In a major ruling, The Kolkata bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) quashed confiscation of gold on retracted statements without other corroborative evidence.
The issue to be decided was whether the retracted statements of the appellant can be relied upon to establish the guilt of the Appellant and confiscate the gold in question in this case.
The assessee, while traveling in a van, was intercepted by Officers of Imphal Customs, who, upon examination and personal search, found 12 pieces of gold biscuits weighing approximately 2002.26 grams in his possession. Lacking any documentation for the lawful importation of the gold, it was seized under Section 110(1) of the Customs Act, 1962, based on the ‘reasonable belief’ that it was smuggled into India without payment of Customs Duty.
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.
The assessee was arrested under Section 104 of the Customs Act, 1962 and produced before the Chief Judicial Magistrate, Imphal on 21.06.2014 and he remained in judicial custody till 05.07.2014. Subsequent to his arrest, another Statement dated 21.06.2014 was recorded wherein the appellant stated that he did not know the residential address of Ramaswami whom he met at Moreh Bazar to collect the gold biscuits.
A Show Cause Notice dated 14.11.2014 was issued to the appellant proposing to confiscate the gold under Section 111(b) and (d) of the Customs Act, penalty was also proposed under Section 112(b)(ii) of the Customs Act.
The Commissioner (Appeals) has upheld the confiscation and penalty imposed in the Order-in-Original vide the impugned order.
In the grounds of appeal and during the course of the hearing, the assessee made several submissions, the gold was purchased by his father, and he inherited it from him. The gold was not of foreign origin and did not bear any foreign markings. The Department failed to provide evidence proving that the gold in question was of foreign origin or smuggled. He never stated that the gold was given to him by one Shri Ramaswami of Moreh Bazar.
He claimed that the statements given on 20.06.2014 and 21.06.2014 were not voluntary and denied their contents. The purity of the gold, measured at 995.2 mille, 995.1 mille, and 995.0 mille, was below the International Standard of Purity. The seizure of the gold was illegal because there was no ‘reason to believe’ that it was smuggled. There was no evidence on record to suggest the gold was of foreign origin, thus the provisions of Section 123 of the Customs Act, 1962, do not apply in this case.
The two member bench of the tribunal comprising Ashok Jindal (Judicial member) and K. Anpazhakan (Technical member) held that the gold bars/pieces cannot be confiscated based on the retracted statements without any other independent corroborative evidence.
Further observed that there was no evidence available on record to have the reasonable belief that the gold was of foreign origin and accordingly, the provisions of Section 123 of the Customs Act, 1962 was not applicable in this case.
The retracted statements of the assessee cannot be relied upon to confiscate the gold in question in this case. CESTAT set aside the impugned order and allow the appeal filed by the assessee.
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