2007 (8) TMI 599 - AT - Customs

Confiscation - Absolute confiscation - Prohibited goods - Penalty - Quantum of - Import of gold biscuits

Summary

Issues:
Seizure and absolute confiscation of gold biscuits; Penalty imposed on the appellants; Interpretation of Section 125 of the Customs Act, 1962; Legal provisions regarding redemption of confiscated goods; Applicability of case laws on confiscation of gold; Reduction of penalty imposed on the appellants.

Seizure and Confiscation of Gold:
The case involved the seizure and absolute confiscation of gold biscuits weighing 2917.240 gms valued at about Rs. 14.00 lakhs. The appellants were penalized, with the first two appellants fined Rs. 2.00 lakhs each and the other three appellants fined Rs. 5.00 lakhs each. The Senior Advocate for the appellants did not contest the confiscation but argued against absolute confiscation, seeking the release of the gold on payment of redemption fine and duty.

Interpretation of Customs Act, 1962 - Section 125:
The Senior Advocate argued that absolute confiscation should only apply to prohibited goods, and even in such cases, the adjudicating officer may allow the option to pay a redemption fine. He cited legal provisions under Section 125 of the Customs Act, 1962, emphasizing that importing gold is no longer prohibited and can be subject to payment of duty. He referred to case laws supporting the option to pay a fine in lieu of confiscation for imported goods.

Applicability of Case Laws on Confiscation of Gold:
The Tribunal considered case laws such as Sheikh Mohd. Omer v. Collector of Customs and Commissioner of Customs (Preventive) v. Uma Shankar Verma. These cases established that any prohibition under the Customs Act includes all types of prohibition, and even though gold could be imported under specific conditions, it could still be considered a prohibited item if those conditions were not met. The Tribunal applied this legal precedent to the present case, concluding that the import of gold subject to conditions renders confiscated gold liable for absolute confiscation.

Reduction of Penalty Imposed:
After hearing arguments and considering the case records, the Tribunal found merit in reducing the penalty imposed on the appellants. The Bench had previously considered a lower pre-deposit amount during Stay Petitions, indicating scope for reducing the penalties. Consequently, the Tribunal reduced the penalties for the appellants from Rs. 2.00 lakhs to Rs. 50,000 each for the first two appellants and from Rs. 5.00 lakhs to Rs. 1.00 lakh each for the other three appellants, partially allowing the appeals by reducing the penalties.

In conclusion, the Tribunal upheld the absolute confiscation of the gold due to non-compliance with import conditions, citing legal provisions and case laws. However, it reduced the penalties imposed on the appellants based on the arguments presented and the earlier considerations during Stay Petitions.