2017 (5) TMI 1534 - Commissioner - Customs

Absolute Confiscation - gold/gold jewellery - penalty - Held that - There is no findings in the Order that the gold was brought for consideration as carrier - gold is not an item the import of which in any circumstances would danger or be detriment to health welfare or morals of people as whole and therefore is liable to be released on payment of redemption fine since it does not cause danger or detriment to health. An option given to redeem the goods on payment of fine and on payment of applicable rate of duty. As far as the quantum of fine is concerned I find that there are various judicial pronouncements that purpose of Redemption Fine is to wipe out the margin of profit - redemption fine fixed at 1, 00, 000/- - penalty upheld. Appeal disposed off.

Summary

Issues Involved:
1. Absolute confiscation of gold under Sections 111(d), 111(l), and 111(m) of the Customs Act, 1962.
2. Imposition of penalty under Sections 112(a) and 112(b) of the Customs Act, 1962.
3. Eligibility for redemption of confiscated gold under Section 125 of the Customs Act, 1962.

Issue-wise Detailed Analysis:

1. Absolute Confiscation of Gold:
The appellant, arriving from Kuwait, was intercepted at CSI Airport, Mumbai, and found with 232 grams of gold concealed in his underwear. The gold was not declared upon arrival, violating Section 77 of the Customs Act, 1962, and Baggage Rules, 1998. The adjudicating authority confiscated the gold absolutely under Sections 111(d), 111(l), and 111(m) of the Customs Act, 1962. The appellant argued that the gold was for his sister's marriage and presented purchase invoices, but this did not absolve him from the penal action due to the violation of the Customs Act and Exim Policy.

2. Imposition of Penalty:
A penalty of ?60,000 was imposed under Sections 112(a) and 112(b) of the Customs Act, 1962. The appellant contested the penalty, citing various judgments where redemption was allowed, and argued that the adjudicating authority did not consider all aspects of the case. However, the penalty was upheld as the appellant failed to declare the gold, thus violating customs regulations.

3. Eligibility for Redemption of Confiscated Gold:
The appellant sought redemption of the confiscated gold under Section 125 of the Customs Act, 1962. The adjudicating authority has discretionary power to offer redemption for non-prohibited goods. The appellant provided purchase invoices and claimed ownership, and no other person claimed the gold. The adjudicating authority did not justify the absolute confiscation, ignoring the consistent judicial approach allowing redemption in similar cases. Various judgments support the redemption of gold, even when concealed, as long as it does not pose a danger to health, welfare, or morals.

Judgment:
The adjudicating authority's decision to absolutely confiscate the gold was found inconsistent with Section 125 of the Customs Act, 1962, and contrary to numerous judicial precedents. The appellant was given the option to redeem the gold on payment of a fine of ?1,00,000 and applicable duty. The penalty of ?60,000 imposed on the appellant was upheld.