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2016 (6) TMI 70 - GOVERNMENT OF INDIA

2016 (6) TMI 70 - GOVERNMENT OF INDIA - TMI - Seeking setting aside of impugned order-in-original and Commissioner (Appeals) order - Rejected as infructuous on the ground of merger - Held that:- Government finds merit in the contention of the Department that question of merger does not arise as the issue on which the impugned Order-in-Original is challenged by them was not a matter of consideration in Order-in-Appeal 331/2015 date 24.06.2015. In this regard, government finds support in several j .....

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led by the Department on merit.

Absolute confiscation of gold and imposition of penalty - Illicit import of gold - Gold smuggled by way of concealment and by ways of non-declaration knowing well that she was not an eligible passenger to import gold - Whether the import of impugned goods is prohibited or not - Held that:- the respondent was not eligible to import gold either in terms of Notification 12/2012-Cus dated 17.03.2012 nor under Rule 6 of Baggage Rules ibid. She also did not d .....

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Section 111 (d) and (i) of the Customs Act, 1962. Therefore, the Government upholds the Departmentís contention that absolute confiscation is legally warranted.

Whether the respondent is the owner or carrier of the impugned gold - Held that:- there is no dispute about the fact that in her statement, the respondent has clearly admitted that she imported 1375 grams of 24 carat gold which was given to her by her husband who asked her to conceal it in her bra by wrapping it in a tissue pa .....

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get goods released on payment of fine.

Government further finds that the provision for re-export of baggage is available under Section 80 of the Customs Act, 1962. However, this Section is applicable only to cases of bonfire baggage declared to Customs, which the applicant failed to do. Thus the applicant is not eligible for re-export of impugned goods. There is force in Departmentís contention that allowing ridding of offending goods and allowing re-export even when caught by Customs .....

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impugned gold. Considering the gravity of the offence, the penalty of ₹ 2,50,000/- imposed on respondent under Section 112 of the Customs Act, 1962 by the original authority is also restored and upheld. - Decided in favour of revenue - F. No. 380/27/B/15-RA, F. No. 380/33/B/15-RA - Order No. 2-3/2016 -CUS - Dated:- 22-1-2016 - Rimjhim Prasad ORDER These revision Applications are filed by the Commissioner of Custom Chennai-I (hereinafter referred to as the Department) against the order-in- .....

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y dispose of the revision application against Order-in-Appeal No.331/2015 date 24.06.2015 after following due process of law within a period of eight weeks from the date of receiving the order. Government also takes up revision application against Order-in-Appeal No. 400/2015 dated 06.08.2015 as both pertain to a common Order-in-Original No. 17/2015 dated 20.04.2015. 2. Brief facts of the case are that on 14.05.2014 the respondent passenger by the name Smt. shaik Shamim Banu, wife of Shri Shaik .....

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s, she was brought along with her baggage for its detailed examination and her personal search. Before commencement of the same, she was once again questioned as to whether she was in possession of gold/contraband goods to which she replied, she was having some food stuff and toiletries valued at ₹ 4000/- and used clothes only. A detailed examination of her three checked-in bags and one hand bag was conducted, in the presence of witnesses, but nothing incriminating was found. thereafter, a .....

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7 grams suspected to be gold, totally weighing 1375 grams wrapped in white tissue paper and transparent polythene cover, kept inside the white colour bra worn by her were recovered. The Government approved gold appraiser5 was called upon to examine the recovered gold in the presence of witnesses and the said passenger and on examining the yellow metal cut bars and bangles, he citified them as made of gold of 24 carat parity and totally weighing 1375 grams and appraised the total value of the gol .....

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Trade (Development & Regulations) Act, 1962. Beside the above recovered gold, the following viz. air ticket, issued by TVs Travel Tours, Kuwait city; Kuwait Airways boarding pass stub issued in her name and her Customs declaration card on which she declared the goods as used personal clothes/effects and dood stuff totally valued at ₹ 4000/-along with white colour bra worn by her which was used to conceal gold were seized under he mazhar as material objects. Rest of her personal effects .....

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ly weighing 1375 grams and asked her to conceal them in her bra by wrapping the gold in a white tissue paper and polyhthene cover and to take to India without declaring to Customs; that one Shri Mahaboob Basha would come to their home in India and would give her ₹ 100,000/- and she should in turn hand over gold to him; that as she needed money of her daughter s marriage, she agreed to smuggle the impugned gold into India; that she did not have any legal documents which support the import o .....

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r statement tendered earlier before the customs on the grounds that it has been recorded applying duress and coercion upon her. A Show Cause Notice under Section 124 of the customs Act, 1962 was issued to Smt. Shaik shamim Banu, for her alleged offence of contravening Sections 77 & 79 of the act, ibid, proposing as to why the impugned gold should not be confiscated under Section 11(d) & (i) of Customs Act, 1962 and why the material used to conceal the said gold should no be confiscated u .....

