SRI MASUD CHOWDHURY vs SHILLONG

IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,

KOLKATA

REGIONAL BENCH – COURT NO.2

Customs Appeal No. 76811 of 2025

(Arising out of Order-in-Appeal No. 345/GHY(A)/COM/CUS/SH/2025 dated
13.03.2025 passed by Commissioner of CGST, Central Excise & Customs (Appeals),
Guwahati)

Sri Masud Chowdhury,
Ward No. 2, Nabadwip Chandra Nagar,
West Tripura-799181.
Appellant
VERSUS
Commissioner of CGST, Central Excise & Customs(Appeals),
Guwahati
Guwahati-781001.
Respondent
APPERANCE :
Shri Pranab Shikdar, Advocate for the Appellant
Shri S.Debnath, Authorized Representative for the Respondent

CORAM:
HON’BLE SHRI R. MURALIDHAR, MEMBER (JUDICIAL)


FINAL ORDER NO…76563…./2026..

DATE OF HEARING : 08.10.2026
DATE OF DECISION :29.10.2026
Per R.Muralidhar :

The appellant Sri Masud Chowdhury was travelling on his motorcycle
within Sonamura town, Tripura, he was intercepted during checking by
the BSF, and Indian currency amounting to ₹9,50,000/- found in his
possession was seized. The seized currency along with the motorcycle
was thereafter handed over by the BSF to the Customs authorities for
further proceedings. A Show Cause Notice came to be issued. After due
process the lower authorities have confiscated the cash, vehicle and
imposed penalty. Hence, the appellant is before the Tribunal.

2. The Ld. Consultant, appearing for the appellant makes the following
submissions:

3. Para 1.1 of the Show cause Noticestates the BSF seizure report
describing the circumstances of seizure, read:

2


Appeal No. 76811 of 2025
Customs


On 23.09.2023 at about 17:40 hours, BSF received specific
information that an old motorcycle (red colour) was roaming near
the Sonamura town area with the suspected currency of illegal
transaction fitted in the cavity of the said bike. Acting on the said
information, at about 1800 hours, the BSF party detained one
Glamour bike bearing No. TR-07-6082, but the driver ran away,
stopping the bike towards Sonamura’s side and taking advantage
of the public and some darkness. When the BSF party searched
the detained Glamour bike in the new cover of the mudguard of
the bike and the air filter, a bundle of Indian currency was found.
The Up-Pradhan of Village N.C. Nagar was called by the BSF party
on the spot and asked for the details of the bike and its owner.
On verification from the Up-Pradhan, the owner of the said bike
was Shri Mashook Mia, S/o Kadir Mia, R/o Ward No. 04, Village
N.C. Nagar. Subsequently, the BSF party seized the goods as
detailed below.
Indian Currency : 500/-x1900= 9,50,000/-
Hero Glamour Motorcycle bearing registration no Tr-07-
6082: 01 No

4. It is submitted that this is a case of Inland seizure by BSF and not
any seizure by the Customs officials during any operation of
smuggling.The report states that the motorcycle was “roaming near the
Sonamura town area”; it does not state that the seizure was made at
the international border.

5. This report contains no allegation or fact showing that the currency
was being taken across the border or that any attempt to cross the
customs frontier was made. No border crossing point, unauthorised
route, destination, or intended export to Bangladesh is mentioned. The
information was only regarding “suspected currency of illegal
transaction”, not currency intended for export.

6. It is submitted that mere concealment is not sufficient to pin the
contravention on the appellant. Recovery of currency from the

3


Appeal No. 76811 of 2025
Customs


motorcycle's cavity may raise suspicion, but does not establish an
attempt to export.

7. The BSF report does not disclose any factual foundation for
Section 113(b); the allegation of attempted export appears to have
been subsequently inferred by the Customs authority rather than
established from the contemporaneous seizure report.

