TaxTMI 
TaxTMI 
2026 (7) TMI 1563
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.... (ii) foreign currency equivalent Rs. 16,63,041/-. 4. The Adjudicating Authority had ordered absolute confiscation of entire gold and ordered confiscation of foreign currency and also imposed penalty of 8,00,000/- under Section 112 of the Customs Act, 1962. 5. The Commissioner (Appeals), after detailed examination, allowed the appeal and ordered that: i) Set aside absolute confiscation regarding 415.93 grams without markings an ordered unconditional release. ii) Upheld confiscation regarding 524.53 grams gold with markings but allowed redemption under Section 125 of the Customs Act, 1962. iii) Set aside Confiscation of foreign currency and allowed redemption. and, iv) Reduced penalty substantially. 6. The respondent raised preliminary objection regarding maintainability of the Departmental appeal. The respondent has objected to the maintainability of the appeal on the ground that the appeal is barred by the Monitory Limits Circulars issued by the Board under Section 131BA of the Customs Act, 1962. Learned Counsel for the respondent submits that in terms of Board Circular F.No.390/MISC/163/2010-JC dated 17.08.2011 as amended by Circular ....
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....ally litigation management policy to reduce avoidable appeals in low revenue matters. 12. However, the present case stands on a different footing. The Department is not challenging demand of duty or quantification of penalty, or computation of interest. The Department is challenging the appellate order in so far as it interferes with absolute confiscation of smuggled gold and foreign currency. In cases of confiscation, particularly absolute confiscation, the dispute is not merely monetary. Such proceedings involve enforcement of Customs restrictions, anti-smuggling measures and national economic interests. Under the Customs Act, confiscation is not merely a revenue mechanism. Confiscation is one of the statutory tools to combat smuggling and in force restrictions/prohibitions. Section 11 of the Customs Act empowers the Central Government to prohibit import or export of goods for several purposes, including maintenance of security of India, prevention of smuggling, conservation of foreign exchange, and prevention of injury to the economy of the country. Thus, Customs law is not enacted solely for collection of revenue. It also protects economic security, monetary stability, and n....
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....a. In that case, the Hon'ble High Court considered the applicability of Monetary Limit in confiscation matters and observed that for examining maintainability, the value of confiscated goods must be taken into consideration. Hon'ble High Court has held as follows: "6. On the earlier date, when the appeal was taken up, the learned counsel for the respondents/assessees raised an objection as to maintainability of the present appeals by relying on the Circular/Letter No. 390/Misc/30/2023, (dt.02.11.2023). For ready reference........ 7. Thus it is litigation policy of the Union of India to not prefer or press revenue appeals wherein the revenue implication may not exceed monetary limit of Rs. 1 crore. 8. While the confiscated gold was valued at more than Rs. 1 crore at the same time that was apportioned amongst three assessees namely Ms. Disha Tulsiani, Sri Nirmal Tulsiani and Sri Ashok Kumar Talhani. 9. Thus individual dispute in each of the appeals is for below the monetary limit of 1 crore." 16. Applying the above principle, even assuming the argument that the circular applies, the value involved in the present case is Rs. 71,96,988/-, which ex....
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....d reason to believe for seizure of Foreign Origin Gold Bullion and its consequential seizure and respondent has failed to discharge the burden cast on him under Section 123 of the Customs Act. 23. Denial of cross-examination does not vitiate proceedings. Redemption should not have been allowed by Learned Commissioner. The burden of proof was not discharged by respondent as provided under Section 123 of the Customs Act. 24. It is also submitted that only respondent Shri RK Jain has contested the Departmental appeal but none of the other parties have contested the appeal before CESTAT, thereby, other parties have nothing to state against the said Show Cause Notice. On adjudication, Learned Commissioner (Appeals), failed to give any coherent or logical reasoning for modifying the order of Adjudicating Authority. 25. Learned Authorized Representative, in view of the above submissions, has requested to set aside the impugned order and he stood the order of Adjudicating Authority. Learned AR has relied on the following cases: (i) Commissioner of Customs, Kerala Vs Om Prakash Khatri [2019 (3) TMI 457 - Kerala HC] (ii) Indru Ramchand Bharvani Vs Union of India [1....
