Multiple tribunals have set aside gold confiscations due to lack of proof of foreign origin or smuggling. The decisions affirm strict evidentiary standards under customs law.
Gold Confiscation Invalid Without Proof of Foreign Origin
In a series of rulings, CESTAT benches at Kolkata and Hyderabad, along with the Patna High Court, have set aside orders confiscating gold where authorities failed to establish foreign origin or reasonable belief of smuggling. The decisions collectively reinforce that mere possession is insufficient for confiscation under Section 111(m) of the Customs Act, 1962.
One case involved 3.15 kg of gold seized at the airport. CESTAT Kolkata held that absence of foreign markings and failure to prove importation violated Indian customs jurisdiction. Similarly, CESTAT Hyderabad quashed a confiscation for lack of "reasonable belief" despite suspicion. The Patna HC struck down seizure of areca nuts, drawing an analogy:
"Suspicion, however strong, cannot replace legally admissible evidence."
These judgments emphasize the distinction between "suspicion" and "reasonable belief" — a principle now affirmed by the Supreme Court. Authorities must record contemporaneous reasons and evidence before seizure. Practitioners should challenge confiscations lacking documented intelligence or forensic verification.
Citations
- Gautam Gems v. Commissioner of Customs (2026) CESTAT Kolkata
- V. Lakshmi v. Union of India (2026) CESTAT Hyderabad
- State of Bihar v. Rajesh Kumar (2026) Patna HC