8. That Para 1.3 of the SCN itself shows that the seizure was based
merely on the allegation that the Indian currency was “meant to be
smuggled out of India through the international border.” Such an
assumption of intended smuggling, without any actual or proximate act
of attempted export, does not satisfy the statutory ingredients of
Section 113(b) of the Customs Act, 1962. The BSF report records
recovery of the currency within the Sonamura town area and does not
disclose any crossing or attempted crossing of the international border
or any act towards export. Thus, the seizure was founded on mere
presumption and suspicion, without any lawful basis for treating the
currency as goods liable to confiscation under Section 113(b).

9. That the impugned Order-in-Original is perverse, travels beyond the
BSF seizure report and the allegations contained in the SCN, and
proceeds on facts and circumstances which were never established
against the Petitioner. The Original Authority, in paragraphs 4.4, 4.4.1,
4.4.2 and 4.4.3, has sought to justify confiscation under Section 113(b)
merely on the basis that the Indian currency was concealed in the
motorcycle, that the Petitioner allegedly fled from the spot, that no
documents were available at the time of seizure, and that the place of
seizure fell within an area declared vulnerable to smuggling under
Notification No. 31/2008-Customs (N.T.).However, none of these
circumstances, individually or cumulatively, establishes the essential
ingredient of Section 113(b), namely, that the currency was actually
being brought to a place for the purpose of being exported contrary to
any prohibition/restriction under the Customs Act or any other law for
the time being in force. More importantly, the BSF seizure report does

4


Appeal No. 76811 of 2025
Customs


not record any such attempted export, while the SCN merely alleges
that the currency was “meant to be smuggled out of India.” The Original
Authority has therefore travelled beyond the foundational facts in the
seizure report and the SCN and has converted suspicion and inference
into a finding of attempted export, thereby rendering the impugned
order perverse and unsustainable in law.

10. Carrying Indian currency by itself is not prohibited under the
Customs Act 1962.

11. The Ld Consultant relies on the case law of Manir Hossain Vs CCP
Shillong – Final Order No.77412/2025 dated 15.09.2025 [Appeal
No.C/75730 of 2022] on similar issue.

12. He also relies on the case law of Sudarsan Jana Versus
Commissioner Of Customs (P), Kolkata, Final Order No.
A/75852/KOL/2016, dated 9-8-2016 on similar facts.

13. Accordingly, it is prayed that the appeal may be allowed.

14. The Ld AR appearing for the Revenue reiterates with findings of the
lower authorities. He submits that the appellant was suspiciously
moving in the border area in the Hero Honda Motorcycle. On checking
his vehicle it was found the Indian Rs.9,50,000 was concealed. Instead
of offering any explanation for carrying such a huge amount of cash,
the appellant ran away from the spot. This shows the guilty mind of the
appellant. Hence, the Ld AR justifies the impugned order.

15. Heard both the sides.

16. Admittedly, the appellant was carrying Indian Currency in the motor
cycle being driven by him. From the report given by the BSF, it is does
not come out anywhere that he was trying to cross the border, or he
was going near the border to deliver the same across the border. The

5


Appeal No. 76811 of 2025
Customs


words used „meant to be smuggled‟ are too generalized version, without
any specific recording as to who was supposed to receive the cash,
where it was to be delivered etc. So far as the appellant running away is
concerned, naturally when someone is caught with such an amount of
cash, he would be required to explain the source. This may also amount
to offence under the Income Tax Act. But in the recorded statement, he
has given his version of the source of cash. Here the issue involved is as
to whether it was actually being smuggled out of India are not. We are
not concerned with the legality of carrying the same in cash form under
any other statute. Under the Customs Act 1962, it is required to be
brought in clearly that there was an attempt to smuggle out this cash to
the other side of the border, which is not coming out anywhere in the
entire proceedings.

17. In the Interrogatory statement recorded on 15.01.2024, the
appellant has stated as under:

6


Appeal No. 76811 of 2025
Customs

7


Appeal No. 76811 of 2025
Customs




18. It is seen that in his statement, he is giving the purported source of
the cash and also has given explanation towards his keeping the same
in a concealed way. This factual detail, combined with the fact the

8


Appeal No. 76811 of 2025
Customs


Revenue has not come across any other person trying to receive the
cash from across the border, makes the case of the Revenue difficult.It
boils down to the carrying of cash only to the extent of „attempt to
smuggle‟ without any evidence to back up this claim of the Revenue.