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....granting unconditional release of 415.93 grams is justified and consistent with settled law. 28. Learned Counsel for the respondent submits that in respect of remaining 524.53 grams, it is not disputed that certain pieces bore markings such as "VALCAMBI SUSSE", "RAND" refinery, along with serial number on some biscuits. Learned Commissioner (Appeals), carefully analyzed this quantity and correctly distinguished between foreign markings indicating probable foreign origin, and proof of actual smuggling into India in violation of law. Even, assuming foreign origin, confiscation under Customs law requires evidence of illicit import or contravention of import conditions. The Department failed to establish, who imported the gold, from where it was imported, through which port is entered India and when such import occurred. 29. The respondent produced invoices, GST payments details and banking records to explain licit acquisition. Though the documents may not exactly tally with serial numbers, they clearly support bonafide purchase through business channels. Learned Commissioner (Appeals), took a balanced view that absolute confiscation was unwarranted and redemption on payment of f....
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.... is liable for confiscation? (b) Whether gold with markings (524.53 grams) justifies absolute confiscation? (c) Whether denial of cross-examination violates principle of natural justice? (d) Whether confiscation of foreign currency is sustainable? (e) Whether penalty is justified? 33. It is a admitted fact that the gold of 415.93 grams have no any foreign markings exists, no any serial number or refinery identification exists. The entire case of the Department rests on purity of gold and alleged statements only. Assayer Shri Krishna Murari, certified the purity as 89.54 & 99.83 of the respective gold. 34. It is settled law that purity alone cannot establish foreign origin. In the case of CC Vs RK Enterprises [2016 (340) ELT 67 (P&H High Court)] Hon'ble High Court held that mere high purity of gold cannot by itself establish foreign origin or smuggled nature of the goods; the Department must adduce independent corroborative evidence. Hon'ble Supreme Court in the case of Mohammad Umar [2015 (319) ELT 593 (SC)] held that purity alone is not conclusive proof that gold is of foreign origin or smuggled. It is also important that in the present ca....
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....n the absence of any corroborative evidence. Similarly, in Gian Chand Vs State of Punjab [1961 (11) TMI 1 - SC] the Hon'ble Supreme Court held that suspicion, however, strong cannot take the place of proof. 38. In the present case, recovery has been made from respondent's jewellery shop i.e. M/s Jain Jewel Park and no any link has been established with any act of smuggling. Therefore, we hold that the allegation of smuggled gold is not supported by any tangible evidence. 39. Certainly, burden of proof of under Section 123 of the Customs Act, 1962 on the respondent, but this burden is not beyond reasonable doubt as in criminal trial but burden is like in civil nature, means only preponderance of probability is applied in this cases. The Adjudicating Authority has ordered the absolute confiscation of gold. It is a settled position that gold in not a prohibited item but a restricted item, and therefore, even where confiscation is justified, the option of redemption under Section 125 of the Customs Act must be given ordinarily. In Shaik Jamal Basha Vs Government of India [1997 (91) E.L.T. 277 (A.P.)] it was held that absolute confiscation of gold is not justified in routine cases....
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....able to conclude that the seized currency was acquired unlawfully. Given this, imposing a penalty based on assumptions rather than concrete evidence would be inappropriate. The decision should be based solely on facts, not on presumptions or speculative reasoning. 42. Earlier decision of this Bench in the case of Shri Kishore Kumar Gilds, supra, it was held that the burden is entirely upon the Department to prove that there was a sale and the sale was smuggled gold and the money represents such sale proceeds. Tribunal Kolkata in the case of Bijoy Kumar, Agrawala and others Vs Commissioner of Customs (Preventive) [2024 (5) TMI 529 - CESTAT - Kolkata], where in, it was held that in the absence of clear nexus between cash and smuggled goods, confiscation of currency is not sustainable. The relevant paras are as thus: "13.1. We observe that this view has been taken by the Tribunal in the case of Ramachandra v. Collector of Customs [1992 (60) E.L.T. 277 (Tribunal)], wherein it has been held that the Indian currency cannot be held as sale proceeds of smuggled gold and the same is not liable for confiscation. The relevant part of the decision is reproduced below: - "4....
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....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." 13.2. The same view has been held in the case of Sudesh Kumar Mittoo v. Collector of Cus. & C.Ex., Jaipur [2001 (136) E.L.T. 100 (Tri. - Del.)] wherein it was held as under: - "8. ... As regards the confiscation of Rs. 25,000/- Indian currency, it is not possible to say that this currency was as a result of transaction of smuggled gold biscuits. Gold biscuits have been sold by the jewellers to Shri Sudesh Kumar. The cash pertained to him and this cash was not out of smuggled gold. Therefore, confiscation of Indian currency is set aside. It is also seen that the Collector has not given deta....