CESTAT Kolkata set aside the confiscation of 3.15 kg of gold, ruling that the absence of foreign markings and lack of evidence of smuggling vitiated the action. Authorities must prove foreign origin for confiscation.
CESTAT Sets Aside Gold Confiscation Without Proof of Origin
The Customs, Excise and Services Tax Appellate Tribunal (CESTAT), Kolkata, quashed the confiscation of 3.15 kg of gold seized from an individual, holding that the Department failed to establish its foreign origin. The ruling clarifies that mere possession of gold, even in substantial quantity, does not automatically attract confiscation under Section 111(m) of the Customs Act, 1962.
The Department had relied on the absence of hallmarking and the quantity of gold to allege smuggling. However, the Tribunal found no evidence — such as travel history, foreign purchase receipts, or non-declaration at customs — to substantiate the claim. It stressed that the burden of proof lies on the Department and cannot be shifted to the accused to prove lawful possession.
"The confiscation under Section 111(m) must be predicated on positive material showing the goods to be of foreign origin. Mere suspicion or conjecture is insufficient,"
the Tribunal held. This decision reinforces previous rulings that the nature of gold as a commonly traded domestic commodity necessitates robust evidence before treating it as smuggled. Practitioners should challenge confiscations where the Department fails to discharge its evidentiary burden, particularly in cases involving domestically procured gold.
Citations
- Customs Act, 1962, Section 111(m)
