Commissioner of Customs (Preventive) Lucknow Vs Rajesh Kumar (Allahabad High Court)
The Allahabad High Court allowed the revenue’s appeal and set aside the CESTAT order after finding that the Tribunal failed to properly examine a material change in the respondent’s stand and relied on documents produced for the first time at the appellate stage. The Court noted that before the adjudicating authority and the Commissioner (Appeals), the respondent had denied ownership of the seized gold, but before the Tribunal, he claimed ownership by filing new documents such as invoices and a family settlement. The Tribunal neither adequately addressed this contradictory stance nor gave the revenue a meaningful opportunity to rebut the newly produced evidence. Holding that the Tribunal’s findings were perverse and based on extraneous material, the High Court quashed the impugned order. The matter was remanded to the Tribunal for a de novo hearing, with directions to allow both sides to explain and rebut the changed stand and to decide the case expeditiously.
Counsel for Appellant(s) : Dheeraj Srivastava, Anindya Shastri
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. Heard learned counsel appearing on behalf of the parties.
2. The present appeal has been filed under Section 130 of the Customs Act, 1962, wherein the following substantial questions of law have been raised by the revenue:-
“a. Whether the Hon’ble CESTAT was justified in relying upon new documentary evidences (invoices and family settlement), not presented before by the Respondent at the time of adjudication and first appellate level (Commissioner (Appeals)), which is in contravention of the settled legal principles laid down by Supreme Court in Commissioner of Cus. & C. Ex., Goa Vs. Dempo Engineering Works Ltd. (2015 (319) E.L.T. 359 (S.C.)) and Sanghvi Reconditioners Pvt. Ltd. Vs. Union of India (2010 (251) E.L.T. 3 (S.C.)?
b. Whether CESTAT has erred in not placing reliance upon the statement recorded under Section 108, which is a substantive piece of evidence in view of the decision of Hon’ble Supreme Court in Naresh J. Sukhwani Vs Union of India in SLP (C) No. 23708 of 1995, decided on 06.11.1995 reported in 1996 (83) E.L.T 258 (S.C)?
c. Whether applying the precedent in Neeraj Agarwal (17.04.2024) (Tribunal) by relying solely on gold purity levels below 99.9% to conclude the gold was not of foreign origin and ignoring the admission of tampering to conceal foreign markings and specific intelligence of smuggling, thereby holding that the seized gold is not smuggled goods under Section 2(39) and therefore confiscation under Section 111 of the Customs Act, 1962 is not tenable?
d. Whether the Hon’ble CESTAT erred in law by setting aside the confiscation of ₹1,01,25,600 as proceeds of smuggled goods under Section 121 of the Customs Act, 1962, despite Respondent admission and corroborative evidence from carriers statements, and without completely appreciating its lawful source under the Customs Act?
e. Whether the CESTAT is justified in setting aside the confiscation of (a) the seized gold, (b) Indian currency which is admitted to be sale proceeds and (c) setting aside the imposition of penalty of Rs 20,00,000/- by holding that the seized goods is not a smuggled goods as the burden of proof as provided under Section 123 of the Customs Act, 1962 has been discharged by the Respondent is contrary to provisions of the Customs Act?
f. Whether the CESTAT was justified in releasing the seized gold to the Respondent, which was claimed by the Respondent before the Tribunal for the first time and not claimed at time of adjudication and Commissioner (Appeals) level?
g. Whether the Hon’ble CESTAT’s decision to set aside confiscation on the basis of not providing an fine option under Section 125 of the Customs Act, 1962, despite the adjudicating authority’s finding of absolute confiscation based on smuggling, involves misinterpretation of statutory provisions and appellate powers?”
3. Shri Dheeraj Srivastava, learned Senior Standing Counsel appearing on behalf of the Customs has stated that the respondent herein for the first time had placed certain documents claiming ownership of the gold before the Tribunal. He further submits that these documents have not been produced either before the adjudicating authority or before the Commissioner (Appeals).
