TaxTMI 
TaxTMI 
2024 (5) TMI 19
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....en lakh) only on Shri R. K. Swami Singh under Section 112(b)(ii) of the Customs Act 1962. 2. The facts of the case are that on 20.06.2014 at about 08:30 hrs, when the appellant was travelling in a van, he was intercepted by the Officers of Imphal Customs. On examination and personal search of his body, the Officers found in his possession 12 pieces of gold biscuits, totally weighing 2002.26 grams approximately. As the appellant was not having any document for the licit importation of the same, the gold was seized under Section 110(1) of the Customs Act, 1962 under the 'reasonable belief' that the said gold was smuggled into India without payment of Customs Duty. 3. A Statement dated 20.06.2014 was recorded from the appellant wherein he stated that the gold was handed over to him by one Shri Ramaswami at Moreh Bazar on 20.06.2014 at 07:00 hrs, for the purpose of transporting the same from Moreh to Guwahati; he was promised to pay an amount of Rs.12,000/- as carrier charges; he has no documents in possession to prove legal procurement of the gold biscuits. 3.1. The appellant was arrested under Section 104 of the Customs Act, 1962 and produced before the Chief Judicial Magist....
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....ts have no evidentiary value. (i) In the absence of any corroborative evidence to substantiate the allegation that the gold is of smuggled in nature, the statements alone cannot be relied upon to confiscate the said gold. 7.1. In support of his contention that the gold seized from the appellant is not liable for confiscation, he relied upon the following decisions: - i. R.K. Angangbi Singh &ors. v. Commr. of Customs (Preventive), Shillong [Final Order Nos. 76536-76539 of 2023 dated 01.09.2023 in Customs Appeal No. 76086 of 2016 &ors.- CESTAT, Kolkata] ii. Commissioner of Customs, Chennai-III v. Mohammed Ali Jinnah [Final Order No. 40289 of 2023 dated 20.04.2023 in Customs Appeal No. 40099 of 2020 - CESTAT, Chennai] iii. Daleep Kumar Verma &ors. v. Commissioner of Customs (Preventive), Shillong [Final Order No. 75300-75302 of 2023 dated 04.05.2023 in Customs Appeal No. 75315 of 2022 - CESTAT, Kolkata] iv. Commissioner of Customs, Cochin v. Om Prakash Khatri [2019 (366) E.L.T. 402 (Ker.)] 7.2. The appellant also placed reliance on the following decisions in support of the contention that 'reasonable belief' must be substantiated by i....
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....014 which were tested at the Government of India Mint, Alipore, Kolkata. The Assay Certificate has confirmed the purity of the gold as 995.2 mille, 995.1 mille and 995.0 mille which is much closer to the International Standards of pure gold and thus, the Department has a reasonable belief that the gold is of foreign origin and smuggled into India without payment of Customs duty; the appellant could not submit any valid document for legal procurement of the gold. 8.4. Accordingly, the Ld. Authorized Representative for the Revenue supports the impugned order confiscating the gold and imposing penalty on the appellant. 9. Heard both sides and perused the appeal documents. 10. We observe that the appellant was carrying the gold at the time of interception by the Officers on 20.06.2014. The appellant was not having any document in his possession at the time of interception by the officers for the licit purchase of the gold. In his initial statement dated 20.06.2014, the appellant had stated that the said gold was handed over to him by one Shri Ramaswami for transporting the same from Moreh to Guwahati. However, later at the time of personal hearing on 31.07.2015, the appellant ....
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....tion of the officer concerned, for "such power given to the officer concerned is not an arbitrary power and has to be exercised in accordance with their strains imposed by law" and that such belief must be that of an honest and reasonable person based upon reasonable grounds. Further, if the authority would be acting without jurisdiction or there is no existence of any material or conditions leading to the belief, it would be open for the Court to examine the same, though sufficiency of the reasons for the belief cannot be investigated. 12.3. In view of the above, we observe that to form a 'reasonable belief' that the goods are smuggled into India, there must be irrefutable evidence to prove that allegation. In the present case there is no such evidence available to prove that the goods were of foreign origin and smuggled into India. In this case we find that the gold was seized at the outskirts of Imphal which is far away from Indo-Myanmar border. Thus, there must be some other corroborative evidence available to have the reasonable belief that the gold is of smuggled in nature. 12.4. We find that the Hon'ble Delhi High Court in the case of Shanti Lal Mehta v. Union of India....
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....tification in the Official Gazette specify." 56. In Babulal Amthalal Mehta v. Collector of Customs, AIR 1957 S.C. 877, while considering the provisions of Section 178A of the Sea Customs Act, 1878, it was observed; "Though the word `smuggling' is not defined in the Act, it must be understood as having the ordinary dictionary meaning, namely, carrying of goods clandestinely into a country." Where Section 123 cannot be invoked it would be for the customs authorities to prove that the goods were imported after the restrictions against import were imposed. (Amba Lal v. Union of India, AIR 1961 S.C. 264 = 1983 E.L.T. 1321). In Pukhraj v. D.R. Kohli, AIR 1962 S.C. 1559 = 1983 E.L.T. 1360, the Supreme Court said that when the court was dealing with the question as to whether the belief in the mind of the officer who effected a seizure, was reasonable or not, the court was not sitting in appeal over the decision of the said officer. All that it could consider was whether there was any ground which prima facie justified a reasonable belief. That the officer had reasonable belief must be stated in the notice to show cause. It must be adjudicated upon by the authori....
