The CESTAT ruled that ownership of seized gold is established through GST documents, disallowing confiscation. Burden under Section 123 of the Customs Act was deemed fulfilled by the importer, making confiscation unsustainable.
Key Ruling on Gold Confiscation
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has delivered an important ruling regarding the confiscation of gold, stating that gold cannot be confiscated when the importer provides sufficient documentation to prove lawful ownership. In this case, the Tribunal highlighted that purchase invoices, GST returns, stock registers, and job work challans established ownership, therefore deeming the confiscation and penalties invalid.
The Tribunal found that the burden of proof under Section 123 of the Customs Act was effectively discharged by the importer, as the documentation provided was comprehensive enough to establish legal possession of the gold. The relevance of maintaining meticulous records in GST registries was underscored, as it plays a crucial role in such legal disputes.
This ruling underscores the importance of proper documentation for importers and establishes a precedent for how ownership in such circumstances will be interpreted under customs law. When challenged about ownership, importers with clear and sufficient documentation may now have stronger defenses against confiscation.
Citations
- CESTAT Order (2026) Vol. 1 Reporter 123
