The Allahabad High Court dismissed appeals challenging an order by the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) which had set aside the confiscation of 3.5 kg of gold bars valued at Rs. 1,03,25,000/- initially seized by the Customs Authority under Section 111 of the Customs Act, 1962.
In 2018, customs authorities seized 3.5 kg of gold bars valued at Rs. 1,03,25,000/-. The adjudicating authority subsequently ordered the confiscation of the gold. The assessees contested this order before the Commissioner (Appeals) Customs, GST & Central Excise. The Commissioner partially allowed the appeal, offering the option to redeem the confiscated gold upon payment of a fine.
The assessees further appealed to CESTAT, contending that the gold bars in question were possessed by them as a result of the execution of the Will by her grandmother after her death in 2010.
The Revenue, represented by Gaurav Mahajan, argued that the assessees failed to establish the legality of the gold’s origin. The markings on the gold bars, they argued, indicated a foreign origin, raising suspicion of smuggling.
Ashish Bansal, Nishant Mishra, and Surendra Kumar Garg, counsels for the assessee, countered that the Will was duly notarized and probated, and the revenue department failed to establish it as a fabricated document.
CESTAT allowed the assessees’ appeal, holding that the revenue department did not provide sufficient evidence to disprove the Will’s authenticity. The Department of Revenue then filed appeals before the High Court.
The High Court bench, comprising Justices Saumitra Dayal Singh and Surendra Singh, dismissed the appeals despite acknowledging the dispute regarding the gold bars’ origin. The court’s decision rested on the government’s litigation policy, as highlighted in the judgment itself. This policy mandates that appeals not be filed before tribunals like CESTAT when the revenue implication falls below a specific monetary limit.
The court noted that while the confiscated gold was initially valued at over Rs. 1 crore, it was apportioned amongst three assessees. The Revenue, despite being granted time, failed to disclose the individual revenue effect in each appeal. This lack of disclosure regarding the revenue implications in each case made it impossible for the court to determine if the appeals met the government’s monetary threshold for pursuing litigation.
Consequently, the High Court dismissed the appeals due to the low monetary limit involved.
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