TMI Blog2023 (10) TMI 451X X X X Extracts X X X X X X X X Extracts X X X X ..... The adjudicating authority can allow redemption under Section 125 of any goods which are prohibited either under the Customs Act or any other law on payment of fine but he is not bound to so release the goods. The appellant in his statement recorded in his own hand writing has informed that the gold was handed over by an unknown person in Dubai as arranged by Shri Mubash who also hails from his native place Thalasserry, Kerala and he has agreed to carry the gold due to his family financial conditions for a consideration of Rs.25,000/-. There was no retraction of the above statement recorded under Section 108 of the Customs Act, 1962, till the case came up for hearing before the Tribunal. The appellant being an ineligible passenger could not have brought gold and clear after declaration on payment of duty. As, at that relevant time even an eligible passenger can bring only 1 Kg gold in terms of Notification No. 12/2012-Cus dated 17.03.2012. The smuggling of gold by the appellant is proved beyond any doubt. So, it was rightly confiscated absolutely by the original adjudicating authority. Penalties under Section 112 and also 114AA of Customs Act, 1962 - HELD THAT:- A reading ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lines flight SV 778 from Riyadh via Dubai on 12.02.2015, the officers of DRI (Directorate of Revenue Intelligence), Chennai intercepted Shri Muhamed Nisham, occupying the seat No. 34 H, on the aero bridge. The modus operandi, as per the investigation, indicated that the said passenger would handover/drop the contraband at the toilet in the immigration hall for its retrieval and clearance without declaring to Customs and without payment of appropriate customs duty. 2.3 A scrutiny of the Customs Disembarkation Form (Declaration Form) indicated that nothing was mentioned against the column Total value of goods imported . According to the investigation, the appellant replied in the negative, when the officers enquired with him as to whether he brought any gold bars. On repeated enquiry, the appellant / passenger has admitted that he was in possession of four 1 kg gold bars with FG marking, FUJAIRAH GOLD, UAE, FINE GOLD, 995.0, 1000g etched on them with serial Nos. B002045, B002046, B002049 and B002061. 2.4 Shri Gopi Achary, a certified gold assayer was asked to assay the purity, origin and value of the said gold bars. It was certified that each piece of said gold bars was of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the passenger importing the gold is coming to India after a period of not less than six months of stay abroad; (b) the quantity of gold imported shall not exceed 5 Kilograms per passenger; (c) import duty on gold shall be paid in convertible foreign currency 2.8 Further, in terms of EXIM Code 98030000 under ITC (HS) classification of Export and Import Items 2009-2014, Import of all dutiable articles by a passenger in his baggage is Restricted and is subject to the fulfillment of the conditions imposed under the Customs Act, 1962, the Baggage Rules, 1998 and the Foreign Trade (Exemption from Application of Rule in Certain Cases) Order, 1993. 2.9 Further, according to Notification No. 12/2012-Cus dated 17.03.2012 (Sl. No. 321), gold bars, other than tola bars, bearing manufacturer s or refiner s engraved serial number and weight expressed in metric units, and gold coins having gold content not below 99.5%, imported by the eligible passengers; and gold in any form Including tola bars and ornaments are allowed to be imported upon payment of applicable rate of duty i.e., 10% or 15%, as the case may be, subject to the conditions prescribed at Sl.No. 35. As per the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rception, tremendous pressure was brought by the investigation officer who threatened him with slapping of COFEPOSA and he was compelled to give a statement under Section 108 of the Customs Act, 1962. 3.4 Due to continuous threat of arrest and preventive detention, he could not file any retraction to his statement. 3.5 The Adjudicating authority has issued the call letter dated 07.11.2015 intimating about the personal hearing which was fixed on 23.11.2015, 27.11.2015 or 30.11.2015 which was not in agreement with legal prescriptions that he could not avail the personal hearing as there was a flood in Chennai. As his inability was communicated telephonically to the officers, the adjudicating authority passed the Order-in-Original having 16 pages on the last date of the personal hearing itself which makes the order passed preconceived, predetermined and a programmed product without application of mind. As the impugned order has been issued without affording reasonable opportunity of being heard, the same is against the principle of natural justice and so, requires to be set aside. 3.6 The appellant has purchased the subject goods on credit from his friends in order to sell th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ashwini Kumar Alias Amanullah [2021 (376) ELT 321 (Tri.- Del.)] in support of his contention, for release of the gold on payment of duty which was seized from the appellant. He has also referred to the decision given by the Chennai Tribunal in the case of Shri Rajan Ran and Shri Vasu Arumugam Vs. Commissioner of Customs vide Final Order Nos. 40148-40149/2022 dated 25.04.2022. 