Case Details: Rajan Kumar Sahani vs. Commissioner of Customs (Preventive), Lucknow (2026) 38 Centax 314 (Tri.-All)
Judiciary and Counsel Details
- S/Shri P.K. Choudhary, Member (J) & P. Anjani Kumar, Member (T)
- Shri Vineet Kumar Singh, Adv., for the Appellant.
- Shri A.K. Choudhary, Authorized Representative, for the Respondent.
Facts of the Case
The assessee was a bullion trader based at Gorakhpur. Gold carried by its employees while travelling to Delhi was intercepted and seized by the Department. The seized gold was covered by vouchers issued by the trader. The Central Revenue Control Laboratory (CRCL) reported varying purity levels in the seized gold, which were below 99.99%. Investigation showed that the trader had purchased gold from registered bullion traders through banking channels. Certain bullion traders in Delhi and Lucknow stated that they had ordered gold from the Gorakhpur trader but disputed the signatures on sale invoices produced by the trader and furnished copies of invoices issued by them. The employees made general statements alleging that the gold was smuggled, without stating how or by whom it was smuggled, the border crossed, or the mode of transport and finance, and such statements were later retracted. There were no foreign markings on the gold, no call records showing contact with any person abroad, and no material establishing from where or how the gold had entered India. The adjudicating authority held the gold to be smuggled, relying on the retracted statements. The matter was accordingly placed before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT).
CESTAT Held
The CESTAT held that the purity of gold alone is insufficient to determine its foreign origin or smuggled nature. It observed that the seizure took place at a location far from a Customs station, airport or seaport, that the gold bore no foreign markings, and that no evidence was gathered to establish where the gold had come from, who had smuggled it, or the manner in which it was brought into India. The Tribunal held that, in the absence of such material, the Department failed to establish a reasonable belief so as to attract Section 123 of the Customs Act, 1962, particularly when the trader had produced documents and accounts. It was further held that reliance on retracted statements recorded under Section 108, without compliance with Section 138B of the Customs Act, 1962, deprived such statements of evidentiary value, and therefore, the seizure and confiscation were unsustainable.
List of Cases Cited
- Andaman Timber Industries v. Commissioner — 2015 (324) E.L.T. 641 (S.C.) = 2017 (50) S.T.R. 93 (S.C.) — Referred [Para 8]
- Assistant Collector v. Charan Das Malhotra — 1983 (13) E.L.T. 1477 (S.C.) — Referred [Para 4]
- Balanagu Naga Venkata Reghavendra v. Commissioner — 2021 (378) E.L.T. 493 (Tribunal) — Followed [Paras 4, 17]
- Commissioner v. Ashok Kumar Agarwal — 2017 (348) E.L.T. 555 (Tribunal) — Referred [Para 6]
- Commissioner v. Golak Chandra Kamilla — 2006 (205) E.L.T. 665 (Tribunal) — Referred [Para 4]
- Commissioner v. Gopal Prasad — 2020 (371) E.L.T. 243 (Pat.) — Referred [Para 9]
- Commissioner v. Prabhash Kumar Jalan — Final Order No. 75500/2021, dated 27-8-2021 by CESTAT, Kolkata — Referred [Para 6]
- Commissioner v. Puni Dhapa Lokeswara Rao — 2009 (248) E.L.T. 141 (Cal.) — Referred [Para 5]
- Commissioner v. Saakeen Alloys Pvt. Ltd. — 2014 (308) E.L.T. 655 (Guj.) — Referred [Para 7]
- Flemingo (DFS) Pvt. Ltd. v. Commissioner — 2018 (363) E.L.T. 450 (Tribunal) — Relied on [Para 22]
- G-Tech Industries v. Union of India — 2016 (339) E.L.T. 209 (P & H) — Followed [Para 22]
- Jindal Drugs Pvt. Ltd. v. Union of India — 2016 (340) E.L.T. 67 (P & H) — Referred [Para 8]
- Kewal Krishan v. State of Punjab — 1993 (67) E.L.T. 17 (S.C.) — Referred [Para 4]
- Krishna Kumar Dhandhania v. Commissioner — 2007 (219) E.L.T. 736 (Tribunal) — Referred [Para 4]
- Mohtesham Mohd.Ismail v. Spl. Director, Enforcement Directorate — 2007 (220) E.L.T. 3 (S.C.) — Referred [Para 7]
- Mridul Agarwal v. Commissioner — 2018 (362) E.L.T. 847 (Tribunal) — Referred [Para 6]
- Nand Kishore Modi v. Commissioner — 2015 (325) E.L.T. 781 (Tribunal) — Referred [Para 6]
- Neeraj Agarwal V. Commissioner — (2024) 18 Centax 539 (Tri. – Cal.) — Referred [Para 4]
- Pr. Commissioner v. Ahamed Mujjaba Khaleefa — 2019 (366) E.L.T. 337 (Tribunal) — Relied on [Para 18]
- Purnanand Ramchandra Mishra v. Commissioner — Final Order No. 75553/2024, dated 1-3-2024 by CESTAT, Kolkata — Referred [Para 4]
- Rajesh Pawar v. Union of India — 2014 (309) E.L.T. 600 (Cal.) — Referred [Para 6]
- S.K. Chains v. Commissioner — 2001 (127) E.L.T. 415 (Tribunal) — Referred [Para 4]
- Sarvendra Kumar Mishra v. Commissioner — Final Order Nos. 70198-70199/2021, dated 6-9-2021 by CESTAT, Allahabad — Referred [Para 6]
- Sevantilal Karsondas Modi v. State of Maharashtra — 1999 (109) E.L.T. 41 (S.C.) — Referred [Para 7]
- Shaik Mohammed Sadiq v. Principal Commissioner — Writ Petition Nos. 28523 and 28548 of 2023, decided on 28-6-2024 by Telangana High Court — Referred [Para 10]
- Shantilal Mehta v. Union of India — 1983 (14) E.L.T. 1715 (Del.) — Followed [Paras 6, 14]
- Sitaram Sao v. State of Jharkhand — 2007 (12) SCC 630 — Referred [Para 6]
- Surinder Kumar Khanna v. Intelligence Officer, DRI — 2018 (362) E.L.T. 935 (S.C.) — Followed [Para 23]
- Tata Chemicals Ltd. v. Commissioner — 2015 (320) E.L.T. 45 (S.C.) — Followed [Para 16]
- Union of India v. Imtiaz Iqbal Pothiwala — 2019 (365) E.L.T. 167 (Bom.) — Followed [Paras 8, 15]
- Union of India v. Kisan Ratan Singh — 2020 (372) E.L.T. 714 (Bom.) — Referred [Para 7]
- Vinod Solanki v. Union of India — 2009 (233) E.L.T. 157 (S.C.) = 2009 (13) S.T.R. 337 (S.C.) — Referred [Paras 7, 9]
