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2024 (1) TMI 467 - AT - CustomsAbsolute Confiscation under Section 111(b) and Section 111(d) of the Customs Act, 1962 - penalty imposed under Section 112 (b)(i) and Section 112(b) of the Act - non-imposition of penalty under Section 114AA of the Act against the appellant, Suresh Bhonsle - recovery of legal possession of the gold bars - foreign origin Gold or not - Burden of proof - prohibited goods or not. Foreign Origin goods or not - HELD THAT:- The contention of the appellant that gold is not of foreign origin is not sustainable in view of his own statement dated 15.07.2016 where he specifically admitted that he used to get gold from one Mohan of Kathmandu, Nepal through one Rajesh. Gold of foreign origin was received in melted form to hide its identity and suppress that it is of foreign origin - Once there is an admission by the appellant himself nothing further is required to be proved to the contrary. The Apex Court in SURJEET SINGH CHHABRA VERSUS UNION OF INDIA [1996 (10) TMI 106 - SUPREME COURT] held that confession made by the appellant binds him. Reliance is placed on COMMISSIONER OF C. EX., MADRAS VERSUS SYSTEMS & COMPONENTS PVT. LTD. [2004 (2) TMI 65 - SUPREME COURT] where it has been held that it is a basic and settled law that what has been admitted need not be proved. Onus to proof (shifting burden) - HELD THAT:- On the issue of burden of proof, the submission that gold was entrusted to Amzad Khan and Imran Mullick for delivery to Delhi under proper voucher would shift the burden on the department to prove that it was smuggled gold, the challan issued by the appellant had no sanctity as he could not show the source of procuring the gold. The appellant has not been able to discharge the burden that he has purchased the gold as per the specified sources by the RBI - as per Section 123 of the Act the department was under reasonable belief that it was smuggled gold and therefore the burden was on the appellant being the owner of it to prove that the gold seized was not smuggled gold, which remained undischarged at his end - as the appellant failed to prove that the gold seized was validly procured in compliance of the statutory provisions whereby gold has been put in restricted category by DGFT and in terms of the RBI Circular only nominated agencies and banks are entitled to import the foreign marked gold bars. Absolute Confiscation - HELD THAT:- The factum of recovery of such large quantity of 10 kgs. of gold concealed under the shirt speaks for itself and the appellant being the owner thereof was unable to provide any licit document of procuring the gold, justifies the confiscation under Section 111(b) and 111(d). Taking note of the fact that the appellant had indulged in such illegal gold transactions in the past, the absolute confiscation needs to be affirmed and therefore the gold seized cannot be provisionally released in terms of section 110A read with Section 125 of the Act - in the present case the appellant neither adduced any evidence to show that he had legally procured the gold by following requisite conditions of payment of customs duty and other charges nor did he produce any documents for having purchased the said gold within India and therefore the gold recovered were in violation of the prohibition imposed by DGFT and RBI apart from the provisions of the Customs Act hence was liable for confiscation under section 111 of the Act. Purity of the gold, in the instant case is not really relevant in view of the peculiar circumstances, i.e., the voluntary statements of all the persons recorded under section 108 of the Act which reveals the conspiracy in executing the smuggling of gold, the manner of concealment of gold in such large quantity when recovered, its transportation and the use of fake challans along with the phone call details clearly establish the role and involvement of all the persons involved . The appellant by taking such plea is indeed trying to mislead but the fact is that the goods smuggled, even if they change their form by melting, they still remain smuggled goods which are liable to confiscation under the Act. Restricted or prohibited goods - HELD THAT:- As gold is a restricted item, the same has been treated as ‘prohibited goods’ in view of the interpretation placed by various decisions on the definition of ‘prohibited goods’ as defined in Section 2(33) and hence the same have been held to be liable for confiscation. Once it is found that the gold recovered was not under valid documents, the same would be treated as prohibited goods liable to confiscation and consequently, penalty is inbuilt and is leviable under Section 112 of the Act - Both the appellants were consciously and intentionally dealing with illegal activity of sale purchase of gold and therefore the penalty imposed by the adjudicating authority is justified and needs no interference. Appeal of appellant dismissed. Failure to Impose penalty under Section 114AA of the Act - HELD THAT:- From the perusal of the impugned order, it is found that there is no discussion by the Adjudicating Authority on the proposal of imposing the penalty under Section 114AA. Without stating anything on this issue on merit, it is considered appropriate to remand the matter to the adjudicating authority for limited purpose to consider the said proposal in the light of the facts and circumstances and the legal provisions. The appeal filed by the Revenue is allowed by way of remand.
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