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2021 (9) TMI 405 - AT - CustomsSmuggling - Gold bars - goods of foreign origin or not - burden of proof u/s 123 of the Customs Act, 1962 - sanctity of the statement recorded under section 108 - Confiscation - penalty - HELD THAT:- Admittedly this is a case of town seizure wherein, the impugned gold was intercepted, initially taken possession of by the officer of GRP and then handed over to the Customs. Admittedly, the gold did not have any tell-tale foreign markings and it was merely accused that the markings were removed to hoodwink investigation. The place where seizure took place is not Customs Area - Hon’ble Supreme Court in the case of GIAN CHAND AND OTHERS VERSUS STATE OF PUNJAB [1961 (11) TMI 1 - SUPREME COURT], wherein in case of seizure by the Police and thereafter the possession was shifted to the Customs Officer held that the pre-requisite of seizure is not satisfied. Accordingly, it is held that the circumstances as required under the Customs Act are not satisfied and consequentially the whole burden or onus to establish the smuggled nature of gold is on the Revenue. As admittedly, the gold having no foreign markings, the onus would be on department to prove the smuggled nature of the same. This onus was not discharged. Moreover, the provisions of Section 138B of the Customs Act have not been complied with and therefore, the sanctity of the statement recorded under section 108 has been lost and consequently, it cannot be conclusively relied upon - Valuer is expected to arrive at the purity and value of the Gold in a scientifically established manner. If his services were required only to value the Gold, the same can be arrived on the basis of day to day Bullion rates announced by various exchanges. In addition, fact remains that the Gold did not have any foreign markings; it has not been established that the same has been smuggled. The circumstances would certainly create reasons to believe that the impugned gold could be a smuggled one necessitating further probe. It does not constitute reasonable belief to seize the goods under Section 123 of the Customs Act, 1962. Confiscation - HELD THAT:- Neither foreign origin of the gold nor the nature of the same being smuggled is conclusively established other than merely relying on the conclusions drawn from the statement of Shri Dhuria. In the absence of action under Section 138B of Customs Act, 1962 by Revenue, statement of Shri Dhuria alone cannot be relied upon for sustaining the allegation of smuggling of gold, under the provisions of the Customs Act. Further, no reasonable belief has been established that the impugned Gold is liable for confiscation. Penalty - HELD THAT:- When goods are not held to be liable for confiscation, no penalty can be imposed under Section 112 of Customs Act, 1962. The respondent Commissioner are directed to return the gold seized forthwith and/or if the gold has been disposed, to return the sale proceeds along with interest as per rules, within six weeks of the date of receipt or service of the copy of this order - appeal allowed.
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