2011 (3) TMI 761 - HC - Customs

Non-resident - Respondents had submitted that the provisions under Notification No. 31/2003-Customs, dated 1-3-2003, would be available only if the goods in question belong to the petitioner - Therefore, the gold jewellery would not be available for re-export, as the petitioner is not the owner of the goods - Further, they were only carriers of the goods, in favour of an unknown dealer - It had also been submitted that an enhanced penalty had been paid by nearly 13 out of the 15 persons, who were liable to pay the same - It had also been submitted that an efficacious alternative appellate remedy is available to the petitioner, under the 128 of the Customs Act, 1962 - However, it had been admitted that the owner of the goods is not known.

Issues Involved:
1. Eligibility of the petitioner to import gold chains under Notification No. 31/2003-Customs.
2. Confiscation of gold chains and imposition of penalties under the Customs Act, 1962.
3. Refusal to release the gold chains for re-export despite payment of fines and penalties.
4. Legality of recovering the enhanced penalty imposed on Rahamathullah from the petitioner.
5. Availability of alternative appellate remedies under the Customs Act, 1962.

Detailed Analysis:

1. Eligibility to Import Gold Chains:
The petitioner, a Non-resident Indian employed in Singapore, arrived at Chennai Airport carrying gold chains weighing 297 grams. Under Notification No. 31/2003-Customs, dated 1-3-2003, the petitioner was eligible to import gold chains as part of his baggage at a concessional duty rate, provided he had stayed abroad for at least six months. The petitioner met these conditions, making him eligible to import the gold chains.

2. Confiscation and Penalties:
Customs authorities intercepted the petitioner and others at the airport, suspecting them of being carriers for an unknown operator. The gold chains were confiscated under Sections 111(d) and 111(m) of the Customs Act, 1962, and a penalty of Rs. 10,000/- was imposed on the petitioner under Section 112. Additionally, Rahamathullah, alleged to have abetted the illegal import, was fined Rs. 75,000/-.

3. Refusal to Release Gold Chains for Re-export:
The petitioner appealed against the confiscation and penalties. The Commissioner of Customs (Appeals) allowed the re-export of the gold chains on payment of a redemption fine of Rs. 36,000/- and an additional penalty of Rs. 20,000/-. Despite compliance with these conditions, the gold chains were not released for re-export due to non-payment of an enhanced penalty by Rahamathullah.

4. Legality of Recovering Enhanced Penalty:
The petitioner argued that the enhanced penalty imposed on Rahamathullah was a personal penalty and could not be recovered from him or other passengers. Citing precedents, it was contended that personal penalties cannot be enforced against unrelated parties. The court agreed, noting that the Customs Act does not permit recovery of penalties imposed on one individual from another.

5. Availability of Alternative Appellate Remedies:
The respondents argued that an alternative appellate remedy under Section 128 of the Customs Act was available. However, the court found that the order of the Commissioner of Customs (Appeals) had become final and did not necessitate further appeals.

Judgment:
The court set aside the impugned order requiring the petitioner to pay the enhanced penalty imposed on Rahamathullah for the release of the gold chains. It directed the respondents to release the gold chains for re-export without any additional conditions, as per the Customs Act, 1962. The court emphasized that the petitioner was not liable for Rahamathullah's penalties and that the Customs Act did not support such recovery.

Conclusion:
The writ petition was ordered in favor of the petitioner, directing the release of the gold chains for re-export and closing the connected miscellaneous petition. No costs were imposed.

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