Crossing Green Channel With Gold Hidden In Paste Form Shows Intent To Smuggle: CESTAT Hyderabad

The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that a passenger's concealment of gold in paste form on the body and crossing the green channel at an international airport clearly establishes intent to smuggle, justifying absolute confiscation and penalty under the Customs Act, 1962.

A single-member bench of Judicial Member Angad Prasad observed that concealment and non-declaration after opting for the green channel show deliberate evasion: "Once the passenger arrives from the foreign country and carries goods liable for declaration, the liability under the Customs Act arises regardless of the precise point of interception. The concealment of gold in paste form is a common modus operandi adapted to evade detection, and such conduct clearly establishes intention to smuggle."

The case arose when the appellant arrived from Singapore at Hyderabad airport on 15.02.2020 and was intercepted by CISF officials after passing through the green channel.

Upon suspicion, four packets containing gold in paste form were found concealed in his socks and undergarments. The appellant admitted to smuggling the gold for profit.

The Customs authorities seized the gold and initiated proceedings, culminating in absolute confiscation and penalty.

The appellant challenged the action on grounds of lack of jurisdiction, illegal interception outside the customs area, denial of cross-examination, and failure to establish that the seized material was smuggled gold.

It was further submitted that what was allegedly recovered was gold paste and not primary gold, and the same was subsequently processed chemically to obtain gold bars. Thus, the goods seized were not identified or established as smuggled gold.

The department alleged that the appellant's deliberate concealment of gold in his socks and undergarments and non-declaration within such a secured area clearly establishes conscious and intentional smuggling and means rea of the appellant.

The Tribunal rejected all contentions of the appellant and held that concealment of gold in paste form on the body and passing through the green channel clearly established intent to smuggle and evade customs duty.

The bench stated that "the entire proceedings against the appellant are based on un-retracted statement of the witnesses, corroborative evidence in the form of recovery material. Therefore, no any prejudice caused to the appellant......The plea that the recovered substance were initially gold in paste form also does not help the appellant. The material was processed and confirms to contain gold weighing 844 grams, which clearly establishes the nature of the goods."

It observed that once a passenger opts for the green channel, it amounts to a declaration of not carrying dutiable goods, and any concealment thereafter justifies confiscation and penalty.

On the issue of cross-examination, the Tribunal ruled that the case was based on physical recovery and corroborative evidence, not merely on statements. Therefore, denial of cross-examination did not violate principles of natural justice, especially in the absence of any demonstrated prejudice.

Further, the tribunal emphasized that gold is a notified item under Section 123 of the Customs Act, shifting the burden on the appellant to prove lawful possession. In the absence of any documentary evidence to establish licit origin, the presumption of smuggling remained unrebutted.

The bench observed "In terms of Section 123 of the Customs Act, 1962, the burden of proof squarely lies upon the person from whose possession such notified goods are seized. The appellant has failed to discharge this statutory burden by producing any cogent, credible or documentary evidence to establish the licit origin of the seized gold. Accordingly, the presumption of smuggling remains un-rebutted."

Accordingly, the tribunal found no infirmity in the impugned order and dismissed the appeal, affirming confiscation and penalty.

For Appellant: R. Narasimha Murthy, Consultant

For Respondent: B. Subhas Chandra Bose, Authorized Representative