TMI Blog2020 (12) TMI 1396X X X X Extracts X X X X X X X X Extracts X X X X ..... n 110 of the Act is prepared, the same will render the seizure of the goods by itself illegal and the authority u/s 124 of the Act will also have no jurisdiction thereafter to proceed with the confiscation proceedings or with the imposition of penalty. The words used in Section 112 and Section 124 respectively of the Act are any goods and any person . These words are of the widest import and they cannot be given a restricted meaning. There is nothing in these provisions to indicate that the goods in respect of which an order of confiscation or penalty can be passed u/s 111 and Section 112 respectively must be the goods seized under the provisions of Section 110 of the Act. It would be too much for this Court to take the view that in the absence of a separate seizure memo the authorities could not have proceeded further or assumed jurisdiction for the purpose of confiscation of the goods. To confiscate would mean to adjudge goods or property to be forfeited to the public domain and to deprive the owner of the right of ownership of the same. It cannot be gainsaid that adjudication of confiscation of goods can be recorded even without seizure of the goods. Similarly, personal penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oms Act, 1962 or any other law, for the time being in force and when such goods squarely fall within the definition 'illegal import', or the other provisions in the statute, dealing with prohibition/restriction, the same are to held as, prohibited goods and liable for confiscation. If there is a fraudulent evasion of the restrictions imposed, under the Customs Act, 1962 or any other law for the time being in force, then import of gold, in contravention of the above, is prohibited. For prohibitions and restrictions, Customs Act, 1962, provides for machinery, by means of search, seizure, confiscation and penalties. Act also provides for detection, prevention and punishment for evasion of duty. The expression, 'subject to prohibition in the Act and any other the law for the time being in force.' in Section 2(33) of the Customs Act, has wide cannotation and meaning, and it should be interpreted, in the context of the scheme of the Act, and not to be confined to a narrow meaning that gold is not an enumerated prohibited good to be imported into the country. If such narrow construction and meaning have to be given, then the object of the Customs Act, 1962, would be defeat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /16/RA 5760 dated 30.9.2020 passed by the Ld. Revisionary Authority on behalf of Government of India, in so far as penalty under section 112(b) of confiscation of Aluminum Coated Gold Wires allegedly seized vide Panchnama dated 27.4.2014, is confirmed (Annexure-E). C. Drop the penalty imposed under section 112(b) of Customs Act, 1962, or alternatively, reduce the same to a reasonable amount, D. Release and return back to the petitioner the impugned goods (Aluminum Coated Gold Wire) in terms of section 125(1) of Customs Act, 1962, allowing the same to be re-exported. E. Grant any other relief/further reliefs as deemed in the interest of the justice, may please be granted. 2. We may borrow the facts giving rise to this writ-application straightway from the facts recorded in the Order in Original passed by the Joint Commissioner, Customs, Ahmedabad. The noticee referred to herein under is the writ-applicant before us. We quote it as under : A passenger namely Shri Abdul Husain Saifuddin Hamid (hereinafter referred to as the noticee ) holding Indian Passport No.Z2510189 and residing at 20/595 Hindu Mochi Mohalla, Paani Gram Chowk, Sadar Kotwali, Ajmer, Rajasthan, presently residing at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted wire, a yellow coloured metal which appeared to be gold, was seen. 1.4 All the Aluminium powder coated wires, appearing to be Gold wires totally weighing 1753.54 grams, were removed from the two bags of the noticee. 1.5 The Government Approved Valuer, Shri Soni Kartikey Vasantrai was called for examining the authenticity and valuation of the said goods, who tested the said Aluminium powder coated Gold Wires and confirmed that all the said wires were of pure Gold having purity of 995 and totally weighed 1753.540 grams, valued at Rs.52,60,620/- (Local Market Value) and Rs.45,95,116/- (Tariff Value). 1.6 The noticee vide his statement dated 27.04.2012 had confessed before the panchas that he had concealed Gold in his two bags i.e. one hand bag and another in check-in bag; that the bags were handed over to him by Shri Murtaza Merchant (his brother in-law); that a message received from Murtaza Merchant Mobile (No.+971503596077) on his mobile (No.09993122052) that Jeetubhai s person coming from Baroda to receive the bags; that the two bags were to be handed over to Jeetubhai Soni having mobile No. 09407461148. During the Panchnama a phone call was received by the noticee from Jeetubh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tody at Sabarmati jail, Ahmedabad till 28.04.2014. 