TaxTMI 
TaxTMI 
2026 (5) TMI 1185
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.....2018, Officers of the Divisional Preventive Unit (DPU), Barasat Customs Division searched the workshop premises of M/s. Tarak Nath Metling House located at the 2nd Floor of the premises at 5/1, Ram Kumar Chandra Lane, Kolkata - 700 007. During the course of search operations, inter alia, two persons available therein by the name of Shri Rajendra Roy [hereinafter referred to as the "appellant no. 1"] and Shri Avijit Bhandari [hereinafter referred to as the "appellant no. 2"], from whose possession 06 (six) pieces of gold totally weighing 699.810 gms. and cash of Indian currency valuing Rs.70,00,000/- (Rupees Seventy Lakh only) were recovered. It was informed by Shri Avijit Bhandari / appellant no. 2 that the amount of Rs.70,00,000/- found in his bag had been received from Shri Rajendra Roy / appellant no. 1. No licit document could be produced by either the appellant no. 1 or the appellant no. 2 in support of lawful acquisition and possession of the said gold, which is a specified item under Section 123 of the Customs Act, 1962. The said goods were thus seized under Section 110 of Customs Act, 1962 in Seizure Case No. 01/IMP/CL/GOLD/CUS/ BCD/DPU/2018-19 dated 25.06.2018 by the Offi....
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....,121/- along with the seized Indian currency of Rs.70,00,000/- were ordered to be absolutely confiscated in terms of Sections 111(b), 111(d) and 121 of the Customs Act, 1962. The ld. adjudicating authority also inter alia imposed penalties of Rs.2,00,000/- (Rupees Two Lakhs only) and Rs.2,50,000/- (Rupees Two Lakhs Fifty Thousand only) on Shri Rajendra Roy (appellant no. 1 herein) and Shri Avijit Bhandari (appellant no. 2 herein) respectively. 7.1. The appellants, along with other co-noticees, preferred appeals against the above adjudication order before the Ld. Commissioner of Customs (Appeals), Custom House, Kolkata, which were considered together by the ld. appellate authority and vide the impugned order dated 07.10.2021, the appeals of the present two appellants were rejected while the appeals of other two appellants were allowed by setting-aside the penalty respectively imposed upon them. 7.2. Aggrieved by the above order, the appellants have filed the instant appeals. 8. During the course of hearing, the Ld. Counsel appearing on behalf of the appellants has inter alia contended as follows: - (i) It is submitted that the seized six pieces of gold were having ....
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....ajendra Roy, had visited Kolkata from Burdwan as per direction of his employer Shri Shyamal Chatterjee for receiving the seized goods. Such allegations were based upon the alleged statements of the apprehended appellants. Now, as per impugned Order-in-Appeal neither Shri Anindya Mallick nor Shri Shyamal Chatterjee are anyway involved in the present case. Revenue has not challenged any part of such impugned Order-inAppeal. As such, the findings thereof w.r.t. Shri Anindya Mallick nor Shri Shyamal Chatterjee have reached its finality. Hence, no part of such statements of the apprehended appellants can be relied upon to arrive at any adverse conclusion against the appellants herein. (v) That it is submitted that for imposition of any penalty under Section 112 of Customs Act, 1962, the burden is on Revenue to satisfy the pre-requisite conditions thereat. Clause (a) and Clause (b) of Section 112 are disjunctive in nature by the word 'or' which denotes that single penalty under both the clauses cannot be imposed. For invocation of Clause (a) ibid it is incumbent upon the Revenue to substantiate that the person concerned has done nor omitted to do or abated any act of com....
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.... of absolute confiscation of the gold and Indian currency in question as well as the order of imposition of penalty on the appellants under Section 112(a) and (b) of the Customs Act, 1962. 10. Heard both sides and perused the records of the case. 11. The facts are not in dispute that six (06) numbers of Ten Tola gold biscuits, collectively weighing 699.810 grams, having purity of 99.8%, and valued at Rs. 22,05,101/-, were found and recovered from the possession of the appellants herein, namely, Shri Avijit Bhandari and Shri Rajendra Roy in the workshop premises of M/s. Tarak Nath Melting House on 25.06.2018 by the Officers of the Customs Preventive Unit, Barasat. It is also not in dispute that at the time of interception and subsequent investigation, the appellants failed to produce any documentary evidence to establish the licit acquisition or lawful possession of the said gold. 11.1. At this juncture, it is relevant to refer to the provisions of Section 123 of the Customs Act, 1962, which specifically provides that in the case of notified goods, including gold, the burden of proving that such goods are not smuggled shall lie upon the person from whose possession the same....
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....established. Similarly, in Balumal Jamnadas Batra v. State of Maharashtra [1983 (13) E.L.T. 1558 (S.C.)] it has been held that the benefit of doubt cannot be granted in the absence of any satisfactory explanation and the goods were held liable for confiscation. Further, various decisions of this Tribunal have consistently held that where the person in possession fails to discharge the burden under Section 123, the seized gold is liable for confiscation. The ratio of these decisions clearly supports the view that absence of documentary evidence coupled with the nature of the goods is sufficient to uphold confiscation. 12. In view of the above, it is found that the appellants have failed to establish the licit source of acquisition of the gold in question. Since gold is a notified item under Section 123 of the Act, the statutory presumption that the same is smuggled remains unrebutted. Consequently, the impugned gold is liable for confiscation under the relevant provisions of the Customs Act, 1962. 13. Coming to the question of redemption, the appellants have prayed for release of the gold on payment of redemption fine. However, we do not find any merit in the said request. The....
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....ale proceeds of smuggled goods. The allegation of the Revenue requires to be supported by cogent material indicating a clear nexus between the seized currency and the alleged smuggling activity. In the present case, it is seen from the record that no investigation appears to have been conducted to trace the source of the currency, nor has any attempt been made to establish a linkage between the seized gold and the alleged generation of sale proceeds in the form of the impugned currency. There is no iota of evidence on record so as to arrive at the conclusion that the seized amount represents proceeds of smuggled gold. Further, the formation of a "reasonable belief", which is a sine qua non for seizure and confiscation under the provisions of the Customs Act, is not discernible from the records insofar as the Indian currency is concerned. Mere suspicion, howsoever strong, cannot take the place of proof. 14.3. On a perusal of the impugned order, it is observed that no corroborative evidence has been adduced to justify the absolute confiscation of the seized Indian currency. In the absence of any such supporting material, the finding of the lower authority that the currency represe....
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....d: (i) there must be a sale. . (ii) the sale must be of smuggled goods. (iii) the sale must be by a person having knowledge or reason to believe that the goods were of smuggled origin. (iv) the seller and purchaser and the quantity of gold must be established by the Customs authorities. 6. In this case, however, none of the requisites of Section 121 have been fulfilled - no sale has been established, identity of the buyer and seller has not been established. As a consequence, the currency cannot be considered to represent the sale proceeds of the contraband goods and, therefore, no violation of Section 121 has been made out. Since the charge under Section 121 of the Customs Act has not been proved against the appellant the currency notes cannot be retained by the Department and have to be returned to the appellant. Imposition of penalty is also not legal and proper in the absence of proof of violation of any provisions of the Customs Act." 15. In view of the above and by applying the ratio of the case-law cited supra, it is our considered view that the absolute confiscation of Indian currency amounting to Rs. 70,00,000/- is not legall....