The Coram of Ashok Jindal (Judicial Member) and K. Anapazhakan (Technical Member) of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ), Kolkata, held that Section 123 of the Customs Act, 1962, is not applicable without material evidence.
The assessee was traveling in a van, he was intercepted by the Officers of Imphal Customs. On examination and personal search of his body, the Officers found in his possession 12 pieces of gold biscuits, totaling weighing 2002.26 grams approximately. As the appellant was not having any document for the licit importation of the same, the gold was seized under Section 110(1) of the Customs Act, 1962 under the ‘reasonable belief’ that the said gold 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 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 Shri 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 Act.
The said Notice was adjudicated vide Order-in Original dated 31.07.2015 wherein the adjudicating authority has ordered confiscation of the gold biscuits valued at Rs.49, 74,605/-. He also imposed a penalty of Rs.10, 00,000/- on the appellant under Section 112(b)(ii) of the Customs Act.
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 has inherited the gold from his father, the said gold was not of foreign origin and did not bear any foreign marking on it. As there was no evidence available on record to have the belief that the gold was of foreign origin and accordingly, the provisions of Section 123 of the Customs Act, 1962 is not applicable in this case.
The gold has been confiscated only on the basis of the Statements dated 20.06.2014 and 21.06.2014 of the appellant which the assessee has retracted and the retracted statements have no evidentiary value.
In the absence of any corroborative evidence to substantiate the allegation that the gold is of smuggled in nature, the statements alone cannot be relied upon to confiscate the said gold.
The bench observed that “we observe that the questions to be answered in this case are whether the provisions of Section 123 of Customs Act, 1962 are applicable in this case”
Under the facts and circumstances of this case, the provisions of Section 123 of Customs Act, 1962 were not applicable in this case, since it was not established that the gold was of foreign origin.
Accordingly, CESTAT set aside the impugned order and allow the appeal filed by the assessee.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
