Legal principle

A person found in conscious concealed possession of gold who fails to discharge the burden of proof under section 123 of the Customs Act, 1962 cannot escape confiscation and penalty under section 112(b) on mere technical pleas such as miniscule weight variation or absence at appraisal and disposal, where the seizure panchnama, appraisement report and statements stand corroborated.

Court decision

The Tribunal upheld the Order-in-Original dated 28.03.2024, held the recovered gold, the jacket used for concealment and the packing material liable to confiscation, upheld the penalty on the appellant under section 112(b), and dismissed the appeal.

Facts

DRI officers, acting on intelligence, intercepted Mahendra Kumar Thakker at a Delhi railway station and, after search following a section 102 notice, recovered 4 yellow metal bars and 3 biscuits weighing 4349.2 grams concealed in pockets of a sleeveless jacket worn under his shirt, along with Rs.1,08,000 in Indian currency he could not explain. The appellant admitted the metal was gold and stated he was in the jewelry business, ferrying smuggled gold from Calcutta to Delhi for one Deva and Nandu with payments arranged through Hawala at the instance of one Lucky. A jeweler appraiser certified the metal as 4350 grams of gold valued at Rs.2,17,19,632, and statements of the appellant and his nephew Param Kumar (later retracted) were recorded. A show cause notice invoking section 123 proposed confiscation of the gold, currency, packing and concealing material and penalty on the appellant under section 112(b), which the Commissioner of Customs (Preventive), New Delhi confirmed by Order-in-Original dated 28.03.2024, leading to this appeal before the CESTAT Principal Bench.

Key provisions

• Section 123, Customs Act, 1962 — Burden of proof in certain cases
• Section 102, Customs Act, 1962 — Persons to be searched may require to be taken before gazetted officer of customs or magistrate
• Section 108, Customs Act, 1962 — Power to summon persons to give evidence and produce documents
• Section 112(b), Customs Act, 1962 — Penalty for improper importation of goods
• Section 150, Customs Act, 1962 — Procedure for sale of goods and application of sale proceeds
• Section 110, Customs Act, 1962 — Seizure of goods, documents and things