The Kolkata Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) upheld the confiscation of gold and penalty under Section 112(b) of the Customs Act, 1962, after the assessee failed to produce licit documents proving lawful possession of gold concealed behind the rear seat armrest of a car.

Md. Altaf,appellant-assessee,was intercepted by the DRI on 27.08.2019 at around 17:20 hrs while travelling in a white Hyundai Verna (WB 20AZ7971) from Kolkata towards the Vidyasagar Setu Toll Plaza. Acting on specific intelligence, officers questioned the occupants about carrying contraband, which they initially denied.

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However, upon repeated questioning, they admitted to transporting smuggled gold bars concealed in a specially built cavity behind the rear seat armrest.

The assessees failed to produce any documents proving lawful possession, acquisition, transportation, or dealing of the gold. Subsequent investigation led to the recovery of eight rectangular gold bars and one cut piece of 24-carat gold of foreign origin, weighing a total of 8000.19 grams and valued at ₹3,19,20,758/-. A CRCL report confirmed purity levels of 99.8% and 99.6%.

Considering the gold to be smuggled, a show cause notice was issued for absolute confiscation and imposition of penalties. As no one claimed ownership, the adjudicating authority ordered confiscation under the Customs Act, 1962, and levied a penalty under Section 112(b). The assessee challenged the penalty before the tribunal.

The assessee counsel argued that the assessee under a bona fide belief, had taken the vehicle for travel,were unaware of the gold inside, and did not claim its ownership, so the penalties should not have been imposed.

The two member bench comprising Ashok Jindal (Judicial Member) and K.Anpazhakan (Technical Member) heard the parties and perused the record. It found that during the investigation, the assessee were found carrying the impugned gold in the vehicle they were travelling in, concealed in a specially built cavity behind the rear seat armrest.

The assessee admittedly did not possess any licit documents for the gold, and the burden was on the assessee to prove that it was not procured through illicit means, which he failed to do.

The appellate tribunal held that the adjudicating authority had rightly confiscated the gold and imposed penalties under Section 112(b) of the Act. Therefore, it upheld the impugned order and dismissed the appeal.

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