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f fine of ₹ 17,50,000/- under Section 125 of the Act ibid. (ii) Imposed a penalty of ₹ 2,50,000/- (Two lakhs fifty thousand only) on Smt. Shaik Shamim Banu under Section 112 (a) & (b) of the Customs Act, 1962. 3. Being aggrieved by the said Order-in-Original, both Smt. Shamim Banu and the Department filed their respective appeals againt the Order-in-Original No. 17/2014 dated 20.04.2015 before the Commissioner of Customs, Chennai (Appeals-I) who decided the appeal of Smt. Shaik S .....

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er-in-Original and confiscating the goods absolutely as the passenger was not the genuine owner of the goods but a carrier and is not entitled to redemption fine was later set aside by the commissioner (Appeals) vide its Appellate order No. 400/2015 dated 06.08.2015 as infructuous on the ground of merger. 4. Being aggrieved by both the above impugned Order-in-Appeal, the Department has filed these revision applications under Section 129DD of Customs Act, 1962 before the Central Government on the .....

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contravened Sections 77 and 11 of Customs Act, 1962 read with Regulation 3(1) of foreign Exchange Management (Export and Import of Currency Regulations 2000 which made the smuggled gold liable for absolute confiscation under Section 111(d) and (I) of the customs Act, 1962. The appellate authority without considering the following aspects ha given an option to redeem the gold an payment of redemption fine of ₹ 7,00,000/- and penalty of ₹ 1,00,000/- for re-export. 4.2.1 That the eligi .....

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n such visit does not exceed thirty days can bring fold up to 1 kg. and the duty has to be paid @ 10% on the value of the gold and the duty has to be paid in foreign currency. 4.2.2 That Rule6 of Baggage Rules, 1998 states that a passenger who stayed abroad for more than one year can bring gold jewellery (22 carat) to an extent of ₹ 1 lakh (female passenger) and to an extent of ₹ 50,000/- (male passenger) and the same can be cleared from Customs without payment of duty. 4.2.3 that in .....

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the appellate authority to allow the re-export of goods on payment of redemption fine is not acceptable a the passenger with an intention to smuggle did not declare then gold in her possession and mis-declared the same in the Customs declaration Card as Personal effects of worth ₹ 4000/- only and attempted to smuggle the gold out of the airport by adopting ingenious model operandi of concealment. In support of the contention, the following case laws are relied upon:- * Hon ble apex Court i .....

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y criteria, which makes the imported item a prohibited goods. 4.4 That the appellate authority in his order has stated that ownership of the gold is established in para 21 of the Order-in-Original is not acceptable as the passenger herself in her voluntary statement given under Section 108 of Customs Act, 1962 has staed that her husband gave her 4 gold cut bars and 2 nos. bangles weighing 1375 grams and asked her to conceal them in her bra by wrapping the gold in a tissue paper and polythene cov .....

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d. Hence, the passenger is a carrier of smuggled gold and not the owner. The board vide Circular No. 6/2014-CUS dated 06.03.2014 in para 3 (iii) has cited as under: (iii) wherever possible, the field officer, may inter alia, ascertain the antecedents of such passengers, source of funding for gold as well as duty being paid in foreign currency, person responsible for booking of tickets etc. so as to prevent the possibility of the misuse of the facility by unscrupulous elements who may hire such e .....

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prohibited from bringing/importing by such ineligible passenger. Hence, the Order-in-Original passed by the lower adjudicating authority allowing the re-export of the gold (which is prohibited for the subject passenger), instead of ordering for the absolute confiscation, is not correct, especially when the passenger acted ass carrier and when he is not the owner of the seized gold. In such cases, the seized gold should invariably be confiscated absolutely and Re-export option should not be given .....

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arely applicable to this case since the passenger is not the owner of the gold. 4.6.2 the Hon ble High Court in the case of UOI Vs Mohammed Aijaj Ahmed in WP No. 19.01.2003 decided on 23.07.2009 reported in 2009(244) ELT 49 (Bom) has set aside the order of the CESTAT allowing the redemption of gold and upheld the order passed by the Commissioner of Customs ordering absolute confiscation of gold, as the gold did not belong to the passenger, who acted as a carrier of gold. the said order of Bombay .....

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tted that he was taking the currency clandestinely on behalf of one Abudllah for monetary consideration. This particular evidence was held to be acceptable and cannot be brushed aside and there is no record to show that the statement of the petitioner was recorded under duress/pressure and the same was not voluntary. It is settled legal proposition that statement recorded under Section 108 of the Act, is admissible unlike a statement recorded by a Police officer. 4.6.4 That in a recent judgement .....

