CESTAT sets aside confiscation of city jeweller’s Rs 19L gold | Hyderabad News

Hyderabad: A Hyderabad jeweller has won relief from the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), which ruled that the absence of purchase invoices accompanying a domestic courier consignment cannot, by itself, be treated as proof of smuggling or illegal import of gold. The tribunal set aside the absolute confiscation of 377 grams of gold worth Rs 19 lakh and quashed the penalty imposed by customs authorities.In its Oct 29 order, judicial member Angad Prasad overturned the absolute confiscation of the gold and the Rs 3.8 lakh penalty imposed on Mohammed Abdul Razzak, proprietor of Iqbal Jewellers, Red Hills.The case dates to Oct 3, 2020, when customs officials, acting on intelligence, intercepted domestic cargo consignments at Rajiv Gandhi International Airport. The customs department alleged that the gold was of foreign origin and had entered the country without payment of customs duty.Razzak, however, contended that the gold was sourced locally. He said he had purchased old jewellery from customers and got it melted through Sachin gold testing laboratory in Hyderabad. According to him, the gold was being sent to Parshva Jewellers in Mumbai through a domestic courier as Covid-19 restrictions had disrupted regular business operations.The tribunal noted that the seized gold bore no foreign markings and, significantly, that even a govt-approved assayer could not establish whether the gold was of Indian or foreign origin.Customs argued that Razzak had failed to produce contemporaneous purchase records, melting challans, stock registers and transportation documents. The department also cast doubt on a laboratory certificate issued in Dec 2024, nearly four years after the seizure.While observing that the delayed certificate warranted closer examination, the bench held that it could not be rejected outright as fabricated. It further noted that the department had not undertaken independent verification involving either the Mumbai recipient or the Hyderabad laboratory.Examining the provisions of Section 123 of the Customs Act, the tribunal held that the burden of proving lawful possession shifts to the owner only when authorities first establish a reasonable basis to believe that the goods were smuggled.The bench also rejected the assumption that melting gold necessarily indicated an attempt to erase foreign markings. It found that customs had failed to establish the essential ingredients required for confiscation under Sections 111(d), 111(i) and 111(j) of the Act, or to justify penal action under Section 112.The matter had earlier been remanded by the tribunal in Oct 2024 for fresh adjudication. However, after customs again ordered confiscation, the dispute returned to CESTAT.Setting aside the Nov 2025 appellate order as well as the confiscation and penalty proceedings, the tribunal allowed Razzak’s appeal and granted consequential relief in accordance with law.