1.10 Statement of the noticee was recorded on 27.04.2014 under section 108 of Customs Act, 1962, wherein he stated that he did not know about the gold wires as he got empty bags, i.e., one hand bag and second Trolley Bag from his brother-in-law, Shri Murtaza Merchant residing at Deira Dubai; he had received a message from his brother-in-law, through mobile No. 97150596077 that Jeetubhai s person coming from Baroda to receive the bags; the said two bags i.e. one hand bag and another check-in bag were to be delivered to Jeetubhai Soni having Mobile No.9407461148; he had also received a phone call from Jeetubhai Soni to deliver the said 2 bags to the person namely KK, who was coming from Vadodara. In between a call from mobile no.09879112276 introducing himself as Kanubhai H.Soni was received who asked him where to receive the bags. He accepted that he has visited India six times, since 11.06.2013 to 21.03.2014, as shown in the panchnama. On being asked about the said gold wires he stated that he did not know about the said gold wires; that he was coming to Ahmedabad to participate in religious function i.e. ORAS at Vohora s Roja, Sar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons are also engaged in the business. He was shown panchnama dated 27.04.2014 and he agreed with its contents. He further stated that on 27.04.2014 about 07.30 hrs he came to Ahmedabad for social work and thereafter about 09.00 hrs reached Shambu's Coffee Bar near Indira Bridge, Ahmedabad to receive two bags from Shri Abdul Hussain Saifuddin Hamid after contacting him on his cell phone No.09993122052. Upon being asked whether he knew Shri Abdul Hussain Saifuddin Hamid he stated that he did not know him or never come in touch with him in the past; he came to take delivery of the two bags from him on the direction given by Shri Jeetubhai Soni from his cell phone No.09407461148. Regarding Shri Jeetubhai Soni, he stated that he was residing at Ali Rajpur, Near Gujarat Border, Madhya Pradesh and looking after two jewellery shops at Ali Rajpur, viz. Payal Jewellers, etc. since the last four years whose owner was Shri Chandubhai Soni, and was presently at Australia on tourist visa for two months; he came to know Shri Jeetubhai Soni since last one year through his relative whose name he did not remember at present; he met him last before one week at his Vadodara shop. On being asked as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the facts and circumstances discussed herein above, it appeared that the noticee was involved in the smuggling of Gold from Dubai into India, with a malafide intention to evade the payment of Customs duty. It further appeared that the said Gold totally weighing 1753.54 grams was brought for commercial purpose. Thus, the Gold brought in by the noticee cannot be construed as bonafide baggage within the meaning of section 79 of the Customs Act, 1962 read with para 2.20 of Foreign Trade Policy (2004-2009). As per para 2.20 of the Foreign Trade policy, formulated under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992, a passenger is allowed to import bonafide household goods and personal effect only, as his bonafide baggage. Import of goods in commercial quantity with intent to earn profit is not covered under the ambit of bonafide baggage and hence the import of such goods is not permitted through baggage mode , Therefore, it appeared that the noticee attempted to smuggle the above said goods without declaring it in the dis-embarkation slip in contravention of the provisions of Baggage Rules 1998, as amended. 1.17 The aforesaid act of the noticee, importing the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same in the Indian Customs Declaration Form submitted by him. From the above, it is evident that the noticee had intentionally signed wrong declaration in order to evade the payment of customs duty and hence also made himself liable for penalty under Section 114AA of the Customs Act, 1962. 3. The aforesaid led to issue a show-cause notice under Section 124 of the Customs Act, 1961, calling upon the writ-applicant to show-cause as to why : (i) The 1753.54 grams Aluminum Coated Gold Wire valued at Rs.52,60,620/- (Market Value) Rs.45,95,116/- (Tariff Value}, placed under seizure under panchnama dated 27.04.2014, should not be confiscated under Section 111(l) and 111(m) of the Customs Act, 1962; (ii) The packing material, viz. 2 nos. of broken bags used for concealment of the said goods, having no commercial value, placed under seizure under panchnama dated 27.04.2014 should not be confiscated under Section 118(a) and 119 of the Customs Act, 1962; (iii) Penalty should not be imposed on him under Section 112(b) of the Customs Act, 1962 for the omissions and commissions mentioned herein above; (iv) Penalty should not be imposed upon him under Section 114AA of the Customs Act, 1962 f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f liable for penalty under Section 114AA of the Customs Act, 1962. 8. The appellant contended that since the gold wires in question are not prohibited item for the purpose of import, the same could not have been absolutely confiscated; gold is not a prohibited item for import as evident from perusal of list of prohibited items for import, therefore the gold in question may be released. I find that in this case the appellant returned to India within thirty seven days (approx.), hence he did not qualify as an eligible person to import gold and therefore the seized items are liable for absolute confiscation. I also find that as per the judgment of Hon'ble High Court in the case of Samynathen Murugesan [2009 (247) ELT 21 (Mad.)] when gold is attempted to be brought by way of concealment the same is liable for absolute confiscation. I also find that even though the gold as such is not a prohibited item and can be imported, but such import is subject to the restrictions, including the RBI regulations. Hence, the order of absolute confiscation is correct and justified. 