2019 (1) TMI 1726 - AT - Customs

Smuggling - Gold - absolute confiscation - penalty - prohibited goods or not - HELD THAT - Gold being a permitted goods for importation, cannot be said to be restricted goods in applying such an interpretation but ceiling on the maximum quantity that could be imported could never be equated with restriction or prohibition to such importation - Admittedly, appellant s intention to evade duty by suppressing such import is apparent on record for which Commissioner (Appeals) has rightly confirmed fine and penalty under relevant provisions of the Customs Act but absolute confiscation of gold, which is permitted to be imported to India, solely on the ground that it was brought in concealment cannot be said to be in confirmity to law. Appeal dismissed.

Summary

Issues:
1. Modification of order for confiscation of gold passed by Jt. Commissioner assailed by the Department.
2. Interpretation of "prohibited goods" under the Customs Act, 1962.
3. Applicability of judicial decisions in determining prohibited goods.
4. Confirmation of penalties under relevant provisions of the Customs Act.

Analysis:

Issue 1:
The Department challenged the modification of the confiscation order for gold passed by the Jt. Commissioner, seeking the reversal of the decision made by the Commissioner (Appeals) regarding the confiscation and penalties imposed on the appellant. The appellant was apprehended at Nagpur Airport with gold concealed beneath socks to evade Customs duty.

Issue 2:
The appeal involved a detailed analysis of the interpretation of "prohibited goods" as defined in Section 2(33) of the Customs Act, 1962. The argument centered around whether the conditions and restrictions of import were fulfilled, making the seized gold amount to prohibited goods subject to absolute confiscation. The Hon'ble Supreme Court's judgment in Om Prakash Bhatia's case was referenced to understand the concept of prohibited goods and the implications for the present case.

Issue 3:
During the appeal, the Authorized Representative for the appellant referenced judicial decisions, including Omprakash Bhatia v. Commissioner of Customs, Delhi and Malabar Diamond Gallery P. Ltd. v. Addl. Dir. General, Directorate of Revenue Intelligence, Chennai, to support the argument that the seized gold could be considered prohibited goods due to non-compliance with import conditions and the intention to evade duty. The appellant's conduct at the airport and statements recorded by Customs Officers were highlighted to justify the appeal for setting aside the Commissioner (Appeals) order.

Issue 4:
The confirmation of penalties under Sections 112(a), 112(b), and 114AA of the Customs Act, 1962, was a crucial aspect of the judgment. While the penalties imposed on the appellant were upheld, the absolute confiscation of the gold was deemed inappropriate based on the interpretation of prohibited goods and the appellant's intention to evade duty. The Commissioner (Appeals) decision to modify the confiscation order and impose a fine under Section 125(1) was upheld, emphasizing the distinction between prohibited and restricted goods under the Customs Act.

In conclusion, the appeal was dismissed, and the Order-in-Original passed by the Commissioner (Appeals) was confirmed, emphasizing the importance of distinguishing between prohibited and restricted goods in customs enforcement and penalty imposition.