2000 (9) TMI 133 - AT - Customs

Summary

Issues Involved:
The issues involved in this case include the lawful acquisition of foreign marked gold and gold chains, liability to confiscation under Section 123 of the Customs Act, burden of proof on the accused, and the legality of importation and acquisition of gold.

Summary:

Lawful Acquisition of Gold and Chains:
The appellants, involved in manufacturing gold chains, were found with foreign marked gold and gold chains during a search. The Customs alleged liability to confiscation under Section 123 of the Customs Act, claiming the gold was illegally acquired. The appellants argued that the gold was lawfully acquired, providing evidence to support their claim. The Commissioner, however, did not accept their pleas and confiscated the gold and chains, imposing a penalty. The appellants appealed against this decision.

Burden of Proof and Section 123:
Section 123 of the Customs Act shifts the burden of proof to the accused to establish the lawful importation and acquisition of seized gold. The appellants did not question the reasonable belief of the Customs but consistently claimed the gold was legally acquired. The burden of proof thus fell on the appellants to demonstrate the lawful origin of the gold.

Legal Framework and Gold Importation:
Gold holds significant cultural and economic value in India. The legal importation of gold was regulated under various Acts and restrictions to curb smuggling. The case highlighted the challenges in distinguishing legally imported gold from smuggled gold due to liberalization policies leading to a flood of foreign marked gold in the market.

Judgment:
Upon examination, the Tribunal found that the appellants had sufficiently discharged the burden of proof regarding the lawful acquisition of the foreign marked gold. The orders of confiscation of the gold and chains were set aside as the Customs failed to establish reasonable belief in the confiscation of the gold chains. Consequently, the penalties imposed on the appellants were also revoked, and the appeals were allowed with consequential reliefs.