In two Revenue appeals, CESTAT Allahabad upheld orders setting aside confiscation of gold seized away from the border, holding that retracted statements alone cannot prove smuggling and Section 123 presumption does not apply.

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Allahabad, has dismissed two Revenue appeals. In both, the Commissioner (Appeals) had set aside confiscation of gold under the Customs Act, 1962 because the Department offered no evidence beyond statements that the unmarked gold, seized away from any border or customs area, was of foreign origin [Commissioner of Customs (Preventive) Lucknow v. Balbir Singh & Ors., 2026-juristway.com-3336-CESTAT(Allahabad)-Customs; Commissioner of Customs (Preventive), Lucknow v. Girish Agarwal & Ors., 2026-juristway.com-3342-CESTAT(Allahabad)-Customs].

Both appeals were heard by P.K. Choudhary, Member (Judicial), and K. Anpazhakan, Member (Technical), with the orders written by Mr. Anpazhakan.

Balbir Singh. The DRI apprehended Balbir Singh at Varanasi on 9 Nov 2022 with seven pieces of gold weighing 1791.030 grams, valued at ₹93,13,356. The owner of a Varanasi jewellery shop claimed the gold and produced purchase invoices. The Tribunal found that every material particular of the invoices matched, and that the buyer had no role in how the seller printed them. The absence of stock during a later search was no evidence of smuggling, since business stocks fluctuate daily.

Girish Agarwal. The DRI apprehended Vikas Agarwal on a train on 10 Jan 2023 with gold weighing 1999.640 grams in a waist belt. His statement implicated relatives in Kanpur, but searches of their premises found nothing. The Tribunal held that the retracted statements were general and gave no detail of the border crossing, carriers, transport or finance. It followed Balwant Raj Soni & ors. v. Commissioner of Cus. (Prev.), Patna (Final Order Nos. 75455-75457 of 2023), which held that statements of co-accused need independent corroboration.

In both cases the Tribunal held that, with no seizure at the border or in a notified area and no foreign markings, there was no reasonable belief to invoke Section 123. The burden to prove foreign origin and smuggled character stayed with the Department, and presumption is no substitute for evidence. With confiscation failing and no evidence implicating the respondents, the penalties fell too.

The Revenue’s appeals were rejected in both matters.

2026-juristway.com-3336-CESTAT(Allahabad)-Customs | 2026-juristway.com-3342-CESTAT(Allahabad)-Customs