4.3 The Ld. Authorised Representative Shri Harendra Singh Pal asserted the findings of the impugned order. He has submitted that the appellant / passenger is not an eligible passenger and a frequent flyer. In the statement given in his own hand writing before the officers which was recorded under Section 108, the passenger had admitted that he has attempted to smuggle the impugned gold for a consideration of Rs.25,000/- on behalf of one person by name Shri Mubash who was working in Dubai and who also hails from his native place and the officers coming to know of the intelligence, the appellant was intercepted on the Aerobridge itself as the modus operandi indicated that it would be handed over to some unknown person in the toilet near the immigration hall of Chennai International Airport. As the passenger ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods are liable for confiscation under Section 111 which reads as follows : SECTION 111. Confiscation of improperly imported goods, etc. - The following goods brought from a place outside India shall be liable to confiscation :- (a) any goods imported by sea or air which are unloaded or attempted to be unloaded at any place other than a customs port or customs airport appointed under clause (a) of section 7 for the unloading of such goods; (b) any goods imported by land or inland water through any route other than a route specified in a notification issued under clause (c) of section 7 for the import of such goods; (c) any dutiable or prohibited goods brought into any bay, gulf, creek or tidal river for the purpose of being landed at a place other than a customs port; (d) any goods which are imported or attempted to be imported or are brought within the Indian customs waters for the purpose of being imported, contrary to any prohibition imposed by or under this Act or any other law for the time being in force; (e) any dutiable or prohibited goods found concealed in any manner in any conveyance; (f) any dutiable or prohibited goods required to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d attempted to be smuggled into the country. It is also an admitted fact that he is not an eligible passenger. A perusal of the statement recorded under Section 108 of the Customs Act, 1962, in his own handwriting clearly indicate that he carried the gold for a promised consideration of Rs.25,000/- by Shri Mubash due to his family circumstances. At the relevant time, even an eligible passenger can legally bring only one kilogram of gold provided applicable duty is paid in convertible foreign currency. At the time of interception, he was found with 4 Kgs of gold and not required foreign currency towards the duty payment. He was found to be a frequent flyer to Dubai as admittedly he was travelling to Dubai since 2012 and returning to different Airports in to the country. Being an educated person and also due to frequent trips abroad, it is reasonable to draw an inference that he must be aware of the rules and procedures for carrying gold into the country. So, his contention that he was not given any opportunity to declare the gold brought by him lacks in merit and is not acceptable as he was not an eligible passenger and so cannot declare and pay applicable duty. His attempt to smugg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d under sub-section (1) is not paid within a period of one hundred and twenty days from the date of option given thereunder, such option shall become void, unless an appeal against such order is pending. Explanation. - For removal of doubts, it is hereby declared that in cases where an order under sub-section (1) has been passed before the date on which the Finance Bill, 2018 receives the assent of the President and no appeal is pending against such order as on that date, the option under said sub-section may be exercised within a period of one hundred and twenty days from the date on which such assent is received . 7.5 From the above, it is clear, the Adjudicating Authority has no discretion in respect of goods which are not prohibited goods and he is bound to give an option of redemption. In case of prohibited goods, such as, the gold in this case, the Adjudicating Authority may allow redemption or may not allow redemption. There is no bar on the Adjudicating Authority allowing redemption of prohibited goods. The reason for such discretion left to the adjudicating authority is evident. In case of prohibited goods, the nature of the goods and the nature of the prohibit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e import is prohibited is discretionary and the adjudicating authority may or may not allow it. (c) Import of gold is not absolutely prohibited but is restricted. (d) The owner or the person from whom the goods are seized cannot claim as a matter of right that the prohibited goods must be allowed to be redeemed as held by Hon ble High Court of Madras in the case of Samyanathan Murugesan and by Hon ble High Court of Kerala in case of Abdul Razak. Both these judgments were upheld by the Hon ble Supreme Court. 