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Shri Gagan Preet Singh Versus The Commissioner of Customs (I&G) , New Customs House, IGI, Airport, New Delhi AND Vice - Versa

2016 (7) TMI 793 - GOVERNMENT OF INDIA

Import of baggage without declaring goods - Levy of penalty - carrying contraband or dutiable goods - passing through green channel - Held that:- Government notes that not only the applicant attempted to smuggle the impugned goods in substantial quantity but it is also an uncontested fact on record that he also colluded with and abetted with another passenger to facilitate smuggling of the impugned goods. Therefore the applicant has rightly been held as liable for penalty under Section 112 of th .....

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Government therefore restores the quantum of redemption fine and penalty as imposed by the original adjudicating authority. - Decided in favor of revenue. - F.No.375/23/2013-RA AND F.No.380/86/2013-RA - ORDER NO.37-38/2016 Cus - Dated:- 31-3-2016 - SMT. RIMJHIM PRASAD, JOINT SECRETARY ORDER: These Revision Applications are filed by the Commissioner of Customs, (I&G), New Delhi (hereinafter referred to as the Department) and Shri Gagan Preet Singh (hereinafter referred to as Applicant) agains .....

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from a common Orders-in-Appeal. 2. Brief facts of the case are that Shri Gagan Preet Singh, r/0 147, Bharat Nagar, Delhi-52 holder of Indian Passport No.F-7683784 dated 17.05.2006 issued at Delhi and Shri Munish Dhir, S/o Shri Tarsem Lal Dhir, resident of N.L. 198, Mohalla Mohindru, Jalandhar holder of Indian Passport No. E-4003707 dated 20.012003 issued at Jalandhar, arrived from Hong Kong by flight no. IT-032 on 17.05.2011 at IGI Airport, Terminal-3, New Delhi. On the basis of suspicious move .....

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X-ray machine/scanner situated in the Arrival Hall. At this stage two independent witnesses were called to watch the proceedings. The passenger identified as Shri Gagan Preet Singh from his passport, was carrying one checked in baggage i.e. one red and blue bag and one black coloured hand bag. During the scanning of his baggage, nothing suspicious was noticed. However, noticing the abnormal bulge below his waist near the trouser's pockets, the applicant was enquired about the same. Shri Gag .....

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o diverted for scanning of the baggage through the X-Ray machine situated at arrival hall. Shri Munish Dhir was also carrying one black coloured hand bag and one polythene bag of duty free shop. During the scanning, nothing suspicious was noticed in his black coloured hand bag. However, on enquiry Shri Munish Dhir also accepted that he was carrying two packets of memory cards in his pockets and these memory cards belonged to Shri Gagan Preet Singh, i.e. Pax-l. Thereafter written notices under Se .....

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nsent in presence of the witnesses. During the personal search of Shri Gagan Preet Singh the items recovered included two yellow khaki coloured plastic coated envelopes duly sealed with adhesive tape which on examination where found to contains Micro SD 2 GB Memory Cards totalling 3400 pcs, Indian currency ₹ 1650, Hong Kong Dollar-40 and Thai Baht 40, Samsung Mobile Phone Model No. GT-E 1088C with Vodafone sim card, Passport No. F7683784 dated 17.05.2006 in respect of Shri Gagan Preet Sing .....

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7; 10,74,000 /- 2.1 Statement of Shri Gagan Preet Singh was recorded on 18.05.2011 under Section 108 of the Customs Act, 1962. He inter alia stated that he was 12th pass from Delhi and was engaged in his own business of mobile phones and their accessories at Karol Bagh, Ghaffar Market, New Delhi outside the shop no. 107 for the last five years; that he went to Hong Kong on 15.05.2011 by Flight No. IT 031 and stayed at Star Guest House, Nanthan Road, Hong Kong; that he returned to India by flight .....

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he waist of his trousers on suspicion, the personal search of his person was conducted which resulted in recovery of 3400 pcs of 2 GB memory cards. He admitted of carrying the impugned goods by concealing in his trousers pocket. He also admitted that another passenger Shri Munish Dhir who had also come by the same flight carrying same quantity(3400pcs) of 2 GB memory cards on his behalf, concealing the same in his pocket. 2.2 Shri Munish Dhir under Section 108 of the Customs Act, 1962, interalia .....

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efore the Magistrate on 18.05.2011 and were sent to judicial custody on 18.05.2011. Both the passengers were released on bail on 25.05.2011 by the Learned ACMM, Patiala House Court, New Delhi. 2.4. Subsequent to the investigations, combined Show Cause Notice was issued to both the Pax on 09.112011. The Show Cause Notice was adjudicated by Additional Commissioner of Customs (IGI) Airport, New Delhi who vide Orders-in-Original No.67/2012 dated 28.09.2013 ordered: (i) denial of free allowance of &# .....