9. The appellant contended that he did not want to sell the gold into India after the same is handed over to him. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the gold to the authorities and if he was not intercepted before the exit, the Applicant would have taken out the gold without payment of customs duty. The applicant on one hand claims that he is a victim of a smuggling racket and on the other hand pleaded for re-export. Having accepted that he is a victim of a smuggling racket he is not the owner of the impugned gold. 8. The Government therefore holds that the Original Adjudicating Authority has rightly confiscated the gold absolutely and imposed a penalty. The Government also holds that Commissioner (Appeals) has rightly upheld the absolute confiscation by the original adjudicating authority. Government however, notes that when penalty is imposed under section 112 no penalty is required to be imposed under section 114AA of the Customs Act, 1962 for the same offence. The penalty imposed under section 114AA of the Customs Act, 1962 therefore is required to be set aside. 9. (The Government therefore finds no reason to interfere with the impugned Order-in-Appeal. The Appellate order is upheld as legal and proper. The penalty of Rs.5,00,000/- (Rupees Five lakhs) imposed under section 114AA of the Customs Act,1962 is set aside. 7. Bein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the goods are liable to be confiscated. 11. The aforesaid takes us now to record the second submission of Mr.Shastry. Mr.Shastry would argue that while the show-cause notice under Section 124 of the Act clearly stated that the offence was one relatable to Section 112(b) of the Act, the adjudicating authority went on to discuss Section 112(a) of the Act. According to Mr.Shastry, the reading of the two sub-sections of Section 112 of the Act make it clear that in sub-section (a) the element of mens rea is not there, whereas in sub-section (b) the mens rea is an essential part and this is one of the exceptions to the general rule that in the Financial Acts, the requisite mens rea is presumed. In short, the argument of Mr.Shastry is that when the Customs Department has alleged violation of Section 112(a) of the Act, the onus would be upon them to establish the presence of the element of mens rea, which they have miserably failed to even prima facie indicate. He would argue that the department has failed to adduce any evidence to even remotely suggest that the gold in question was concealed with a dishonest intention. 12. According to Mr.Shastry, the penalty could have been imposed on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses as well as the Air Customs Officers on duty at the SVPIA, Ahmedabad. We may quote the relevant part of the panchnama as under : The goods are placed under seizure by the officers of customs under the reasonable belief that the subject Aluminum Powder coated Gold Wires are not a part of the permissible Baggage and are liable for confiscation. Consequently, in light of above mentioned contravention of Rules and Regulations of the Customs Baggage Rules 1998, as amended, the aforesaid items (Aluminum Powder coated Gold Wires along with its packing materials) recovered from the passenger as described in the panchnama, are placed under Seizure under the provisions of Customs Act, 1962 under the reasonable belief that the same are liable for confiscation under the provisions of the Customs Act, 1962 as the said goods were attempted to be smuggled by not declaring the same before the Customs. The items mentioned in Annexure-A and bags are placed under seizure for further investigation and other items such as clothes, food and other miscellaneous items after scrutiny are returned to Shri Abdul Husain Saifuddin Hamid in presence of we independent panchas. The said Aluminum Powder coated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve satisfaction that the goods is liable to be confiscated under the Act has been specifically recorded in the panchnama. The moot question is, whether the omission or failure on the part of the concerned officer to draw a separate seizure memo along with the panchnama would render the seizure illegal and thereby vitiate all the subsequent proceedings right upto the confiscation of the goods seized. 110. Seizure of goods, documents and things. (1) If the proper officer has reason to believe that any goods are liable to confiscation under this Act, he may seize such goods: Provided that where it is not practicable to seize any such goods, the proper officer may serve on the owner of the goods an order that he shall not remove, part with, or otherwise deal with the goods except with the previous permission of such officer. (2) Where any goods are seized under sub-section (1) and no notice in respect thereof is given under clause (a) of section 124 within six months of the seizure of the goods, the goods shall be returned to the person from whose possession they were seized: Provided that the aforesaid period of six months may, on sufficient cause being shown, be extended by the Colle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition of penalty. The words used in Section 112 and Section 124 respectively of