The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the gold bar with foreign marking is liable for absolute confiscation if the source of the same is not explained.
Based on the information from a specific intelligence was gathered that foreign origin gold were being smuggled into India by way of concealment, cleared through Anna International Airport and brought to the premises of Shri M.S. Alaudeen, one of the assessees-appellants. Accordingly, the goods were seized and the department proposed to confiscate the seized gold under Sections 111 (d), 111(i) and 111(l) of the Customs Act, 1962 read with Section 123 of the Customs Act, 1962.
The appellant challenged the order before the Tribunal.
Mr. P. Dinesha, Member (Judicial) observed that the assessee-appellant is not an importer, but a person from whose possession the gold in question has been seized.
“He says that he is not the owner, but clearly asserts that the same belonged to his customers, whose identity has to be brought on record now. If he satisfactorily proves the source of the said gold, then, perhaps, the situation may be different since there remains nothing to allege irregularity as to importation. Redemption may have to be offered in terms of Section 125 of the Customs Act,1962, subject to redemption fine as per the provisos thereunder and the discretion is always subject to the second proviso to Section 125 ibid. The gold bar with foreign marking, the source of which is not explained, is liable for absolute confiscation since the same would amount to the importation of a prohibited goods. Insofar as the other two assessees-appellants are concerned, the penalty on them would depend on the penalty, if any, that would be levied on the first assessee-appellant, since it is the case of the Revenue that all the three assesses-appellants were involved in the alleged activity,” the Tribunal said.
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