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id. (iii) confiscation of two bottle of scotch whiskey of Chivas Regal values at ₹ 3066/- recovered and seized from Shri Gagan Preet Singh under Section 111 (l) and (m) of the Customs Act, 1962, with an option to redeem the same on payment of redemption fine of ₹ 1000/- under Section 125 of the Act, ibid. (iv) demand and recovery of Custom duty amounting to ₹ 3,87,321/- involved on the seized/confiscated 6800 pcs of 2 GB Micro SD Cards valued at ₹ 10,74,400/- @ 36.05% ADV .....

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) imposed a penalty of ₹ 2,00,000 /- upon Shri Gagan Preet Singh, under Section 112 of the Customs Act, 1962 for various acts of omission and commission as brought out supra. 3. Being aggrieved by the said Order-in-Original, the applicant filed appeal before Commissioner(Appeals) who vide Order-in-Appeal No. CC(A) Cus/218/2013 dated 29.042013 modified the Orders-in-Original to the following extent: (a) allowed the 20% abatement for calculation of duty on the value of confiscated impugned g .....

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plicant 4.1.1 That the value of goods apprised at ₹ 8,63,817/- by the Commissioner of Customs(Appeals) after allowing 20% rebate on the NIDB data dated 24.02.2011. That DRI vide F.No.Vlll (26)LZU/DR1/18/2012 appraised the value of 2GB Micro SD Card @ ₹ 100 per piece whereas in the present case the value was appraised at ₹ 158 per piece which is not in accordance with valuation Rules. That it is requested to re-appraise the value of Micro SD Cards under confiscation after giving .....

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es not levied or short levied or erroneously refunded under Section 28 of the Act. That the goods were seized by the Customs Department and were with the Customs Department. There is no question of short levied or not levied or erroneously refunded under Section 28 of Act. That Section 28 of the Customs Act, 1962 is not applicable in their case. That Section 28 is applicable only when there is order of clearance passed by the proper officer and the proper office has to issue Show Cause Notice fo .....

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efunded. 4.13 The reliance is placed on the decision of the Hon'ble CESTAT in-the case law Essar Oil Ltd Vs. Commissioner of Customs (Prev.), Jamnagar -2006(197) ELT 450 (Tri-Mumbai). 4.1.4 That value of goods be reappraised, redemption fine and personal penalty be reduced, set aside the order in respect of demand of interest under Section 28AB. 4.2. Grounds of Revision tendered by the Department 4.2.1 That no written submissions made by the Shri Gagan Preet Singh and Shri Munish Dhir before .....

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ta relied upon by the adjudicating authority on the grounds that data pertains to dated 24.02.2011 and 18.03.2011 while cause of action arose on 17.05.2011. That the grounds taken by the appellate authority appears to be arbitrary and without any legally justifiable grounds vis a vis NIDB data base used and relied upon by the adjudicating authority, therefore grant of abatement of 20% does not appear to be legal and proper. 4.2.3 That in spite of the serious case of smuggling of memory cards val .....

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ving any reasons in the order does not appear to be legally correct. 5. An application for condonation of delay in filing Revision Application is also filed by the department applicant on the following grounds: 5.1. That a revision application against Orders-in-Appeal No. CC(A)Cus/Air/218/ 2013 dated 29.04.2013 in respect of Shri Gagan Preet Singh passed by Commissioner (Appeals), New Delhi has been filed on 27.08.2013 i.e. after lapse of three months time as prescribed under Section 129 DD (IA) .....

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e delay is due to inadvertent mistake of law and is not intentional, it is genuine and bonafide. 6. Personal hearing in this case held on 02.09.2015 was attended by Ms. Harsimran Kaur, Attorney on behalf of the applicant, who claimed that in view of several decisions of the adjudicating authority and Commissioner (Appeals) on similar cases wherein 40% abatement has been allowed to arrive at the value of the goods, same benefit should be extended to the present case. She also gave reference of Go .....

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relevant case records available in case file, oral & written submissions and perused the impugned Orders-in-Original and Orders-in-Appeal. 8. Government first takes up the application for condonation of delay in filing the Revision Application by the department after a delay of 16 days. The applicant vide their letter C. No. dated 14.11.2013 has submitted that the said Orders-in-Appeal was dispatched from the office of the Commissioner of Custom (Appeals) New Delhi on 08.05.2013 and was rec .....

