2026-VIL-1693-CESTAT-KOL-CU
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CUSTOMS CESTAT Cases

Customs – Validity of seizure of gold under Section 110(1) of the Customs Act, 1962 – Reasonable belief – Gold biscuits were seized by the Government Railway Police Service from a person travelling by train on information that he was carrying smuggled gold, and were later handed over to the Customs Officers, who prepared the seizure inventory under Section 110 - Seizure list did not indicate any foreign marking on the gold and the samples were not sent to the Customs Revenue Control Laboratory - Adjudicating authority absolutely confiscated the gold under Sections 111(b) and 111(d) and imposed penalties under Section 112(a) and (b) - Whether the seizure of the gold was based on a "reasonable belief" as required under Section 110(1) - HELD - The gold was seized by the personnel of the Railway Police and later handed over to Customs, and the Customs Officer did not act on his independent belief but merely accepted the seizure done by another agency. The authority effecting the seizure must demonstrate a subjective satisfaction based on objective material, failing which the seizure is invalid. The seizure inventory failed to disclose any material evidence justifying a reasonable belief, there being no foreign marking on the gold, and the marking on one item does not indicate that the gold is of foreign origin. Mere finding of gold does not render it liable for seizure unless there is cogent and positive evidence proving its foreign origin, and mere suspicion is not sufficient. The recovery solely on suspicion and acceptance of the presumption created by the other agency without independent verification or due diligence renders the seizure arbitrary and legally unsustainable - There was no reasonable belief for seizure under Section 110(1) and the gold cannot be held liable for confiscation - The impugned order is set aside and the appeals are allowed - Customs – Burden of proof under Section 123 of the Customs Act, 1962 – Confiscation and penalty – Appellant claimed ownership of the seized gold and produced purchase invoices for gold ornaments bought from a finance company, which were melted into gold pieces, along with bank statement and income tax return, and the invoices were not disputed by the Revenue - Whether the Appellant discharged the burden under Section 123 and whether the gold is liable for confiscation and the Appellants are liable to penalty under Section 112 - HELD - The documents produced by the Appellant, which were not discarded by the Revenue, are admissible as evidence. The Appellant discharged the burden cast on him under Section 123, and the onus then shifted to the Revenue to prove that the gold in question is smuggled, which the Revenue failed to do. As the gold is not liable for confiscation, it is to be released to the Appellant and no penalties are imposable on the Appellants - The impugned order is set aside and the appeals are allowed
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