Customs - Gold bars recovered from a domestic passenger at the airport - Can not be confiscated.
CESTAT Kolkata Quashes Confiscation of Gold Bars, Upholds Domestic Procurement Evidence. Tribunal Rules Absence of Smuggling Evidence Makes Seizure Unsustainable
News Report: In a significant ruling, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) Kolkata has overturned the confiscation of seven gold bars from Sunil Saraogi, a domestic passenger at NSCBI Airport, Kolkata. The tribunal, presided over by Member (Technical) Shri K. Anpazhakan, found the seizure and subsequent confiscation legally unsustainable due to the absence of reasonable belief or evidence of smuggling.
The case involved Sunil Saraogi, who was travelling domestically with seven gold bars and silver granules. The CISF personnel intercepted the gold at the domestic departure terminal, suspecting smuggling, and handed it to Customs officials. However, Saraogi argued that as a domestic passenger, he was not obligated to declare the gold, unlike international travelers. He further presented documentary evidence proving the gold's domestic origin, acquired by melting old jewelry.
The tribunal criticized the Customs officials for not forming an independent reasonable belief regarding the gold's foreign origin, relying solely on CISF's suspicion. The tribunal highlighted the lack of objective material to substantiate the smuggling allegations, rendering the seizure arbitrary.
Saraogi provided comprehensive documentation supporting his claim of domestic procurement, including receipts from M/s Rabindra Nath Panja & Co., a gold refiner in Kolkata. The tribunal acknowledged the genuineness of these documents and the refiner's confirmation of melting old jewelry into gold bars.
Importantly, the tribunal noted the chemical test results indicating the gold's purity was not consistent with typical smuggled gold, further questioning the smuggling allegations. The tribunal referred to precedents emphasizing that mere suspicion or foreign markings do not suffice to establish smuggling without substantive evidence.
This ruling underscores the necessity for Customs officials to exercise due diligence and form an independent, reasonable belief based on objective material before seizing goods. The tribunal's decision sets a precedent for similar cases, reinforcing the legal framework governing domestic passengers' rights.
Bottom Line:
Confiscation of gold bars recovered from a domestic passenger at the airport - Absence of reasonable belief or evidence of smuggling renders the seizure and confiscation arbitrary and legally unsustainable.
Statutory provision(s): Customs Act, 1962 Sections 110(1), 123, 111(d), 112(a), 112(b)