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limit of 90 days under Section 129 DD (2), Hence, Government condones the said delay. 9. On perusal of records, Government observes that the applicant upon arrival at IGI Airport, Delhi from Hong Kong on 17.05.2011 had mis-declared the impugned goods carried by him which vide impugned Orders-in-Original dated 28.09.2012 were confiscated under Section Ill(d), (i), (l) &(m) ibid with option to redeem the same on payment of redemption fine of ₹ 2,50,000 /- under Section 125 and payment o .....

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filed Revision Application on the grounds stated in para 4.2. above. 10. Government observes that the applicant has contested the valuation of goods, pleaded for reduction of redemption fine and personal penalty and setting aside of demand of interest under Section 28 AB. The Department on the other hand is contesting the 20% abatement allowed by the impugned order and the reduction in redemption fine and penalty. 11. As regards the valuation of the goods, the Department had contended that allo .....

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e true value. The Apex Court in the case of Auto Stores Vs CC (Export), Mumbai has held that available NIDB data of comparable goods to be adopted for assessment-2014(305) ELT A 75(SC). Further it is observed that the applicant failed to produce any invoice or any other documentary evidence in support of his contention. As no supporting document to substantiate the value of memory cards has been produced, there is no infirmity in applying NIDB data which gives price of contemporaneous imports of .....

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e Customs Act, 1962 is not leviable in the instant case as the Section 28 invoked for the demand of duty is not applicable in this case in as much that there is no question of short levied or not levied or erroneously refunded duty under Section 28 of Act, ibid. Moreover, the confiscated goods were in possession of the department. 12.1 In this regard first proceeds to examine the relevant statutory provisions. 12.1.1 Chapter V of the Customs Act, 1962 deals with levy of, and exemption from, Cust .....

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apply in respect of goods not belonging to Government. From the plain reading of the Section it is clear that at the time of import, duty is chargeable on all the goods imported into the country irrespective of mode of import viz cargo, baggage, post etc. How these goods will be cleared upon import is provided for in separate Sections. While clearance of imported goods is covered under Chapter VII, clearance of baggage and post articles are covered under Chapter XI of the Act. 12.1.2. Section 28 .....

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on of facts. (a) the proper officer shall, within one year from the relevant date, serve notice on the person chargeable with the duty or interest which has not been so levied or which has been short-levied or short-paid or to whom the refund has erroneously been made, requiring him to Show Cause why he should not pay the amount specified in the notice; (b) the person chargeable with the duty or interest, may pay before service of notice under clause (a) on the basis of (i) his own ascertainment .....

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ribunal or any authority or any authority or in any other provisions of this Act or the rules made there under, the person, who is liable to pay duty in accordance with the provisions of Section 28 , shall, in additional to such duty,-be-liable to pay interest;-if any, at their fixed under sub-section (2), whether such payment is made voluntarily or after determination of the duty under that Section. (2) Interest at such rate not below ten per cent and not exceeding thirty-six percent, per annum .....

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mes payable consequent to the issue of an order, instruction or direction by the Board under Section 151 A; and (b) such amount of duty is voluntarily paid in full, within forty-five days from the date of issue of such order, instruction or direction, without reserving any right to appeal against the said payment at any subsequent stage of such payment". 12.1.4. Further, Government notes that Chapter XI of the Customs Act, 1962 specifies the special provisions regarding baggage, goods impor .....

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pect of such baggage under Section 77". 2.2 Government finds that in the present case the applicant failed to declare the impugned goods imported as baggage thereby violating the provisions of Section 77 of the Customs Act, 1962. The said goods were undisputedly chargeable to appropriate duty under Section 12 read with Section 78 of the Act. The applicant has imported the impugned goods chargeable to duty as baggage as laid down under Section 12 of the Customs Act, 1962 and failed to pay th .....

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y the impugned order on the duty demanded. 12.3. Government also finds no merit in the argument of the applicant that no interest is leviable on goods placed under seizure. Section 110 the Act ibid provides for seizure of goods liable for confiscation for improper importation into the country in terms of Section 111. Seizure and confiscation of goods does not absolve such goods from levy of duty and interest in turn is charged on such duty not paid. 12.4 Government observes that the order of CES .....

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ithout any justifiable reasons and the applicant without giving any grounds, has pleaded for reduction in fine and penalty. 13.1 Government notes that it is a fact on record that not only where the impugned goods concealed and not declared by the passenger, the same quantity of goods were recovered from another passenger Shri Munish Dhir who smuggled the goods on his behalf. Government further notes that the statement dated 18.05.2011 tendered by Shri Gagan Preet Singh, the main accused, has bee .....

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