7.8 The appellant has advanced a plea that there was no mis-declaration or concealment on his part and he should be given an opportunity to declare and pay appropriate Customs duty on the gold brought by him. He has submitted that he has availed loans from his friends to purchase this gold and his intention was to sell to the jewellery manufacturers in the country. The appellant in his statement recorded in his own hand writing has informed that the gold was handed over by an unknown person in Dubai as arranged by Shri Mubash who also hails from his native place Thalasserry, Kerala and he has agreed to carry the gold due to his family financial conditions for a con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Ld. Advocate for the appellant has vehemently put forth that the impugned gold should be released on payment of applicable Customs duty having recorded the statement under threat of COFEPOSA and the original adjudicating authority having violated the principles of natural justice by fixing three dates for personal hearing through a single letter which he could not avail due to the flood situation in Chennai. 7.11 We have perused the decisions. In the case of Rajan Ran (supra), the passenger was intercepted and gold was recovered while he was going through the green channel. The passenger was found to be an eligible passenger and also in a possession of adequate foreign currency for payment of the duty on the imported gold. Whereas in this case, the appellant is not an eligible passenger, he could not have been able to declare and clear as at that relevant time even an eligible passenger can legally bring only 1kg of gold and on payment of applicable duty is convertible foreign currency. He has attempted to smuggle in 4Kg of gold and he was not in possession of required foreign exchange toward the applicable duty on quantity of 4Kg of gold. So, the facts are distinguishable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same will make the goods imported as prohibited goods within the meaning of Section 2(33) of the Act, which reads as follows :- 2(33) Prohibited goods means any goods the import or export of which is subject to any prohibition under this Act or any other law for the time being in force but does not include any such goods in respect of which the conditions subject to which the goods are permitted to be imported or exported have been complied with. 6. After hearing both sides and after considering the statutory provisions, we do not think the appellant, as a matter of right, can claim release of the goods on payment of redemption fine and duty. Even though gold as such is not a prohibited item and can be imported, such import is subject to lot of restrictions including the necessity to declare the goods on arrival at the Customs Station and make payment of duty at the rate prescribed. There is no need for us in this case to consider the conditions on which import is permissible and whether the conditions are satisfied because the appellant attempted to smuggle out the goods by concealing the same in emergency light, mixie, grinder and car horns etc. and hence the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uggling. So, we uphold the decision of the adjudicating authority s decision on absolute confiscation of the smuggled gold in the instant case. 9.1 Having rendered the gold liable for confiscation by his various acts of commission and omission, the appellant is liable for penal action under Section 112 of the Customs Act, 1962. The appellant was imposed with penalties under Section 112 and also 114AA of Customs Act, 1962 by the impugned order No. 364/2015 dated 30.11.2015. Section 112 and 114AA of the Customs Act, 1962, reads as follows:- 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 concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing, or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation under section 111, shall be liable, - (i) in the case of goods in respect of which any prohibition i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Section 112 of the Customs Act, 1962. Whereas, penalty under Section 114AA is imposable if any person knowingly or intentionally makes, signs or uses or causes to be made, signed or used any declaration, statement or document which is false and incorrect. The appellant has prepared the Customs Declaration Form wherein nothing was written against column- Total value of dutiable goods imported. His argument centers around that as he was intercepted at the Aerobridge and so, there was no opportunity to declare the gold brought by him. Being an ineligible passenger this argument of the appellant that he could have declared the gold attempted to be smuggled by him but for his interception on the Aerobridge does not have any factual basis and so not acceptable. Having rendered the gold liable for confiscation penalty under Section 112 of the Customs Act, 1962, penalty is imposable and has been rightly imposed. In the Customs Declaration Form which has been filed in, he had written nothing against the column of total value of goods imported . So, penalty under Section 114AA is imposable. As such penalties imposed under Section 112 114AA of the Customs Act, 1962 are in accordan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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