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2016 (5) TMI 83 - CALCUTTA HIGH COURT

2016 (5) TMI 83 - CALCUTTA HIGH COURT - 2016 (336) E.L.T. 230 (Cal.) - Constitutionality of amended Section 129E of the Customs Act, 1962 - Imposition of exemplary penalty under Section 112 of the Customs Act - Improper importation of gold bars of foreign origin - Appellant contended that penalty imposed on the basis of value of smuggled gold could not have been made as gold is not a prohibited item nor is the import thereof prohibited by virtue of any notification or order under the Act of 1962 .....

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y prohibition is in force" in the context of Section 112 of the Act would imply goods which are prohibited from being imported and not goods which have been smuggled into the country in contravention of the procedure established by law for the import thereof. Thus, while the corresponding provision in Section 111 of the Act permits the confiscation of the goods on a broader construction of the relevant expression with reference to the definition of “prohibited goods”; the similar provision in Se .....

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8-4-2016 - Sanjib Banerjee, J. For the Petitioner: Mr Mainak Bose, Adv., Mr Ravi Kumar Dubey, Adv. Mr Soumya Mazumder, Adv., Mr Manoj Malhotra, Adv., Mr Mainak Ganguly, Adv. For the Respondents: Mr Rajarshee Bhardwaj, Adv., Mr Subir Kumar Saha, Adv. ORDER Sanjib Banerjee, J. The petitions involve a common issue and pertain to the same order of November 24, 2015. 2. Though the petitions carried prayers challenging the constitutionality of amended Section 129E of the Customs Act, 1962, such challe .....

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to be the principal accomplice of the other petitioner. 4. The penalty in either case has been imposed under Section 112 of the said Act for improper importation of gold bars of foreign origin. The penalty that has been levied on the petitioners is on the basis of a clause in the relevant provision that permits a penalty not exceeding the value of the goods or five thousand rupees, whichever is greater to be imposed for improperly bringing into the country goods in respect of which any prohibit .....

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e not really relevant, except to appreciate how the legal issue arises in the context thereof. 6. It is the allegation of the Customs authorities that the Directorate of Revenue Intelligence had specific intelligence input that nine Bongaon residents would carry smuggled gold from Bongaon to Kolkata on April 8, 2013. According to such information, the smuggled gold was to be collected from the petitioner in the second matter to be delivered to the petitioner in the first matter in Kolkata. 7. In .....

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that the two key players were the two petitioners herein. The petitioner in the first matter was also examined but the petitioner in the second matter did not respond to the several summons issued to him. 8. The facts are not much in dispute and the findings rendered in course of the order of adjudication as to the culpability of these petitioners have not been questioned. The only ground urged is that the penalty imposed on either petitioner on the basis of the value of the smuggled gold could .....

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the Customs authorities. 9. It is imperative to notice Section 112 of the Act at the outset to consider whether the penalty imposed on either petitioner is in accordance therewith: 112. Penalty for improper importation of goods, etc. - Any person, - (a) who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under section 111, or abets the doing or omission of such an act, or (b) who acquires possession of or is in any way c .....

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se of dutiable goods, other than prohibited goods, subject to the provisions of section 114A, to a penalty not exceeding ten per cent. of the duty sought to be evaded or five thousand rupees, whichever is higher: Provided that where such duty as determined under sub-section (8) of section 28 and the interest payable thereon under section 28AA is paid within thirty days from the date of communication of the order of the proper officer determining such duty, the amount of penalty liable to be paid .....

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the greater; (iv) in the case of goods falling both under clauses (i) and (iii), to a penalty not exceeding the value of the goods or the difference between the declared value and the value thereof or five thousand rupees, whichever is the highest; (v) in the case of goods falling both under clauses (ii) and (iii), to a penalty not exceeding the duty sought to be evaded on such goods or the difference between the declared value and the value thereof or five thousand rupees, whichever is the hig .....

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ny other statute and such prohibition would relate to the nature of the goods prohibited and not cover the manner of its import or smuggling into the country. They seek to make a distinction between the illegal import of any goods within the meaning of the definition in Section 11-A(a) of the Act and the definition of prohibited goods under Section 2(33) thereof. The petitioners next refer to dutiable goods as recognised in Section 12 of the Act and assert that it is one thing to say that the go .....

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oods are referred to in the said Act, it must necessarily be understood to relate to only such goods which are specifically prohibited from being brought into the country by the said Act or any other law. 11. The Union submits that when the import of any goods is permitted by the said Act or any other law in an particular manner and form, any other mode or method adopted to bring such goods into the country would tantamount to conduct infringing the prohibition of the import of the goods in acco .....

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The Union has also referred to the Foreign Trade (Development and Regulation) Act, 1992, the foreign trade policy formulated thereunder and the distinction made therein between goods which are freely importable, those in respect whereof certain restrictions apply and others which are prohibited from being imported. The Union has referred to a circular issued by the Central Board of Excise and Customs that permits only nominated banks to import gold and prohibits the import of certain items of g .....

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he expression subject to any prohibition under this Act or any other law in the definition of prohibited goods in Section 2(33) of the Act and concluded that if the conditions prescribed for import or export of goods are not complied with, it would be considered to be prohibited goods. In the later judgment, it was held that smuggled goods could not be regarded as imported goods. 14. There is a distinction between Section 111 and Section 112 of the Act. The former provides for confiscation of im .....

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