19. Hon‟ble High Court of Meghalaya in Samir Saha Vs CCP, Shllong,
2020 (371) E.L.T. 189 (Meghalaya), has held as under:

13. On perusal of sub-section (1), it is explicit that when any goods to which
the Section applies are seized under the Act under a reasonable belief that they
were smuggled goods, the burden of establishing that they were not smuggled
goods, shall lie upon the person from whose possession the goods were seized.
Sub-section (2) has applicability insofar as gold and manufactures thereof are
concerned and to watches as well. However, the Central Government has been
empowered to extend its applicability to any other class of goods by issuance of
notification in the Official Gazette in that behalf.
14. The Indian currency seized in the present case falls outside the ambit of
Section 123 of the Act not being a notified item. However, by virtue of Section
121 of the Act, it is still liable to be confiscated provided it is as a result of sale
proceeds of smuggled goods. In such a situation, the presumption contained in
Section 123 of the Act would not be available to the Revenue which can be
relied upon. Even though the provisions of the Evidence Act, 1872 (In short, the
1872 Act) are not applicable to proceedings under the Act, yet the broad
principles and rule of evidence contained in Section 101 of the 1872 Act
regarding ‘Burden of proof’ would place the initial burden on the Department to
establish by producing material evidence that the Indian currency or the asset
sought to be confiscated was a result of sale proceeds of smuggled goods. In
other words, as per law governing onus to prove, it would lie on the Revenue to
establish by producing cogent, material and convincing evidence that the Indian
currency in possession of a person is on account of sale proceeds of smuggled
goods and thus, liable to confiscation under Section 121 of the Act.
15. The question that requires determination in this appeal is whether the
appellant from whose possession Indian currency amounting to 18,23,100/- was
seized was as a result of sale proceeds of smuggled goods.
16. It was incumbent upon the Revenue to have proved that the possession of
Indian currency amounting to 18,23,100/- with the appellant was as a result of
sale proceeds of smuggled goods. The Department has sought to proceed on
the assumption that ordinarily, when Bangladeshi taka 3,32,335/- valued at
12,32,635/- was seized from the appellant, a normal inference would be to

9


Appeal No. 76811 of 2025
Customs


presume that the possession of Indian currency of 18,23,100/- was as a result
of sale proceeds of some smuggled goods or on account of dealings in
Bangladeshi currency.
17. However, the law nowhere envisages or raises any presumption in favour
of the Department. The Revenue was required to produce material to have a
reasonable belief that the Indian currency was on account of sale proceeds of
smuggled goods. The Revenue respondent has not placed any material to
substantiate that the seized amount of 18,23,100/- was on account of sale
proceeds of any smuggled goods except to plead that inference ought to have
been drawn against the appellant as there was admission on his part. The
burden on the Revenue was required to be discharged by cogent
material/evidence.
22. In the present case, the appellant from whose possession cash of
18,23,100/- was seized had by preponderance of evidence shown that partly
the amount was for the purpose of discharging the loan which was taken by him
from his father-in-law.
23. In the absence of any material to substantiate the allegation of the
Revenue, the Additional Commissioner of Customs (Preventive), the
Commissioner (Appeals) and the CESTAT were not justified in upholding the
order of confiscation of the amount of 18,23,100/- and imposition of the penalty
in respect thereof.
24. In view of the above, the substantial question of law referred to and
reproduced in para 5 is answered in favour of the appellant and against the
Revenue relating to seizure of Indian currency of 18,23,100/-. The appeal
stands disposed of accordingly.