the Act are any goods and any person . These words are of the widest import and they cannot be given a restricted meaning. There is nothing in these provisions to indicate that the goods in respect of which an order of confiscation or penalty can be passed under Section 111 and Section 112 respectively must be the goods seized under the provisions of Section 110 of the Act. It would be too much for this Court to take the view that in the absence of a separate seizure memo the authorities could not have proceeded further or assumed jurisdiction for the purpose of confiscation of the goods. To confiscate would mean to adjudge goods or property to be forfeited to the public domain and to deprive the owner of the right of ownership of the same. It cannot be gainsaid that adjudication of confiscation of goods can be recorded even without seizure of the goods. Similarly, personal penalty can be imposed even when the goods have not been seized. Such a situation is contemplated by clause (b) of Section 112 of the Act. 26. In the aforesaid context, we may refer to and rely upon a Division Bench decision of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 known 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 is in force under this Act or any other law for the time being in force, to a penalty not exceeding five times the value of the goods or one thousand rupees, whichever is the greater; (ii) in the case of dutiable goods, other than prohibited goods, to penalty not exceeding five times the duty sought to be evaded on such goods or one thousand rupees, whichever is the greater. 124. Issue of show-cause notice before confiscation of goods, etc. No order confiscating any goods or imposing any penalty on any person shall be made under this Chapter unless the owner of the goods or such person- (a) in given a notice in writing informing him of the grounds on which it is proposed to confiscate the goods or to impose a pena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... then arises is whether the petitioner is entitled to return of the goods seized, once the order of confiscation is passed under Section 110 of the Act. So far as Section 110 is concerned it deals with the seizure of the goods and the return thereof. In other words if the said provisions are not satisfied the goods seized have to be returned. Section 110 of the Act deals with the seizure of the goods. Section 124 of the Act deals with the confiscation and imposition of the penalty. The provisions relating to the seizure of the goods and those relating to the confiscation of the goods or imposition of penalty stand on different footing. Section 124 of the Act does not lay down any period within which the notice required by it has to be given. The period laid down in Section 110(2) affects only the seizure of the goods and not the validity of notice. In the present case after proceeding of seizure the proceedings for confiscation and imposition of penalty were proceeded with and the proceedings ended in the order of confiscation and imposition of penalty vide order Ex. D . As the goods have already been ordered to be confiscated the question of return of goods after the period of six ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions contained therein invest powers on certain officers to prevent disposal of goods in respect of which the proper person entertains a reasonable belief that the goods are smuggled goods. In Chapter XIV substantive provisions are enacted. In order that the substantive provisions may not be rendered ineffective the provisions are enacted in Chapter XIII so that suspected smuggled goods may not be disposed of taking at the same time abundant caution that individuals may not be put to more inconvenience than what is necessary. It is necessary to consider the provisions contained in Chapter XIV of the Act. Section 111 of the Act describes the goods which can be confiscated. Section 112 provides for penalty for improper importation of goods. Section 113 provides for confiscation of goods attempted to be improperly exported. Section 114 provides for penalty for attempt to export goods improperly. Section 115 provides for confiscation of conveyances and Section 116 provides penalty for not accounting the goods. Section 117 is a general provision providing for penalty for contravention which is not expressly provided. Section 118 provides for confiscation of packages and their cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istence of power . The Gujarat High Court in Baboo Ram Hari Chand v. Union of India (supra) negatived the plea of the Department that seizure and confiscation were one and same thing. In that case the panchnama was projected as the seizure order. The Court observed that such composite order is unheard of . It further observed: 27. Technically, asking the party to submit fresh PD Bonds for a period of six months on one hand and proceeding to seize the goods on the other hand may not perhaps be faulted with, however, burden lies on the authority to explain rationale to rush into seizure/ confiscation of the goods in such circumstances, the reason is the 'proper officer' cannot proceed to seize the goods under Section 110 of the Act unless he has reason to believe. The authority would exercise drastic powers to seize the goods only in case wherein it has reason to believe that the goods is liable to be confiscated. The powers to seize and the power to confiscate are quite drastic powers. Little elaboration would show apparent inconsistency in the conduct of the respondent, from which it can be said that formation of belief for seizure by the respondent is vitiated.... 23. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mission 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 is in force under this Act or any other law for the time being in force, to a penalty not exceeding five times the value of the goods or one thousand rupees, whichever is the greater; (ii) in the case of dutiable goods, other than prohibited goods, to penalty not exceeding five times the duty sought to be evaded on such goods or one thousand rupees, whichever is the greater. 31. It is argued that if the penal action is proposed to be taken and proceedings are initiated, which are likely to culminate in the imposition of penalty, then the authorities must be clear in their mind as to whether clause (a) or clause (b) of Section 112 would apply or both, failing which the proceedings would be liable to be quash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Customs Act, 1962; (iii) Penalty should not be imposed on him under Section 112 (b) and 114AA of the Customs Act, 1962 for the omissions and commissions mentioned herein above. 22. The said Noticee must state in his written reply as to whether he desires to be heard in person, if no reply to this notice is received within 30 (thirty) days from the date of receipt of this notice or if he fails to appear for the personal hearing on the date and time intimated to him, the case is liable to be decided on merits on the basis of evidences available, without any further reference to him. 33. The show-cause notice referred to above explicitly talks about Section 112(b) of the Act, 1962. It has been specifically stated in the show-cause notice while calling upon the writ-applicant to show-cause as to why penalty should not be imposed on him under Section 112(b) of the Act having regard to the mode and method attempted by the writ-applicant to smuggle the gold by clandestinely concealing the same without payment of the customs duty. The writ-applicant has invoked the writ jurisdiction of this High Court under Article 226 of the Constitution of India, and in such circumstances, it woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remedial and coercive in its nature, and is far different from the penalty for a crime or a fine or forfeiture provided as punishment for the violation of criminal or penal laws. We are in agreement with the above statement. Therefore, we hold, to the limited extent that mens rea has application in tax default cases, it would stand established, if the conduct to the assessee is found to be blameworthy, within the meaning of the particular provision of the given tax statute. Where a finding is recorded on facts about the existence of the blameworthy conduct, which the Legislature has treated as an offence or a default on the part of the assessee, like the making of a false representation , it would attract the provisions of Section 10(b) of the Act and no further finding would be required to be recorded about the existence of mens rea on the part of the assessee, as it would be inherently included in the earlier finding. We, therefore, cannot accept the proposition that even if a finding has been recorded on facts by the competent authorities that an assessee has made a false representation , as contemplated by Section 10(b) of the Act, in the absence of an additional finding that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch is not only regulatory, but prohibitory in nature, the mandate contained therein being in the larger interests and general welfare of the Nation. 12. The learned Senior Counsel for the applicant repeatedly urged that if the element of mens rea is held to be irrelevant for purposes of Sections 111 and 112 of the Act, the Authorities enforcing law are likely to act arbitrarily and unreasonably exposing even innocent persons to severe penalties. We are unable to appreciate the reason of it. The Adjudication proceedings are quasi judicial in nature with forums higher in the hierarchy including a Judicial Tribunal, expected to act judiciously and the Courts of Justice at the State and National level and cases of any such arbitrary exercise of power could be effectively contained and remedied, but the taking of the other view, in our opinion, will make the country full and flooded with smuggling spree activities undermining the economy of the Nation and render ineffective the enforcement of the laws in question. This reasoning of ours is even de hors the interpretation we were obliged to place on the scope of Sections 111 and 112 of the Act, in tune with the law declared by the Apex C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e petitioner before the High Court. The question before the High Court was, whether in the facts and circumstances of the case, the Tribunal was right in remanding the matter with a direction to the Commissioner to invoke the power under Section 125 of the Customs Act for redemption of the goods on payment of fine ? The facts of the said case are almost identical to the facts of the case in hand. We quote the relevant observations thus : 3. The learned Senior Central Government Standing Counsel submitted that a person working abroad is eligible to import gold weighing upto 7.075 kgs as per the Explanation to notification 31/2003-Cus.dated 01-03-2003. An eligible passenger is one who has coming to India after a period of not less than 6 months of staying abroad and short visits upto a total of 30 days shall be ignored. The learned Senior Central Government Standing Counsel submitted that the respondent herein gone to Singapore on 19-04-2005 and returned to India on 12-07-2005, that is, he had stayed only for about 2 months and prior to 19-04-2005 had visited abroad was during 2004. There were no short visits. Therefore, the respondent was not an eligible passenger to bring gold. 4. