CESTAT Quashes Penalties in Alleged Gold Smuggling Case Due to Lack of Evidence and Standard Purity

The Kolkata Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has quashed penalties imposed in an alleged gold smuggling case, citing the absence of foreign markings and the purity of the seized gold being below the standard associated with foreign origin. The appellants were penalized under Section 112(b)(i) of the Customs Act, 1962, after the Directorate of Revenue Intelligence (DRI) intercepted a truck in Guwahati carrying 40 gold bars weighing 6.6 kg. The tribunal observed that apart from retracted statements, there was no corroborative evidence against the appellants. It further noted that the seized gold had no foreign markings, and its purity was in the range of 995-996 mille, rather than the 999.9 mille associated with foreign origin. In such circumstances, the tribunal explained that the burden under Section 123 did not shift to the appellants since they had not claimed ownership of the gold. The tribunal pointed out that suspicion alone could not substitute for evidence of smuggling, and without proof of foreign origin, penalties under Section 112(b)(i) were not sustainable.