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4.6 That re-export of goods is covered in Section 80 the Customs Act, 1962 That as per the said Act, where the baggage of the passenger contains any article which is dutiable or import of which is prohibited and in respect which a true declaration has been made under the Section 77, the proper officer may, at the request of the passenger, detrain such article for the purpose of being returned to him on his leaving India. That in this case, the passenger has not filed true declaration and hence t .....

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der-in-Appeal C.Cus. 331/2015 dated 24.06.2015, in party s appeal filed on 16.06.2015, has erroneously passed order by not only upholding the -Re-export Order of the lower adjudicating authority but also reduced the fine to ₹ 7,00,000/- and the penalty to ₹ 1,00,000/- which is not sustainable as per law, against which, the Department has filed Revision Application. 4.9 That the order of the appellate authority has the effect of making smuggling an attractive proposition, since the pa .....

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the grounds were that the redemption fine and penalty imposed by the lower adjudicating authority were excessive and the passenger prayed for reduction of the same. The passenger did not contest the re-export option give by the lower adjudicating authority and the Appellate Authority has passed Order vide Order-in-Appeal C.Cus. 331/2015 dated 24.06.2015 by reducing the fine to ₹ 7,00000/- and the penalty to Rs..1,00,000/- without going into the merit of the case. 4.10.2 whereas, being agg .....

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icating authority allowing re-export on payment of the redemption fine and penalty. But the Appellate authority, vide Order-in-Appeal C.Cus No. 400/2015 dated 06.08.2015, simply dismissed department s as In fructuous on the ground of merger. 4.10.03 From the above, it is clear that the grounds and the prayer of the passenger and the Department in the Appeals before Commissioner (Appeals) are entirely different, which was not appreciated by the Appellate authority. For the same reason, he should .....

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does not arise. Hence, the Order-in-Appeal C.Cus No. 400/2015 dated 06.08.2015 passed by the Appellate Authority dismissing the departmental appeal is neither legal nor proper. 4.11 That in view of the above, it is prayed that the order of the appellate authority allowing the re-export of the gold on payment of redemption fine be set aside or pass any such order as deemed fit. 5. Show Cause Notices dated 10.08.2015 and 07.08.2015 were issued to the respondent under Section 129DD of the customs A .....

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ue writ of Mandamus directing the Government authority to implement the order passed by the Commissioner (Appeals-I) Chennai, No. 331/2015 dated 240.06.2015. The Hon ble High Court disposed off the Writ Petition vide its order dated 29.06.2015. The Hon ble High Court disposed off the Writ Petition vide its order dated 29/06.2015 which was received in this office on 26.11.2015 with the direction to the petitioner to place all their submissions as to substantiate their case before revisionary Auth .....

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raverse beyond it. Also no new ground can be invoked in the revision stage belong the scope of the Show Cause Notice wherein grounds mentioned for convocation of goods are Section 111 (D) & (I) of the Act. The goods are not prohibited in nature and have rightly been allowed for re-export on reduced fine and penalty. With regard to hearing held for revision of Order-in-appeal No. 400/2015 dated 06.08.2015, he also stated that the original order and appellate order have already merged with ear .....

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l and the order of the Hon ble High Court dated 31.08.2015. 8. On perusal of the records, Government observes that it is an undisputed fact that respondent imported impugned 24 carat gold cut bars and bangles weighing 1375 grams and attempted to walk through green channel to smuggle the same out by way of concealment, by keeping it wrapped in white tissue paper and transparent polythene vocer inside the bra worn b y her and did not declare the same to the Custom under Section 77 of the Act, idid .....

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duty; that her husband had given the gold to her to deliver the same to one Shri shaik Mahabood Basha who would visit their home and in return he would give her ₹ 1,00,000/- ; that as she needed money for the marriage of her daughter, she readily agreed to carry the impugned goods for monetary gain. She admitted it is an offence bringing gold by concealing and not declaring to Customs and requested for the leniency as it was her first offence. The original adjudicating authority ordered fo .....

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06.2015 allowing re-export of the impugned gold on reduced redemption fine of ₹ 7,00,000/- and personal penalty of ₹ 1,00,000/-. The Department s appeal on the other hand dismissed vide Order-in-appeal No.400/2015 dated 06.08.2015 as infructuous as it was filed after issue of Order-in-Appeal No. 331/2015 dated 20.06.2015 and wherein it is held that apparent remedy to this seems to be under Section 129 DD ibid. Aggrieved by both the impugned Orders-in-Appeal, the Department has filed .....