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 2001 dated 03-12-2004; Prince Anthony Sagayam Vs. The Deputy Commissioner of Customs in W.A.No.758 and 563 of 2006 dated 25-01-2008. 5. Mr. A. Thiagarajan, learned Senior Counsel appearing for the respondent submitted that the goods were only restricted goods. Gold was not a prohibited item. Therefore, the officer was under a mandatory duty to give option to the person found guilty to pay in lieu of confiscation. He relied on 1997 (91) E.L.T. 227 (A.P.) (Shaik Jamal Basha Vs. Government of India). 6. Section 2(33) of the Customs Act defines prohibited goods. It reads as follows: (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; 7. Section 11 empowers the Central Government to prohibit either absolutely or subject to such conditions to be fulfilled before or after clearance the import or export of the goods of any specified direction by issuing a notification in this behalf. The effect of interpretation of the w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cting or otherwise controlling , we cannot cut down the amplitude of the word any prohibition in Section 111(d) of the Act. Any prohibition means every prohibition. In other words all types of prohibitions. Restriction is one type of prohibition. From item (I) of Schedule I, Part IV to Import Control Order, 1955, it is clear that import of living animals of all sorts is prohibited. But certain exceptions are provided for. But nonetheless the prohibition continues. Therefore, if we apply this judgment to the notification, the notification contemplates import of gold subject to certain conditions. The relevant paragraphs of Import trade control order are extracted as follows: Import of Gold permitted as Baggage. Import of gold in any form, including ornaments but excluding ornaments studded with stones or pearls, is allowed to be imported as part of baggage by passengers of Indian origin or a passenger holding a valid passport issued under the Passport Act subject to the following conditions: that the passenger importing the gold is coming to India after a period of not less than six months of stay abroad; the quantity of gold imported shall not exceed 10 Kg, per passenger import dut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of stay abroad; and short visits, if any, made by the eligible passenger during the aforesaid period of six months shall be ignored if the total duration of stay on such visits does not exceed thirty days and such passenger has not availed of the exemption under this notification or under the notification being superseded at any time of such short visits. ﾵ Therefore, the gold brought in could be cleared on payment of a concessional rate of duty if the respondent is an eligible passenger. The respondent is not a eligible passenger. The learned Senior Counsel appearing for the respondents submitted that the respondent had been in Singapore from 1993. We are not concerned with the date on which he first went to Singapore. For the purpose of this exemption or this concession, he should have come to India after a period of not less than six months stay in Singapore and short visits made by the eligible passenger during the aforesaid period of six months shall be ignored if the total duration of stay on such visits does not exceed thirty days. He had gone to Singapore on 19-04-2005 was coming to India on 12-07-2005 i.e., after a period of less than six months. So he was not an e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the patent fraud committed in importing the goods, the Additional Collector has found that the goods had been imported in violation of the provisions of Import (Control) Order, 1955 read with Section 3(i) of the Import and Export (Control) Act, 1947. In the circumstances he considered it appropriate to direct absolute confiscation of the goods which indicates that he did not consider it a fit case for exercise of his discretion to give an option to pay the redemption fine under Section 125 of the Act. The Tribunal also felt that since this was a case in which fraud was involved, the order of the Additional Collector directing absolute confiscation of the goods did not call for any interference. We do not find any reason to take a different view. In the present case too, the concealment had weighed with the Commissioner to order absolute confiscation. He was right, the Tribunal erred. 13. In the result, the substantial question of law is answered in favour of the appellant. Appeal allowed and the order of the Tribunal is set aside. However, there will be no order as to costs. 