TaxTMI 
TaxTMI 
2026 (7) TMI 470
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....19, at a routine police naka at Mawryngkneng, Meghalaya, the Appellant, accompanied by one Shri K. Sanjit Singh, was intercepted by the Police while travelling in a Mahindra Scorpio from Imphal towards Guwahati. On search, twelve gold bars weighing 1992.500 grams were recovered concealed in the Appellant's clothing. FIR No. 28/2019 was registered under Sections 120B and 379 IPC, and the gold was taken into police custody. The Appellant's elder brother, Shri Okram Ibohal Singh, filed an application claiming family ownership of the gold and produced a purchase receipt dated 04.07.1992 issued by M/s S.K. Johari & Jewellers, Chandni Chowk, Delhi. The application was declined by the learned JMFC, Shillong on 22.11.2019 pending verification, and not upon any finding of smuggling. On the prayer of the Investigating Officer that the matter concerned smuggling and fell outside police jurisdiction, the case was ordered to be transferred to the Customs Department on 07.09.2020. The Customs Department formally took custody of the gold and drew a Panchnama on 05.11.2020. The Appellant and several family members were thereafter examined under Section 108 of the Customs Act between Januar....
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....d no more than receiving the gold pursuant to a transfer ordered by the learned JMFC; no independent inquiry, technical examination, or contemporaneous material was placed on record to show application of mind by the seizing officer prior to seizure. 4.1. In this regard, the Appellant placed their reliance on the decision in the case of Om Sai Trading Company v. Union of India, 2020 (372) ELT 542 (Pat.), as affirmed by the Hon'ble Supreme Court at 2022 (382) ELT 9 (SC), and on the decision of this Tribunal in Shri Balwant Raj Soni v. Commissioner of Customs, Customs Appeal No. 75414/2022, and contended that 'reason to believe' must rest on the objective material existing prior to seizure and cannot be supplemented by reasons gathered thereafter. 5. Section 123 of the Act never shifted to the Appellant: It was submitted by the Appellant that the burden under Section 123 of the Act never shifted to the Appellant. The twelve gold bars seized by the police bore no foreign markings; they were intercepted at an inland location far away from any border, port or airport; and the Assam Hallmarking Centre's report dated 04.12.2020 recorded only the fineness of the gold (23.9 Ka....
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....itimate suspicion; that no documentary proof of licit possession was forthcoming at the time of interception, the purchase receipt having surfaced only after seizure; that the State Forensic Science Laboratory had noted physical irregularities on the receipt; that verification of the Delhi jeweller remained inconclusive; and that the prevailing pattern of cross-border gold movement through Manipur lent credence to the Department's case. It was contended that, in these circumstances, the presumption under Section 123 stood validly attracted and that the Appellant had failed to discharge the onus cast upon him. 8. Heard both sides and perused the appeal documents. 9. We find that, twelve gold bars weighing 1992.500 grams were recovered from the procession of the Appellant. As the appellant was not having any document for the licit purchase, the said gold was initially seized by the Police and later handed over to Customs authorities for further necessary action under the Customs Act. The Appellant claimed that the said gold belonged to the property of the family and submitted the purchase receipt dated 04.07.1992, which was not accepted by the investigation. Consequently, t....
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.... months prescribed under Section 110(2) expired on 01.05.2020. No Show Cause Notice was issued by that date. From the available records, we find that no extension was granted by the Commissioner of Customs. Thus, we find that the outer statutory ceiling of twelve months expired on 01.11.2020. 10.1. The Customs Department drew a Panchnama on 05.11.2020, four days after even the outer limit had expired and formally took custody of the gold from the police/treasury pursuant to a court order. The Show Cause Notice was ultimately issued on 25.10.2021, that is, twenty-three months and twenty-four days after the initial seizure on the smuggling allegation, and approximately eleven months and twenty-four days beyond the outer statutory limit. 10.2. In this regard, we refer the decision of the Hon'ble Supreme Court in Asstt. Collector of Customs v. Charan Das Malhotra - AIR 1972 SC 689 = (1971) 1 SCC 697 = (1983) 13 ELT 1477 (SC), wherein it has been held that the civil right to have the seized goods restored accrues upon the expiry of the initial period of six months, and that an order of extension passed after the expiry of an earlier extended period is of no avail to the Custom....
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....temporaneous satisfaction was recorded by any Customs officer. We also find that the gold bore no foreign markings whatsoever. It had been seized inland at a routine road check post, not at any border, port, airport, or notified customs area. The Adjudicating Authority's reliance on prevailing trends of gold smuggling in the North-East region to justify the formation of 'reason to believe' is, in our considered view, legally impermissible. A regional trend or generalised suspicion does not constitute specific, particularised 'reason to believe' in respect of specific goods seized from a specific individual. 11.2. The Hon'ble Supreme Court, in Gian Chand v. State of Punjab (1962 AIR 496), has categorically held that mere suspicion is not sufficient to justify seizure, and the prosecution must provide substantive evidence of foreign origin. In Union of India v. Mahesh Raj (1990 SCC (3) 115), the Hon'ble Supreme Court ruled that the burden under Section 123 arises only if there is prima facie evidence indicating foreign origin, which is entirely absent in this case. In D. Bhoormull (1974 AIR 859), the Hon'ble Supreme Court emphasized that suspicion alone is not a substitute for....