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Order-in-Appeal on passenger s appeal and subsequent filing of appeal by the Department has led to this situation and the apparent remedy lies under Section 129DD viz Revision Application. The Department on the other hand has contended that the commissioner (Appeals) has failed to appreciate that the grounds and prayer of the passenger and that of the Department in their respective appeals before him are entirely different. While the passenger had filed the appeal for reduction of fine and penal .....

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ould not apply as subject matter of Revenue and assesses appeal was quite different and Tribunal can adjudicate jupon the matter on merits. The CESTAT, Principal bench in the case of CCE, Delhi-I vs. Pearl Drinks 2011 (273) ELT held that as in earlier appeal proceedings, the issue sought to the raised now by the Department was not dealt with nor arose for consideration, appeal was held maintainable and merger not acceptable. Further, the Apex Court in the case Mauria Udyog Ltd. Vs. CCE, Delhi-II .....

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as it would tantamount to points raised by department remaining unanswered. The commissioner (Appeals) has thus erred in rejection Department s appeal as infructuous on ground of merger and the same cannot be help as legal and proper. Therefore, Government one proceeds to decide both the revision Applications filed by the Department on merits 10. Government observes that the commissioner (Appeals) has held that the passenger has no previous office registered against her and therefore, allowed re .....

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deration and had obviously concealed the gold inside her bra and the same had not been declared in the Customs declaration card the passenger has also not fulfilled the conditions stipulated under Notification No. 12/2012-Cus dated 17.03.2012 as amended and Rule 6 of the Baggage rules. Therefore, it is pleaded that the passenger was not eligible to import the gold and accordingly the impugned orders of the lower authorities allowing redeeming of the goods an re-export are unlawful and has the ef .....

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nt that she was carrying the gold the someone else for monetary consideration. However, she later claimed that seized gold belonged to her as it was handed over to her by her husband. The passenger has also not fulfilled the conditions of Notification 12/2012-Cus dated 17.03.2012 nor was she entitled to import the impugned gold under rule 6 of the Baggage Rules (which allows import of 22 carat personal gold jewellery up to ₹ 100,000/- for female passenger. 12. As regards, whether the impor .....

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Apex Court in the case of Om Prakash Bhatia Vs Commissioner of Customs Delhi reported in 2003(155) ELT 423 (SC) has categorically held that if there is any prohibition of import or export of goods under the Customs Act, 1962 or any other law for the time being in force the goods would be considered to be prohibited goods an this prohibition would also operate on such goods the export or import of which is subject to fertain prescribed conditions if the conditions are not fulfilled. Further in th .....

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treated a bona fide baggage in terms of Section 79 of the act ibid. the said gold Imported in violation of foreign Trade provisions of Sections 77,79,11 of Customs Act, 1962; para 2.20 of Exim policy of 2009-14 and provisions of Section 3(3) and 11(1) of Foreign trade (Development & regulation) Act, 1992. The same would thus appropriately constitute prohibited goods liable to confiscation under Section 111 (d) and (i) of the Customs Act, 1962. 12.3 Therefore Government upholds the Department .....

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act that in her statement recorded on 14.05.2014, the respondent has clearly admitted that she imported 1375 grams of 24 carat gold which was given to her by her husband who asked her to conceal it is her bra by wrapping it is a tissue paper and polythene cover and take them to India without declaring to customs, to be handed over to Shri Shaik Mahaboob Basha who would come to their home in India and in turn would give her ₹ 1,00,000/-. therefore, it is clear from her statement that respon .....

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1962. A similar view has been taken by the Apex Court in Naresh J. Sukhawani vs Union of India 1996(83) ELT 258(SC) holding that statement before a Customs Officer under Section 108 of the Customs Act 1962 is a material piece of evidence. Further, same stand was taken by the Hon ble High Court of Madras in the case of S. Faisasl Khan vs. Joint Commissioner of customs (Airport) Chennai 2010 (259) ELT 541 (Mad). So the statement given before Customs is valid is valid evidence and any subsequent su .....

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erthought as she not produced any evidence in support of the plea that the statement was recorded under duress. 16. Further, Government notes that Hon ble Court of Bombay in its judgement dated 23-07-2009 in the case of UOI Vs Mohammed Aijaj Ahmed (WP No. 1901/2003) reported as 2009 (244) ELT 49 (Bom.) has set aside the order of CESTAT ordering to allow redemption of gold and upheld the absolute confiscation of gold ordered by Commissioner of Customs. In this case the gold did not belong to pass .....

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) ELT 368 (Del) also the Hon ble High Court of Delhi has held that carrier is not entitled to benefit of Section 125 of Customs Act, 1962 Government, therefore, holds that in the present case the gold imported by the passenger as a carrier is liable for absolute confiscation as rightly pleaded by the Department. 17. Government further finds that the provision for re-export of baggage is available under Section 80 of the Customs Act, 1962. However, this Section is applicable only to cases of bonf .....

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