CESTAT Upholds Quashing of Penalty on Confiscation of Seized Gold Bar on ground of Absence of Smuggling of origin gold [Read Order]

The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) upheld the quashing of the penalty imposed on the confiscation of seized gold bar on the grounds of absence of smuggling of origin gold. 

Bajrang Ingole, the respondent-assessee was engaged in facilitating the melting of 10 Tola Bars believed to be gold of foreign origin, and the revenue appealed against the order passed by the Commissioner(Appeals) for quashing the penalties in terms of Section 112(b)(i) of the Customs Act, 1962 on the assessee for the alleged act of smuggling of origin gold. 

Debaditya Banerjee, the counsel for the department contended that the confiscation of seized goods i.e. one piece of gold bar having a total weight of 1000.00 grams valued at Rs.30,50,000/- in terms of Section 111(b) and (d) of the Customs Act was legally sustainable and the penalty imposed against the assessee was liable to be sustained. 

S.Chakraborty, the counsel for the assessee contended that the word `smuggled’ means that the goods were of foreign origin and they had been imported from abroad and the goods themselves did not suggest that the petitioner was an old smuggler or a dealer in smuggled goods and if there was such information with the customs, they ought to have disclosed it and the goods themselves did not suggest any illicit importation. 

The Bench observed that there was no definite evidence to show that the assessee knew or had reason to believe that those items were smuggled and the impugned order had concluded that the gold bars/pieces were smuggled into India only based on assumptions and presumptions without any concrete evidence to substantiate this claim. 

A single-member bench comprising Ashok Jindal (Judicial) held that the impugned gold cannot be seized under Section 110 of the Customs Act and therefore the gold bar was not liable for confiscation and no penalty was imposable on the assessee and upheld the order passed by the Commissioner (Appeals). 

To Read the full text of the Order CLICK HERE

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