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2013 (4) TMI 7 - AT - CustomsSmuggling goods – Demand of duty u/s 28 and penalty u/s 117 of the Customs Act. - Appellant is a goldsmith and in his custody gold and silver ornaments are found he could not produce any documents showing the licit possession and ownership of the goods - Appellant makes the following submissions that Gold is not notified under Section 123 and the said provisions would not apply. It is evident that the goods were seized by the Police under the presumption that they were stolen property and the goods were not seized by the Customs from the appellant. Therefore, the burden to prove the gold in question is not smuggled is not required to be discharged by the appellant and it is for the department to establish that the goods are smuggled and this onus has not been discharged by the department. Mere foreign marking on the gold does not by itself establish the smuggled nature of the goods. It can at best establish the foreign origin of the goods. Merely because the appellant could not produce the documents to establish the licit nature of the goods is not sufficient to establish the smuggled nature of the goods. Held that :- The argument provided by the appellant is wrong for the reason that subsequent to sub-section (2) of Section 123 clearly provides that the section applies to gold and the manufacturer thereof. Customs authorities did not seize the goods from the appellants; therefore, the provisions of Section 123 which casts the onus on the appellants to prove that the goods are not smuggled is not applicable, inasmuch as no seizure has been made from the appellant by the Customs. Therefore, the burden and onus of proof to establish the fact that the goods are smuggled lies on the Revenue and not on the appellants. In respect of these gold articles, there is no evidence whatsoever in record to show that they are of foreign origin. Tribunal do not find any infringement of the provisions of Customs Act so as to attract confiscation under Section 111(e) and (i) of the said Act and accordingly, and set aside the same. The next issue for consideration is whether the appellants are liable to pay Customs duty demanded under Section 28 of the Customs Act. Invoking the provisions of Section 28 applies to imported goods. Smuggled goods” are not “imported goods” as held by the Hon’ble Apex Court in the case of Commissioner of Customs v. Ambalal & Co. [2010 (12) TMI 16 - Supreme court of India]. Therefore, the provisions of Section 28 are not attracted in the case of smuggled goods. Thus, the determination of duty and the demand of duty in the instant case is not in accordance with law and, therefore, the same has to be set aside.
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