Foreign Markings On Gold Biscuits Not Enough To Prove Smuggling: CESTAT Kolkata Sets Aside Confiscation

The Kolkata Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that the foreign markings available on the gold biscuits are not sufficient to establish the smuggled nature of the gold. R. Muralidhar (Judicial Member) and K. Anpazhakan (Technical Member) opined that the gold recovered from the assessee was neither established to be of foreign origin nor established to be smuggled in contravention of the provisions of the Customs Act, 1962. Thus, the gold recovered from the assessee is not liable for confiscation. In the case at hand, 20 gold biscuits have been seized from the assessee/Appellant while he was travelling in a train. As the gold biscuits had foreign markings and the assessee did not have any documents for the licit purchase of the gold, the said gold biscuits were seized under Section 110 of the Customs Act, 1962, on the reasonable belief that the said gold was liable to confiscation. The assessee submitted that the gold was seized in the midst of the town of Kolkata, where gold with foreign markings is freely available in the market. The gold was seized far away from the Bangladesh Border. The seizure was not affected at the airport or seaport, and the person in possession of the gold was not intercepted in any port while arriving from abroad. The assessee argued that the department did not prove that the gold was imported from Bangladesh in contravention of the provisions violating the conditions prescribed for the importation of gold. The issues before the bench were: Whether the seizure of the gold was based on a 'reasonable belief' as required under Section 110(1) of the Customs Act, 1962 or not. Whether the foreign markings available on the gold biscuits are sufficient to establish the smuggled nature of the gold and, consequently liable for confiscation. The bench observed that there is no reasonable belief existing in this case for seizure of the gold in question under Section 110 of the Customs Act, 1962. In the absence of any cogent evidence establishing the smuggled character of the gold, the assessee/ appellant cannot be held liable for abetting any offence under the Customs Act, 1962, stated the Tribunal. The bench opined that the foreign markings available on the gold biscuits are not sufficient to establish the smuggled nature of the gold. The Tribunal opined that the gold in question cannot be construed to be of foreign origin and/or smuggled in nature. The bench held that the 20 pieces of gold seized in this case are not liable for confiscation under Section 111(b) and (d) of the Customs Act, 1962, in the absence of any cogent and corroborative evidence to substantiate the allegation of smuggling. The Tribunal set aside the order of confiscation of the seized gold in the impugned order under Section 111(b) and (d) of the Act. The bench further held that if the gold has already been disposed of, then the value of the seized gold in question shall be refunded to the assessee at the average market price prevailing on the date of its disposal, as approved by the Joint Pricing Committee, along with interest at the applicable rate, from the date of disposal till the date of actual refund. In view of the above, the Tribunal allowed the appeal. Case Title: M/s. Narru Guru Shantha Siva Kamal v. Commissioner of Customs (Appeals) Case Number: Customs Appeal No. 76453 of 2025 Counsel for Appellant/ Assessee: P.S. Sastry, Consultant Counsel for Respondent/ Department: Ashwini Kr. Choudhary Click Here To Read/Download Order

Foreign Markings On Gold Biscuits Not Enough To Prove Smuggling: CESTAT Kolkata Sets Aside Confiscation

Mehak Dhiman

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