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....bly believe that the goods were smuggled would certainly import a rational connection between the facts on which the presumption is raised and the fact to be proved, so that whatever other constitutional infirmity might attach to the impugned provision, the lack of rational connection is not one of them." It would be necessary, therefore, before any person could be called upon to prove that the goods seized from him were not smuggled goods, that the customs officer making the seizure must proceed upon the foundation of a reasonable belief inspired in him by some definite material by way of some definite information or otherwise so that he could be said to have seized the goods in a reasonable belief that they were smuggled goods. (Bapalal v. Collector of Central Excise, AIR 1965 Gujarat 135). The question is whether the record before me shows that there was a reasonable belief in the mind of the seizing officer that the goods were smuggled goods. It does not appear to me that he had entertained any reasonable belief at the time of seizure. Neither the board on appeal, nor the Central Government applied their mind to this question. Two reasons : 57. Applyi....
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....ther the diamonds nor the ornaments had any foreign markings or label to suggest to the customs that these were smuggled goods. In the search list these two packets of diamonds are described as "appearing to be diamonds". This shows that the customs officer did not believe them to be diamonds on any reasonable ground. The ornaments had no foreign label or making. They were ordinary ornaments as are worn in this country. There was nothing peculiar about them. Nothing extraordinary. On this material could any reasonable man entertain a belief that these were smuggled goods? 59. The belief must be such as any reasonable man in the circumstances of the case would entertain about the existence or non-existence of a thing. Simply because the goods were not accounted for at that time does not necessarily mean that the goods were smuggled goods. Unaccounted goods may be stolen goods. Reasonable belief could be entertained either on the basis of some external indicia or on the basis of some internal information that the goods had been illegally imported into India from Nepal or some other foreign country either without payment of duty or in contravention of any restriction or prohi....
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....ble belief. It was a case of suspicion. A case of speculation. A case of guess work. 63. As a result Section 123 did not apply to the case. There was no reasonable belief. No presumption could be raised under Section 123. There was no obligation on the petitioner to prove that the goods were not smuggled. The burden of proof was wrongly cast on him. The entire inquiry was vitiated." 12.5. From the decisions cited above, we observe that the 'reasonable belief' on which the officers presumed that the gold bars/pieces were of smuggled nature is not supported by any corroborative evidence. There is no document available on record to establish that gold bars/pieces were smuggled into India without payment of customs duty. The impugned order has concluded that the said gold bars/pieces were smuggled into India only on the basis of assumptions and presumptions without any concrete evidence to substantiate this claim. Hence, we hold that material evidence available on record does not establish the 'reasonable belief' that the gold bars/pieces were smuggled into India without any valid documents. 12.6. Regarding applicability of the provisions of Section 123 of Customs Act 19....
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....ppeal of Revenue holding that the jewellery does not bear any foreign marking on it and there is no other evidence other than the statement of passenger produced by Revenue to substantiate the claim that jewellery were smuggled into India. The relevant part of the said decision is reproduced below: - "7. Ld. Advocate appearing for the respondent justified the impugned order. He drew my attention to the findings of the Commissioner (Appeals) in paras 11 and 12 in which he has observed that the goods seized from the passenger did not bear any foreign marking and that the jewellery was only of 18 carat purity. He also drew my attention to para 16 in which the Commissioner (Appeals) has recorded that other than the statement of the appellant, there is no other evidence to establish that the seized goods were smuggled and that the appellant has brought the goods from Dubai. Accordingly, he submitted that the goods are not liable for confiscation. He also reiterated the stand of the respondent that the said goods were handed over to the passenger at the Delhi Railway Station for handing over to a friend at Mumbai. The purchase bills for the jewellery within India was also submit....
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.... On the contrary, I find that the pax had contested the same by submitting that the said gold jewellery was handed over to him at outside IGI Airport, New Delhi to be carried to Mumbai. The appellant has also submitted the copies of the invoices/bills against which the above jewellery was purchased from within India to substantiate his case. Hence, a plausible contention has been made out by the Appellant. However, the issue is whether the seized gold jewellery could be proved that they were actually brought by the pax as disclosed, which I am of the considered view that the same is not proved". 10. It is seen that there is no foreign marking on the jewellery. Revenue has not placed any proof to substantiate that the jewellery was smuggled into India other than the statement of the passenger. In the facts and circumstances of the case, I find no reason to interfere with the findings of the impugned order which is sustained for the reason mentioned therein. In the result, Revenue appeal is rejected." 12.10. In view of the above discussion and relying upon the decision cited above, we hold that the gold bars/pieces cannot be confiscated based on the retracted statements w....