c) of the Customs Act, 1962, read with Section 3(1) of the Imports and Exports (Control) Act, 1947, and Section 13 of the FERA, 1973. The appellant admitted the recovery of the gold biscuits from his residential premises during a search by Income Tax authorities. The Collector concluded that the seized gold was liable for confiscation as it was in contravention of the Customs Act, 1962.2. Imposition of Penalty under Section 112 of the Customs Act, 1962:A penalty of Rs. 5,000/- was imposed on the appellant under Section 112 of the Customs Act, 1962. The appellant contended that he was not in conscious possession of the gold and that it had been inherited from his deceased mother. However, the Collector found this plea difficult to believe, noting that the appellant had not verified the contents of the box for ten years after his mother's death. The Collector held that the appellant had contravened the provisions of Section 11 of the Customs Act, 1962, and imposed the penalty accordingly.3. Validity of the Show Cause Notice Issued under Section 110(2) Read with Section 124 of the Customs Act:The appellant argued that the show cause notice was time-barred as it was issued more than six months after the seizure of the gold by the Income Tax authorities. However, the Collector and the tribunal held that the date of seizure for the purpose of the Customs Act was 30-7-1986, when the gold was handed over to the Customs authorities and a proper panchnama was drawn. Therefore, the show cause notice issued on 30-10-1986 was within the six-month period and valid under Section 110(2) read with Section 124 of the Customs Act.4. Burden of Proof under Section 123 of the Customs Act:The appellant contended that the gold was inherited and not smuggled, but failed to provide any documentary evidence to support this claim. Under Section 123 of the Customs Act, the burden of proving that the seized goods were not smuggled lies on the person from whose possession the goods were seized. The tribunal noted that the appellant did not produce any evidence to discharge this burden, such as vouchers or bills of purchase. Consequently, the tribunal upheld the Collector's finding that the appellant had not discharged the burden of proof under Section 123 of the Customs Act.5. Applicability of Precedents and Legal Principles:The appellant relied on the ruling in Abaji Nana Patil v. Gold Control Administrator, arguing that inherited property cannot be brought within the ambit of acquisition and possession under the Customs Act. However, the tribunal distinguished the facts of the present case from those in Abaji Nana Patil, noting that the appellant was aware of the box containing the gold and had admitted its possession. The tribunal also referred to the ruling in Collector of Customs, Madras & Others v. D. Bhoormull, which discussed the burden of proof in cases of smuggling. The tribunal concluded that the appellant had not provided sufficient evidence to rebut the presumption of smuggling and upheld the confiscation and penalty imposed by the Collector.Conclusion:The tribunal rejected the appellant's appeal, upholding the confiscation of the seized gold under Section 111 of the Customs Act, 1962, and the imposition of a penalty of Rs. 5,000/- under Section 112 of the Customs Act, 1962. The tribunal found that the show cause notice was validly issued within the stipulated time, and the appellant had failed to discharge the burden of proof under Section 123 of the Customs Act. The tribunal also dismissed the appellant's reliance on precedents, distinguishing the facts of the present case from those in the cited rulings. The appeal under the Gold (Control) Act was also rejected as infructuous.