Madras HC Upholds Seizure of 3 Kg Crude Gold Bars Due to Carrier’s Inability to Prove Legitimate Source u/s 123 of Customs Act
The respondent first confessed to carrying the gold for someone else, but later retracted the statement and claimed ownership over the same
The Madras High Court recently ordered the permanent confiscation of 3.097 kg of crude gold bars seized upon the respondent’s inability to prove a legitimate source of acquisition of, or ability to own the gold. The Directorate of Revenue Intelligence (DRI) based on intelligence inputs that smuggled gold was being transported intercepted the Respondent, Mohammed Ali Jinnah...
The Madras High Court recently ordered the permanent confiscation of 3.097 kg of crude gold bars seized upon the respondent’s inability to prove a legitimate source of acquisition of, or ability to own the gold.
The Directorate of Revenue Intelligence (DRI) based on intelligence inputs that smuggled gold was being transported intercepted the Respondent, Mohammed Ali Jinnah at Pallavaram Bus Stand, Chennai and recovered two crude gold bars weighing 1.720 kg and 1.377 kg respectively.
Initially, Mohammed Ali Jinnah gave a confessional statement admitting he was carrying the bars at the behest of one “Murugan” to deliver to another named “Batcha @ Pitchai,” in exchange for ₹5,000. He later retracted this statement, claiming the bars were made from gold jewellery and coins acquired during his years working abroad and melted locally for his daughter's wedding.
The submissions made by the respondent were attempted to be corroborated through statements made by family members of the respondent ; however, glaring inconsistencies in their statements raised suspicion even further. Mohammed Ali Jinnah had submitted meagre bank balances, unverifiable jewellery purchases and use of mobile SIMs registered in false names.
Before the High Court, Sai Srujan Tayi, Senior Standing Counsel for Customs argued that once possession was established the onus squarely lay on the respondent to prove that the goods were acquired lawfully lies on the accused.
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Conversely, B.Kumar, appearing for the respondent pointed out to procedural errors - that the certificate issued by the assayer who certified the weight of the gold was not furnished to the respondent at the time of mahazar proceedings or thereafter.
The Division Bench of Justice R. Suresh Kumar and Justice C. Saravanan observed that adjudication under the Customs Act is governed by the “principle of preponderance of probability”; it found the respondent’s shifting stand “bundled with contradictions”, held that he “has not discharged the burden of proof cast on him under Section 123”, and accepted that the Additional Commissioner was correct in ordering confiscation.
The Court further criticized the “incomplete” investigation that allowed the real smugglers to slip away and said that such lapses did not erase the statutory burden borne by one from whose possession gold is seized
Consequently, the Madras High Court allowed the appeal while ordering the permanent confiscation of the gold, but reduced the personal penalty on the respondent from ₹5,00,000 to ₹1,00,000 as the respondent was “only a carrier with no means”.
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