Order date – 31 October 2022

 Facts –

• The Appellant, Shri Rajesh Kumar, was working in the bullion market as a broker in Kucha Mahajni, Chandani Chowk, Delhi. He was mainly selling gold/ bullion received on consignment basis from the consignor, for commission, which was Rs.500/- to Rs.1000/- per kg.
• During a search conducted by the Directorate of Revenue intelligence in the shops of the appellant, 20.643 kgs. of gold of foreign origin, having total market value of Rs.6,46,57,189/- was recovered also currency of total face value of Rs.6,44,00,000/- was found.
• The appellant informed that this was sale proceeds of smuggled gold sold on that day and also sold during previous week. On a reasonable belief that the recovered gold was smuggled into India and that the said cash amount was sale proceeds of smuggled gold, the same appeared to be liable for confiscation under Section 111 of the Customs Act, 1962. Officers of DRI seized the same under the provisions of section 110 of the Act vide panchnama dated 14.10.2016.
• Aggrieved appellant had filed an appeal

Issue – 

• Whether the confiscation of smuggled gold is in order?

Order – 

• The Tribunal observed from the submission made by the appellant that he has received gold for sale from Sh. Amit Goel through his employee Sh. Pankaj Kumar Singh who has come to his shop along with Sh. Santosh Kumar. The gold was actually in possession of Sh. Pankaj Kumar Singh who was present in the shop at the time of investigation
• Further, it is found that investigation does not adduce any evidence to arrive at a definite conclusion, if the gold was smuggled or not. Penalty under Section 112(b) requires mens rea to be established i.e. conscious knowledge of the appellant that he was dealing in smuggled gold. This fact is not coming out from the evidence on record. Admittedly, it is a case of town seizure and not a seizure (or near) in customs area or in the vicinity of international border. Thus, the suspicion of Revenue that the gold is smuggled does not lead to inevitable evidence that the gold is smuggled. Admittedly, the seized gold was of 99.5% purity, whereas normally the smuggled gold is of 99.9% purity.
• It was held that simply possession of foreign marking gold without a bill does not lead to the conclusion that it is smuggled. It has been so held by this Tribunal in the case of Nand Kishore Modi vs. CC (Prev.), West Bengal -2015 (325) ELT 781 (Tri Kolkata).
• Hence, the Tribunal hold that the appellant has not violated any of the provisions of Section 111 as alleged.