2026-VIL-1077-CESTAT-KOL-CU
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CUSTOMS CESTAT Cases

Customs - Confiscation of gold bars seized during inter-state transit and imposition of penalties - Whether gold bars that are duty paid, have GST compliance, and are supported by purchase invoices, stock registers, job work challans and banking records can be confiscated as smuggled goods, particularly when the purity matches legitimate procurement documents and no foreign origin marking exists on the gold – HELD - The appellants have successfully discharged their onus under Section 123 of the Customs Act, 1962 by producing comprehensive documentary evidence including purchase invoices, GST returns, purchase registers, job work challans and banking transaction details corroborating lawful procurement and movement of the gold. The purity of gold at 99.6% as per test report aligns with the documented purity of 99.5% in tax invoices and cannot by itself be treated as valid ground to reject the claim of lawful procurement. The gold bears no foreign origin marking and constitutes a town seizure with full GST compliance and accounting records. The duty paid nature of the gold combined with GST filing and proper documentation establishes it is not of foreign origin or smuggled. The adjudicating authority erred in discarding the documentary evidence produced by the appellants without proper consideration. No penalties can be imposed once confiscation is not justified - The impugned order of confiscation is set aside and the authorities are directed to release the gold to the appellants – The appeals are allowed
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