No Penalty on Confiscated Gold Bar in the presence of Cogent Evidence: CESTAT [Read Order]

The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Delhi bench held that no penalty arises on a confiscated gold bar in the presence of cogent evidence.

The appellant was represented by Sh. Rajesh Rawal and the respondent were represented by Sh. Rakesh Kumar.

On the follow-up action search conducted at the residential premises of Sh. Anand Aggarwal the appellant, two yellow Gold bars engraved with the markings HERAEUS 9950, 1 kiloof 24 carats (9950) purity, totally weighing 2 kgs. and Indian Currency amounting to Rs. 11.31 lakhs were recovered and resumed vide panchnama. The two gold bars were examined and valued the ‘two gold bars’ engraved with the markings HERAEUS  9950, 1 kilo (each bar) 24 carats (9950) purity, totally weighing 2 kgs. at Rs. 59,10,000/-.

The appellant stated that both the gold bars were gifted by his in-laws on the occasion of the marriage of his daughter and submitted the ‘Deed of Gift’. He further stated the cash resumed was the sale proceeds of his firm, M/s New Sky International and he submitted the cash book of M/s New Sky International, for the month of April, 20 and the cash was the sale proceeds of the trading of the goods, mobile phones.

The genuineness of the will was doubted by the commissioner who held that the appellant has failed to discharge the onus under Section 123 of the Customs Act andconfiscation of the two gold bars was ordered by the adjudication order u/s111(d) and (l)of the Customs Act.  Further, a penalty of Rs. 5 lakhs was imposed under Section 112(a) and a penalty of Rs. 1 lakh underSection 114AA of the Customs Act.

Mr Anil Choudhary, member (judicial) Mr Raju, member (technical) observed that the cogent explanation given by the appellant as regards receipt of the two gold bars by way of inheritance under will have are true as under the same will, late father of the appellant has bequeathed the immovable property to the mother of the appellant. Further observed that documentary evidence is supported by oral evidence has legality and overrides the oral statement with regard to the source of the gold bars.

The Tribunal observed that the appellantexplained the licit possession of the two gold bars, as received by way of succession under the will of his father. The Tribunal modified the impugned order by upholding the order of confiscation with an option to redeem on payment of duty and redemption fine of Rs.1,00,000/-,Penalty under Section 112(a) is reduced to Rs. 50,000/-. The Tribunal set aside the Confiscation u/s 111(l) and penalty. The appeal was allowed in part.

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