39. The aforesaid decision in Samynathan Murugesan (supra) has been affirmed by the Supreme Court in Samyn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y specified description. The notification can be issued for the purposes specified in sub-section (2). Hence, prohibition of importation or exportation could be subject to certain prescribed conditions to be fulfilled before or after clearance of goods. If conditions are not fulfilled, it may amount to prohibited goods. This is also made clear by this Court in Sheikh Mohd. Omer v. Collector of Customs, Calcutta and others [(1970) 2 SCC 728], wherein it was contended that the expression 'prohibition' used in Section 111(d) must be considered as a total prohibition and that the expression does not bring within its fold the restrictions imposed by clause (3) of the Import Control Order, 1955. The Court negatived the said contention and held thus:-- What clause (d) of Section 111 says is that any goods which are imported or attempted to be imported contrary to any prohibition imposed by any law for the time being in force in this country is liable to be confiscated. Any prohibition referred to in that section applies to every type of prohibition . That prohibition may be complete or partial. Any restriction on import or export is to an extent a prohibition. The expression any p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsidered to be prohibited goods; and (b) this would not include any such goods in respect of which the conditions, subject to which the goods are imported or exported, have been complied with. This would mean that if the conditions prescribed for import or export of goods are not complied with, it would be considered to be prohibited goods. This would also be clear from Section 11 which empowers the Central Government to prohibit either 'absolutely' or 'subject to such conditions' to be fulfilled before or after clearance, as may be specified in the notification, the import or export of the goods of any specified description. The notification can be issued for the purposes specified in Sub-section (2). Hence, prohibition of importation or exportation could be subject to certain prescribed conditions to be fulfilled before or after clearance of goods. If conditions are not fulfilled, it may amount to prohibited goods. This is also made clear by this Court in Sheikh Mohd. Omer v. Collector of Customs, Calcutta and others [(1970) 2 SCC 728], wherein it was contended that the expression 'prohibition' used in Section 111(d) must be considered as a total prohibiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 55); provided that the national of Pakistan or Bangladesh shall be deemed to be not of Indian origin. A spouse (not being a national of Pakistan or Bangladesh) of a person of Indian origin shall also be deemed to be of Indian origin. 9. In view of meaning of the word prohibition as construed laid down by the Supreme Court in Om Prakash Bhatia case we have to hold that the imported gold was prohibited goods since the respondent is not an eligible passenger who did not satisfy the conditions. The impugned order deserves to be set aside. 10. In 1992 (61) ELT 372(cited supra), the Supreme Court directed the Collector to consider the exercise of discretion. In this case, the Collector had rightly considered it and refused to give the option. 42. In Abdul Razak v. Union of India reported in 2012 (275) ELT 300 (Ker)(DB), there was an attempt by the appellant therein to smuggle gold, weighing over 8 Kgs, by concealing the same, in emergency light, mixie, grinder and car horns, etc. The authorities seized the same. Adjudicatory proceedings ended in confiscation. Contention of the appellant therein, before the High Court, was that Section 125 of the Customs Act, 1962, does not provide for co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her 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'. When there is a violation of statutory prohibitions, mentioned in Sections 11 and 11A of the Customs Act, 1962 or any other law, for the time being in force or restrictions imposed, such restrictions would also encompass the expression, any prohibition. 45. In Commissioner of Customs, Chennai v. Brinda Enterprises reported in 2010 (262) ELT 239 (Mad.), the company mis-declared the goods and there was no specific licence or certificate of registration. The adjudicating authority ordered for confiscation. Matter went upto the Tribunal, which remanded the same, for a decision, which ultimately landed up in the High Court. After considering the rival contentions therein, and Om Prakash Bhatia's case (cited supra), at Paragraph 20, a Division Bench of the Madras High Court, held as follows: 20. If we employ the meaning of the word 'prohibition' as was done in Om Prakash Bhatia's case we have to hold that the imported 'druid' was 'Prohibited goods' since ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ations. A Writ Petition has been filed, seeking for a direction to the respondent therein to release the seized imported goods, under the Mahazar. Accepting the contention of the revenue that since the passenger had attempted to smuggle goods into India, by concealing the same in his person, as well as in his hand baggage and checked-in-baggage, without declaring the same to the Customs, in order to evade payment of Customs duty, the afore-stated goods, are held liable for confiscation, under the provisions of Section 111(d) and 111(1) of the Customs Act, 1962 and hence, cannot be released provisionally under Section 110 of the Customs Act, 1962, at Paragraphs 13 and 14, a learned Single Judge of the Madras High Court held as follows: 