CESTAT Upholds Absolute Confiscation of Gold Concealed in Paste Form; Crossing Green Channel Shows Clear Smuggling Intent

March 18, 2026 : The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has upheld absolute confiscation of 844 grams of gold and penalty, ruling that concealment of gold in paste form on the body coupled with crossing the green channel clearly establishes intent to smuggle under the Customs Act, 1962.

In Shri Senthil Kumar Anbalagan v. Commissioner of Customs, Hyderabad, the Tribunal dismissed the appeal and affirmed confiscation of gold valued at ₹34.68 lakh along with a penalty of ₹3.5 lakh.

Key Facts

The appellant arrived from Singapore at Rajiv Gandhi International Airport on 15.02.2020 and was intercepted by CISF officials after crossing the green channel. On inspection, four polythene-wrapped packets containing gold paste were found concealed in his socks and undergarments.

Subsequent processing of the paste yielded 24-carat gold bars weighing 844 grams. The appellant admitted in his statement under Section 108 of the Customs Act that he intended to smuggle the gold into India for profit.

Tribunal’s Findings

The Tribunal rejected all procedural and substantive challenges raised by the appellant and upheld the confiscation and penalty on the following grounds:

• Green Channel Equals Declaration:
  Crossing the green channel amounts to a declaration that the passenger is not carrying dutiable goods. Non-declaration, coupled with concealment, indicates deliberate evasion and mens rea.
• Concealment Establishes Smuggling Intent:
  Concealing gold in paste form on the body was recognised as a common modus operandi to evade detection, clearly evidencing intent to smuggle.
• Jurisdiction Not Limited by Exact Interception Point:
  The Tribunal held that liability under the Customs Act arises once a passenger arrives from abroad with undeclared goods, regardless of whether interception occurred strictly within the customs area.
• Gold Paste Argument Rejected:
  The plea that the seized material was only “gold paste” was dismissed since it was processed and confirmed to be gold weighing 844 grams, establishing the identity of the goods.
• Denial of Cross-Examination Not Fatal:
  The Tribunal observed that the case was based on physical recovery and corroborative evidence, not merely on witness statements. Hence, denial of cross-examination did not cause prejudice.

Burden of Proof Under Section 123

The Tribunal emphasised that gold is a notified item under Section 123 of the Customs Act. Once possession is established, the burden shifts to the person concerned to prove lawful acquisition.

In this case, the appellant failed to produce any documentary evidence to establish licit origin. The Tribunal held that the statutory presumption of smuggling remained unrebutted.

Conclusion

Finding no infirmity in the impugned order, the Tribunal held that concealment, non-declaration, and failure to discharge the burden of proof conclusively established smuggling. The appeal was accordingly dismissed, and both absolute confiscation and penalty were upheld.