2007 (3) TMI 510 - AT - Customs

Confiscation - Absolute confiscation - Non-declaration and concealment of gold - Whether the absolute confiscation of the goods is justifiable - HELD THAT - Admittedly, none of the appellants had chosen to declare the gold to the customs authorities upon arrival from abroad, nor was any of them possessed of any documentary proof of lawful acquisition of the goods. Their attempt was to import the items stealthily without declaration and payment of customs duty. The appellants admitted this offence in their statements given u/s 108 of the Customs Act. They retracted these statements only in their bail applications filed in the criminal court. They did not make any retraction before the customs authorities, nor did they have a case that they had been made to give the aforesaid statements under intimidation, coercion or duress. Therefore, the decision rendered by ld Commissioners by taking into account the appellants confessional statements cannot be faulted. The confiscation of the gold, an item notified u/s 123 of the Customs Act, in respect of which the appellants failed to furnish proof of lawful acquisition, is perfectly in order. On similar facts, we have held in the cases of K.K. Saidalavi 2005 (9) TMI 198 - CESTAT, CHENNAI and K. Baluchamy 2007 (1) TMI 375 - CESTAT, CHENNAI that absolute confiscation of gold is not warranted and that the persons from whose possession it was seized should be given an option for redeeming the goods on payment of a reasonable fine. We have held that there is no provision in the Customs Act which made it mandatory for the adjudicating authority to order absolute confiscation of gold and that, under Section 125 of the Customs Act, it is open to the said authority to give an option for redemption against payment of fine. Accordingly, while upholding confiscation (other than absolute) of the gold, we direct the Commissioner to give an option to the appellants to redeem the goods against payment of reasonable fine. The question relating to penalty u/s 112(a) of the Customs Act may also be adjudicated upon afresh by the Commissioner. It goes without saying that the parties shall be given an effective opportunity of being heard on what should be the quanta of redemption fine and penalty in the respective cases. The appeals stand allowed by way of remand in the above terms.

Issues:
1. Confiscation of gold bars and coins under the Customs Act.
2. Imposition of penalties under Section 112(a) of the Customs Act.
3. Challenge against the Commissioner's findings of non-declaration and concealment of gold.
4. Justifiability of absolute confiscation of goods.
5. Redemption of seized goods against payment of a reasonable fine.
6. Adjudication of penalty under Section 112(a) of the Customs Act.

Analysis:

Issue 1: Confiscation of gold bars and coins under the Customs Act:
The judgment details three separate cases where individuals were intercepted at Chennai airport with undeclared gold bars and coins. The Customs authorities seized the goods under Section 111(d), (l), and (m) of the Customs Act due to non-declaration and concealment. The appellants contested the confiscation, arguing for the right to redeem the goods by paying a fine. The Commissioner ordered absolute confiscation, which was challenged in the appeal.

Issue 2: Imposition of penalties under Section 112(a) of the Customs Act:
Penalties were imposed on the appellants under Section 112(a) of the Customs Act by the Commissioner. The appellants claimed the penalties were arbitrary and excessive. The appellants sought a reduction in penalties citing previous tribunal decisions. The judgment highlighted the appellants' arguments and the Commissioner's findings regarding the penalties.

Issue 3: Challenge against the Commissioner's findings of non-declaration and concealment of gold:
The appellants did not challenge the Commissioner's findings of non-declaration and concealment of gold. They admitted to attempting to import the items without declaration or payment of customs duty. The confessional statements made under Section 108 of the Customs Act were not retracted before the customs authorities, leading to the Commissioner's decision based on these statements.

Issue 4: Justifiability of absolute confiscation of goods:
The Tribunal considered whether absolute confiscation of the gold was justifiable. Referring to previous cases, the Tribunal held that absolute confiscation was not warranted. Instead, the individuals should be given the option to redeem the goods by paying a reasonable fine. The Tribunal directed the Commissioner to provide this option to the appellants.

Issue 5: Redemption of seized goods against payment of a reasonable fine:
The judgment emphasized the Tribunal's stance that individuals should have the opportunity to redeem seized goods by paying a reasonable fine. The Tribunal directed the Commissioner to allow the appellants to redeem the goods against payment of a fine, rather than absolute confiscation.

Issue 6: Adjudication of penalty under Section 112(a) of the Customs Act:
The Tribunal ordered a fresh adjudication on the penalty under Section 112(a) of the Customs Act. The parties were to be given an opportunity to present their case regarding the quanta of redemption fine and penalty in their respective cases. The appeals were allowed by way of remand for further adjudication on the penalty issue.

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