13. Further, when the goods were confiscated under Section 111(d) and 111(I) of the Customs Act, 1962, the question of provisional release under Section 110 of the Customs Act, 1962, does not arise. Therefore, this Court is of view that only after the completion of adjudication process, the adjudicating authority would decide whether the goods confiscated under Section 111(d) and 111(1) of the Customs Act, 1962, could be released or not. 14. According ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elf or any other law for the time being in force provides otherwise. The rate of duty is fixed by the Customs Tariff Act, 1975. Import and Imported Goods means that if goods are brought into India, meaning thereby into the territory of India from outside, there is import of goods and the goods become imported goods and become chargeable to duty upto the moment they are cleared for home consumption. The word 'importer' has been defined in the Act as importer in relation to any goods at any time between their importation and the time when they are cleared for home consumption includes any owner or any person who holding himself out to be importer. The word 'smuggling', in relation to goods, means any act or omission which will render such goods liable to confiscation under Section 111 or Section 113 of the Act. (8) Section 11 of the Act enables the Central Government to prohibit importation or exportation of goods either absolutely or subject to conditions as specified in the notification, the import or export of the goods of any specified description. Section 11A to 11G speaks of detention of illegally imported goods and prevention of the disposal thereof. Section 12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 'imported goods' for the purpose of benefit of the exemption notification. We are of the view that 'smuggled goods' will not come within the definition of 'imported goods' for the purpose of the exemption notification, for the reason, the Act defines both the expressions looking at the different definitions given to the two classes of goods: imported and smuggled, and we are of the view that if the two were to be treated as the same, then there would be no need to have two different definitions. (14) In order to understand the true meaning of the term 'imported goods' in the exemption notification, the entire scheme of the Act requires to be taken note of. As noted above, 'imported goods' for the purpose of this Act is explained by a conjoint reading of Section 2(25), Section 11, Section 111 and Section 112. Reading these Sections together, it can be found that one of the primary purposes for prohibition of import referred to the latter is the prevention of smuggling [See Section 11(2)(c)]. Further, in the light of the objects of the Act and the basic skeletal framework that has been enumerated above, it is clear that one of the principal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time being in force and in all cases, whether there is either total prohibition or restriction, in the light of the judgment of the Supreme Court in Om Prakash Bhatia's case, such goods should fall within the definition of Prohibited goods. When import is in contravention of statutory provisions, in terms of Sections 11 or 11A of the Customs Act, 1962 or any other law, for the time being in force and when such goods squarely fall within the definition 'illegal import', or the other provisions in the statute, dealing with prohibition/restriction, the same are to held as, prohibited goods and liable for confiscation. 54. Under Section 123 of the Customs Act, 1962, if the importer fails to discharge the burden that the goods seized from him, were not smuggled, then there is a strong reason for the proper officer to seize such goods. Smuggling is nothing but importing goods clandestinely, without payment of duty and such goods would squarely fall within the definition of 'Prohibited goods', under Section 2(33) of the Act. 55. The expression, 'subject to the prohibition under the Customs Act, 1962 or any other law for the time being in force, in Section 2(33) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terpreting Section 2(33) of the Customs Act, 1962, as to what is prohibition, imposed in other laws, for the time being in force, one cannot ignore, the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974, rules framed by way of delegated legislation, like the Baggage Rules, 1998, framed in exercise of the powers conferred under Section 79 of the Customs Act, 1962 or for the matter, Section 77 of the Customs Act, 1962, which mandates, the owner of the baggage for the purpose of clearing the goods, to make a declaration of the contents of the baggage to the proper office and also the customs Notification No.3/2012, dated 16.01.2012, that only passengers of Indian origin or a passenger in possession of a valid passport, issued under the Passport Act, 1967, who have stayed abroad for six months and above alone are eligible to import gold of foreign origin and clear the same on payment of customs duty, at the rate prescribed. 60. Thus, in the overall view of the matter, we are convinced that no case is made out by the writ-applicant for grant of any relief as prayed for in this writ-application. 61. In the result, this writ-application fails and is hereby ..... X X X X Extracts X X X X X X X X Extracts X X X X
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