High Court to Examine Presumptions under Customs Act, Adjudication Proceedings, and Burden of Proof in Gold Confiscation
The Delhi High Court has admitted a series of appeals filed by the Principal Commissioner of Customs (Preventive) against the order of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT). The court has framed several substantial questions of law concerning the Customs Act, 1962, which will be pivotal in determining the outcome of these cases.
The appeals were filed following a decision by CESTAT which, according to the Revenue, misinterpreted crucial sections of the Customs Act, particularly Sections 123 and 138B. These sections pertain to the presumption regarding smuggled goods and the admissibility of statements in adjudication proceedings, respectively.
In the proceedings presided over by Justices Avneesh Jhingan and Shail Jain, the court highlighted three main legal issues for consideration. The first pertains to whether the mandatory presumption under Section 123 of the Customs Act extends beyond individuals in physical possession of smuggled goods to include masterminds or financiers who exercise control through employees. This question addresses the broader interpretation of "possession" under the Act, which could significantly impact cases involving intricate smuggling operations.
The second question revolves around Section 138B, focusing on whether CESTAT correctly held that every witness whose statement was recorded under Section 108 must be examined before the adjudicating authority. This issue is particularly crucial given a recent judgment in Sushil Aggarwal v. Principal Commissioner of Customs, which clarified the limitations on the right of cross-examination under Section 138B.
The third question addresses the confiscation of gold jewellery allegedly manufactured from smuggled gold. The court seeks to determine whether the burden of proof lies with the Revenue department to establish that the jewellery was indeed made from smuggled gold.
In addition to these legal questions, the court also addressed procedural aspects, allowing applications for condonation of delay in re-filing the appeals, which had previously been delayed.
The case has been scheduled for a hearing on January 28, 2027, during which these substantial questions of law will be examined in detail. The outcome of this case could have far-reaching implications for the interpretation and enforcement of the Customs Act, particularly in cases involving complex smuggling networks.
Bottom Line :
Customs Act - Appeals admitted - Substantial questions of law framed on scope of presumption under Section 123, applicability of Section 138B in adjudication proceedings, and confiscation of gold jewellery allegedly manufactured from smuggled gold.
Statutory provision(s): Customs Act, 1962 Sections 123, 138B