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....erson seized under Section 123, it must first be established that the goods are of foreign origin, and that mere suspicion is insufficient for this purpose. In Commissioner of Customs v. Abdul Gani - 2012 (278) ELT 474 (SC), the Hon'ble Supreme Court held that in the absence of foreign markings or documentation establishing foreign origin, the Section 123 presumption cannot be invoked by mere assertion. 12.3. We find that CESTAT, Kolkata in Customs Appeal No.75315 of 2022 - in Daleep Kumar Verma proprietor of M/s. Shreeji Traders and Manufacturers. Relying on the case law in Balanagu Naga Venkata Raghavendra vs CC Vijayawada 2021 (378) ELT 493 (Tri-Hyd), has held that the burden under Section 123 of Customs Act, to prove that the gold is not smuggled one, does not lie on the Appellants. 12.4. The Tribunal, Kolkata in Shri Balwant Raj Soni in Customs Appeal No.75414 of 2022 has held that the burden under Section 123 of Customs Act, to prove that the gold is not smuggled one, does not lie on the Appellants as it involved town seizure of unmarked gold. 12.5. The Tribunal, Allahabad in Sarvendra Kumar Mishra & Anr. Vs. Commissioner of Customs - 2021 (9) TMI 405 CESTAT - Al....
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....Receipt dated 04.07.1992, issued by M/s S.K. Johari & Jewellers, Kinari Bazar, Chandni Chowk, Delhi, in support of his claim that the gold belonged to the family property. The Receipt submitted by the Appellant records a purchase of gold weighing 1992.240 grams - a quantity closely corresponding to the seized quantity of 1992.500 grams, with a variation of 0.26 grams, which is negligible and entirely within ordinary weighing tolerance. The receipt was found at the family home in Manipur upon a search of family papers approximately three months after the seizure. We find that there is no forensic authority has found the receipt to be forged, fabricated, or manipulated. The Central Forensic Laboratory declined to undertake the analysis. The State Forensic Science Laboratory noted physical observations characteristic of a document of considerable age but made no adverse finding on genuineness. The verification at Delhi was inconclusive. 14.1. The Appellant gave two detailed voluntary statements under Section 108 of the Customs Act, maintaining ancestral family ownership. His elder brother, companion, and eight family members - wife, two brothers, sister-in-law, three sisters, and a....
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....of 2022 - Appellant Mr. Daleep Kumar Verma proprietor of M/s. Shreeji Traders and Manufacturers has set aside the Order of Confiscation by the Commissioner of Customs, Shillong, wherein Gold was seized from booked parcel containing 90 bangles through air cargo, Kolkata from Imphal by Indigo Airlines on 17.05.2019 having the weight of 5.22 kgs. It was held that the gold was purchased by them from indigenous sources, but DRI Officers have not taken into account the evidences submitted by them about their legal purchase in India (Para 18.3). There is no evidence available on record to prove that the gold were smuggled from Myanmar (Para 18.3) 15.2. In the CESTAT, Kolkata in Shri Balwant Raj Soni VERSUS the Commissioner of Customs (Preventive), Patna, Customs Appeal No.75414 of 2022, the Tribunal has set aside the Order of Confiscation by the Commissioner of Customs, Shillong, wherein Gold weighing 3999.590 gms. Valued Rs.1,67,98,278/- was seized from a passenger of a train. In this case, the Tribunal has held as under: 31. We find that the Impugned Order mainly relied upon the statements of the Noticees 1 to 5 to establish the foreign origin nature of the gold. Other than ....
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....): 34. In view of the above findings, it is held that the essential things for confiscation namely proof of the gold having been smuggled into India was not proved. The investigation has assumed that the impugned gold was smuggled from Sri Lanka and no corroborative evidence was produced by the DRI. More so, it was certified by the Court that the gold bars do not have foreign markings. AA has proceeded on wrong premises that the impugned crude Gold bars are of foreign origin. There was no positive evidence except the statement of the appellant. The retracted statement has not been corroborated with findings/evidence/statements of others i.e. the person supposed to have handed over the same to the appellant for transporting and the person who was supposed to receive. The burden of proof has not been discharged by the department. It has been proved that there was a violation of principles of natural justice by not allowing cross examination. Respectfully following the ratio of the Hon'ble Supreme Court in M/s.Oudh Sugar Mills Vs. UOI, I am constrained to set aside the order of the adjudicating authority confiscating the impugned gold and imposing penalty on the appellant. It....
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....ness testimony given voluntarily before a statutory authority. Accordingly, Question (vii) is answered in favour of the Appellant. 16.2. Tribunal, Kolkata in Shri Balwant Raj Soni in Customs Appeal No.75429 of 2022 has held that: Under section 112 (a) and (b) penalty is imposable when the person is found to be dealing with goods for which prohibition is in force or the goods are liable for confiscation. The gold bars/pieces dealt by the Appellants were established to be of Indian origin and hence not prohibited goods.... They were carrying the gold which were domestically purchased and hence there is no offence established against them.... Hence, we hold that penalties under sections 112(a) and (b) and 114 AA of the Customs Act, 1962 are not imposable in this case 16.3. Tribunal, Kolkata in AJIT BHOSLE Versus COMMISSIONER OF CUSTOMS (PREV.), KOLKATA, Final Order Nos. 77019-77022/KOL/2019, dated 9-8-2019 in Appeal Nos. C/75667-75670/2017 has held as under: Seizure - Gold seized on suspicion that it was smuggled - Seizure of gold in cut pieces having no marking and of different purity from melting house - Submission of documentary evidence in support of lawful....