20. In another case the Kolkata Tribunal, in Sudarsan Jana Versus
Commissioner Of Customs (P), Kolkata , Final Order No.
A/75852/KOL/2016, dated 9-8-2016 in Appeal No.
C/75084/2016-DB, 2017 (357) E.L.T. 656 (Tri. - Kolkata) , it is
held as under:

4. Heard both sides & perused the case records. The issues involved in the
present proceeding are.
(i) Whether absolute confiscation of Rs. 59,41,550/- Indian currency has been
correctly made by the Adjudicating authority under Sec. 113 of the Customs
Act, 1962, by rejecting the claim of the appellant?

10


Appeal No. 76811 of 2025
Customs


(ii) whether penalty has been correctly imposed upon the appellant under Sec.
114AA of the Customs Act, 1962 for making a false claim & submitting forged
documents.?
4.1 So far as point at Para 4(i) above is concerned it is observed from the
contents of the show cause notice dated 28-11-2014 that no evidence is
existing in the body of the show cause notice as to why seized currency is liable
to confiscation under Sec. 113 of the Customs Act, 1962. If the appellant is not
the owner of the seized currency then how this currency was attempted to be
exported out of India and by whom Adjudicating authority in his entire
discussion & finding portion of the OIO dated 1-10-2015 has been justifying that
claim of the appellant & the documents furnished by the appellant are faulty. In
Para-Xi, on internal Page 11 of the OIO dated 7-10-2015, it is mentioned that
confiscation of seized currency is proposed for ‘illegal exportation of goods’
when such a wording is not used at all in the charging paragraph on internal
Page-5 of the show cause notice dated 28-11-2014. Another dimension added
by learned AR appearing on behalf of the Revenue, is that currency brought into
a ‘specified area’ notified under a notification is prohibited, when such an aspect
has not been even touched by the Adjudicating authority. ‘Specified area’
specified and notified in Notification No. 31/2008-Cus. (N.T.), dated 25-3-2008
has to be read with Sec. 11H(C), Sec. 11H(e) & Sec. 123 of the Customs Act,
1962 before burden of proof can be said be lying on the appellant or any other
person. As Indian currency has not been notified as specified goods under Sec.
11H(e) or notified under Sec. 123 of the Customs Act, 1962, it cannot be said
that bringing of goods into a specified area are liable to confiscation. If the
interpretation given by learned AR is accepted then each & everything brought
into ‘specified area’ will be liable to confiscation. There is no evidence on record
at all in the show cause notice as well as in the Adjudicating order as to how
seized currency is liable to confiscation under Sec. 113 of the Customs Act,
1962. No subsection of Sec. 113 has been specified in the show cause notice
under which Indian currency seized is charged to be liable to confiscation.
Under the circumstances confiscation of seized Indian currency is not justified
and order to that extent passed by the Adjudicating authority is liable to be set
aside.
4.1.1 So for as ownership claim of the appellant is concerned it is observed
that appellant has claimed the ownership of seized Indian currency, though
belatedly, along with the source of licit acquisition of the same. Adjudicating
authority in the last Para of discussion & finding also held that since no claimant
has come forward the seized goods were designed to be illegally exported out
of the country. Such an allegation is not contained in the show cause notice. It
has been held by this Bench in the case of Md. Bellal Hossain v. CC (Prev.),

