Clandestine Gold Transport & High Purity Satisfy “Reasonable Belief” Under Customs Act: Calcutta High Court

The Calcutta High Court on 31 March restored the adjudicating authority's confiscation of 1,999.90 grams of gold, holding that clandestine transport and high scientific purity of bullion establish a “reasonable belief” of smuggling under the Customs Act.

A Division Bench of Justices Rajarshi Bharadwaj and Uday Kumar allowed the Commissioner of Customs (Preventive), Kolkata's appeals, reinstated the confiscation and penalties, and set aside the Tribunal's order that had granted relief to the respondents, Anil Kumar Soni, owner of A.R.P. Ornaments, and Anil Kumar Gaur, the carrier.

The Court observed:

“A legitimate commercial transaction of such magnitude is not transported secreted in a waist belt, nor does it lack the requisite industrial nomenclature of refinery documentation.”

Anil Kumar Gaur carried nearly two kilograms of gold hidden in a specially stitched waist belt at Howrah Railway Station. Gaur initially stated that the gold was of foreign origin. Anil Kumar Soni later claimed the gold came from melting scrap jewellery and produced GST records to support this claim.

The adjudicating authority ordered absolute confiscation, citing the clandestine transport and the absence of supporting refinery documents. The Commissioner (Appeals) and the Tribunal overturned the confiscation, reasoning that the absence of foreign markings and the inland seizure location prevented the formation of a “reasonable belief” of smuggling.

The High Court clarified that Section 123 of the Customs Act does not limit “reasonable belief” to seizures at borders. Hiding high-value gold in a waist belt provided sufficient grounds for belief, whether the seizure occurred at a border or inland.

Scientific evidence further supported confiscation. The seized gold had a fineness of 99.5–99.6%, consistent with international bullion standards and inconsistent with locally melted jewellery. Anil Kumar Soni failed to produce any refinery records or melting certificates to explain this purity.

The Court concluded that a legitimate trader would neither transport high-value bullion in a concealed waist belt nor lack essential refinery documentation. The combination of international-standard purity, absence of payment records, and missing refinery documentation showed that the respondents, Soni and Gaur, failed to discharge their statutory burden.

The Court also held that the Tribunal's characterisation of these discrepancies as mere “technical mistakes” was perverse and unsustainable.

Accordingly, the High Court restored the adjudicating authority's order of absolute confiscation and penalties.