Penalty Imposed u/s 112(b) of Customs Act for Confiscation of Seized Gold Bars due to Mere Presumption of Smuggling: CESTAT quashes Penalty [Read Order]

The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the penalty for imposing under section 112(b) of the Customs Act, 1962 for confiscation of seized gold bars on the ground of mere presumption of smuggling. 

Shreyas Agarwal, the appellant assessee appealed against the order passed for imposing a penalty for confiscation of gold bars, cut pieces of gold, etc by the appellant authority. 

Amit Awasthi, the counsel for the assessee contended that it was alleged that based on reasonable belief, the assessee was involved in the smuggling of gold and silver from Indo Bangladesh border through District, West Bengal and this allegation was purely a figment of imagination that the subject golds bullion were smuggled and subsequently melted and converted into bar another form for further sale in the Indian market. 

Further submitted that the revenue had failed to adduce any positive, affirmative, and tangible evidence to establish the charges that the goods were smuggled from Bangladesh and had proceeded on unwarranted assumptions and presumptions. 

Faiz Ahmed, the counsel for the revenue relied on the decisions made by the lower authorities and contended that the assessee failed to produce any licit documents in support of possession/acquisition, dealing with the gold bars, and thus the goods were seized under Section 110 of the Customs Act, 1962 on the reasons to believe that those were liable for confiscation under Section 111 of the Customs Act. 

The bench observed that the assessee had been able to show the source of procurement of gold and the revenue had failed to come with positive evidence that the gold in question was smuggled. Therefore, the gold in question was not liable for confiscation. 

The two-member bench comprising Jindal (Judicial) and K.Anpazhakan (Technical) held that the penalty imposed was not as per the law and liable to be deleted while allowing the appeal filed by the assessee. 

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