2000 (4) TMI 618 - AT - Customs

Issues Involved:
1. Confiscation of 37 gold biscuits and Indian Currency worth Rs. 10 lakhs under the Customs Act.
2. Validity of the penalties imposed on Phool Chand Jain and Vikram Jain under Section 112 of the Customs Act.
3. Authenticity and relevance of the Baggage Receipt No. 018930, dated 17-8-97.
4. Burden of proof under Section 123 of the Customs Act.
5. Admissibility and credibility of statements and affidavits under Section 108 of the Customs Act.
6. Determination of whether the Indian Currency represented sale proceeds of smuggled gold.

Detailed Analysis:

1. Confiscation of 37 gold biscuits and Indian Currency worth Rs. 10 lakhs under the Customs Act:
The Tribunal examined whether the 37 gold biscuits and Rs. 10 lakhs in Indian Currency seized from M/s. K.I. Chains were liable to confiscation under the Customs Act. The Commissioner of Customs (Prev.), Mumbai, had confiscated the gold biscuits under Section 111(d) of the Customs Act, but released the Indian Currency due to a lack of evidence linking it to the sale proceeds of smuggled gold.

2. Validity of the penalties imposed on Phool Chand Jain and Vikram Jain under Section 112 of the Customs Act:
The Commissioner imposed penalties of Rs. 2.5 lakhs each on Phool Chand Jain and Vikram Jain. The Tribunal upheld the penalty on Vikram Jain, considering it not excessive. However, it reduced the penalty on Phool Chand Jain to Rs. 1 lakh, acknowledging his role as merely assisting his brother.

3. Authenticity and relevance of the Baggage Receipt No. 018930, dated 17-8-97:
The appellants claimed that the gold was legally imported by Mohammad Hanif Saikh and sold to L.K. Soni, who then sold it to Vikram Jain. The Tribunal found inconsistencies in the appellants' narrative, noting that the baggage receipt did not cover the seized gold. This discrepancy, along with other factors, led to the conclusion that the gold was not the same as that cleared under the baggage receipt.

4. Burden of proof under Section 123 of the Customs Act:
The Tribunal emphasized that the burden of proving the licit acquisition of the gold rested on the appellants under Section 123 of the Customs Act. The appellants failed to discharge this burden satisfactorily. The Tribunal noted that the explanations provided were inconsistent and lacked credibility.

5. Admissibility and credibility of statements and affidavits under Section 108 of the Customs Act:
Phool Chand Jain's initial statement under Section 108, which he later retracted, was deemed credible by the Tribunal. The Tribunal referenced the Supreme Court's stance that such statements are material evidence. Vikram Jain's delayed and inconsistent statements further weakened the appellants' case. The Tribunal also found the affidavits and other documents submitted by the appellants to be unconvincing.

6. Determination of whether the Indian Currency represented sale proceeds of smuggled gold:
The Tribunal agreed with the Commissioner that the Department had not proven that the seized Indian Currency was the sale proceeds of smuggled gold. The burden of proof, as required, was not met by the Department, leading to the release of the currency.

Conclusion:
The Tribunal upheld the confiscation of the 37 gold biscuits and the penalties imposed on Vikram Jain, while reducing the penalty on Phool Chand Jain. The Indian Currency was ordered to be released due to insufficient evidence linking it to smuggled gold. The appeals were disposed of accordingly.

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