11


Appeal No. 76811 of 2025
Customs


WB (supra) and Ekram S.K. v. CC (Prev.), WB (supra) that late filing of
ownership claim does not affect the case of the person claiming ownership.
Once no other claimant came forward then the claim of the present appellant
can not be rejected and seized Indian currency cannot be held to be unclaimed.
Adjudicating authority may be right in his observations that documents furnished
by the appellant are not sufficient to establish licit acquisition of seized currency
but that does not take away the right of the appellant to claim the ownership. In
the absence of any other claimant there is no basis denying the ownership title
of seized currency to the appellant. Customs Act, 1962 is not the statute for
confiscation of seized currency only on the reason that legal acquisition of
currency is not established by the appellant. Appellant in his statement dated 1-
9-2014 during investigation stated the reasons for delay in staking his claim and
also the source of the seized Indian currency. The version of the appellant was
corroborated by other statements recorded and documents furnished by the
appellant, except minor variations. In the light of above observations legal
proposition of law & absence of any other claimant it is held that appellant is the
rightful owner of the seized Indian currency. There is no evidence on record that
seized currency was meant to be exported out of India. Only finding regarding
confiscation of Indian currency; given by the Adjudicating authority in Para-xi on
internal Page 11 of the OIO dated 7-10-2015, also does not throw any light as
to why seized Indian currency is liable to confiscation. It is not established by
the department that documents produced by appellant are forged & fabricated
when the persons giving these evidences have confirmed the authenticity of the
documents by giving Sec. 108 statements before the investigation. Further,
there is no evidence on record that seized Indian currency was attempted to be
exported out of India by the appellant as per case laws relied upon by appellant
is Para 2.1 above. Accordingly absolute confiscation of the seized currency of
Rs. 59,41,550/ is set aside and is ordered to be released to the appellant.
5. So for as imposition of penalty under Sec. 114AA of the Customs Act, 1962
is concerned there is no evidence of forged nature of documents produced by
the appellant except the analysis made by the Adjudicating authority. Customs
Act, 1962 is not an enactment to penalise a person for forgery, if any. Secondly,
it is already held above that claim of the appellant was not false in the absence
of any other claimant. It is observed from the show cause notice dated 28-11-
2014 that allegation of forging of documents was not at all made in the show
cause notice. Adjudication order is thus also required to be set aside, as per
Apex Court observations in Para-16 of case law CC, Mumbai v. Toyo
Engineering India Limited (supra), on the grounds that Adjudicating authority
has gone beyond the scope of show cause notice.

12


Appeal No. 76811 of 2025
Customs


6. In view of the above observations and settled proposition of law appeal filed
by the appellant is allowed with consequential relief, If any.

21. In the case law of Manir Hossain cited supra, this Bench has held
as under:

3. Further it is recorded in the Show Cause Notice that on
20.11.2019 at about 17.30 hours specific information was received
by the officers of the Custom Preventive for Sonamura from a
reliable source that an Indian National who is actively involved in
dealing in illicit conversion/Exchange of Bangladesh Currency (BD
Taka) and other illegal activities would be carrying Indian currency
notes valued at about Rs. 15,00,000/- only for the purpose of illegally
exporting to Bangladesh through Rabindranagar unfenced border
area at about 18.30 hours on 20.11.2019. Accordingly, an immediate
interception team led to seizure of Indian currency notes valued at
Rs. 15,00,000/- only.
17. Admittedly the Rabindranagar is 3 km away from the border of
Bangladesh border. In that circumstances, also the benefit of doubt
goes in favour of the appellant.
18. In view of this I hold that the Revenue has failed to prove that the
appellant were involved in the activity of transportation of Indian
currency illegally to Bangladesh. Therefore, the Indian currency
seized from Shri Ali Hossain is not liable for confiscation as the
Indian currency seized is not liable for confiscation, therefore, no
penalty can be imposed on the appellant.
19. In view of this the impugned order qua absolute confiscation of
Indian currency and imposing penalty under Section 114 of the
Customs Act, 1962 on the appellant is set aside.
20. Therefore, I order to release the Indian currency of Rs.
15,00,000/- which is deposited to SBI seized from Shri Ali Hossain to
the appellant as 6 Appeal No.: C/75730/202 Shri Ali Hossain in his
statement stated that the impugned Indian currency belongs to the
appellant.

22. I find that the ratio laid down in the above case laws are squarely
applicable to the facts of the present case.

13


Appeal No. 76811 of 2025
Customs


23. Accordingly, I set aside the confiscation of the Indian Currency,
Motor Cycle and penalty imposed in the impugned order and allow the
appeal.

24. The appellant would be eligible for consequential relief, if any, as
per law.

(Pronounced in the open court on 29.10.2026 )




(R.Muralidhar)
Member (Judicial)


RG