1998 (12) TMI 201 - AT - Customs

Summary

Issues:
1. Competency of the Additional Collector to adjudicate under the Gold (Control) Act.
2. Ownership of the seized gold.
3. Determination of the gold's origin.
4. Imposition of penalty under the Gold (Control) Act.

Competency of the Additional Collector to adjudicate under the Gold (Control) Act:
The appellant contended that the Additional Collector lacked jurisdiction to adjudicate under the Gold (Control) Act as the Collector, not the Additional Collector, was empowered to do so at the relevant time. Citing a judgment of the Karnataka High Court, the appellant argued that the Additional Collector was not the competent authority. However, the Additional Collector's order was passed following the Appellate Tribunal's directive due to a failure of natural justice principles. As the Tribunal's decision was not appealed, the plea challenging the Additional Collector's jurisdiction could not be entertained.

Ownership of the seized gold:
The appellant claimed that the seized gold belonged to his deceased father-in-law, and no notice under Section 79 of the Gold (Control) Act was issued to the owner. Despite the appellant's family members disclaiming knowledge of the gold being handed over to him, insufficient evidence existed to definitively establish ownership. This lack of conclusive evidence raised doubts regarding the ownership of the gold.

Determination of the gold's origin:
The appellant argued that the gold was deemed foreign solely based on markings commonly found on Indian gold. Citing a previous Tribunal decision, the appellant contended that the presence of certain markings did not conclusively prove foreign origin. However, Section 123 of the Act shifted the burden of proof to the appellant to demonstrate that the gold was not smuggled. The presence of foreign markings led to a reasonable belief of foreign origin, and as the appellant failed to discharge the burden of proof, the presumption of foreign origin was upheld.

Imposition of penalty under the Gold (Control) Act:
The Additional Collector erroneously imposed a composite penalty under the Gold (Control) Act, despite its repeal and the absolute confiscation of the gold. The Tribunal deemed this penalty impermissible and set aside the penalty imposed under the Gold (Control) Act, upholding a reduced penalty under the Customs Act. The appeal was allowed in part, with the penalty under the Gold (Control) Act being set aside, and the penalty under the Customs Act confirmed. Appeal C/317/92 was dismissed.