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2018 (8) TMI 1932 - CGOVT - CustomsSmuggling - Gold bars - prohibited goods or not - revision application is filed mainly on the grounds that he had brought the gold bars for self use only, gold is not prohibited goods - HELD THAT - From the revision application it is evident that the applicant does not dispute the Commissioner (Appeals) s order regarding confiscation of the goods which were brought by him illegally from Dubai in violation of Customs Act and the Foreign Trade (Development and Regulation) Act, 1992 and his request is limited to a point that the confiscated gold may be released on payment of redemption fine and reasonable penalty. Government has examined the matter and it is found that there is no dispute regarding the fact that the applicant had violated Section 77 of Customs Act, 1962 by not declaring gold bars to the Customs authorities on his arrival at Airport from Dubai. Accordingly, Commissioner (Appeals) has rightly upheld the Order-in-Original to the extent of confiscating the gold bars which were brought from Dubai with the intention to evade customs duty. However, the Commissioner (Appeals) has upheld Additional Commissioner s order of absolute confiscation of gold on the premise that the gold brought by the applicant had become prohibited when it was sought to be smuggled in by changing the form of gold into wire and by concealing the same in beading of his stroller bag. But he has not cited any legal provision under which the import of gold is expressly prohibited and has only stated that the applicant was not an eligible passenger to bring any quantity of gold as per Notification No. 12/2012-Cus. (N.T.), dated 17-3-2012 and thus an option for redemption of confiscated gold could not be given. While the Government is fully convinced that unusual method of concealment of gold is a very relevant factor for determining the quantum of fine and penalty, it does not agree with the Commissioner (Appeals) that the gold had become prohibited only because of its unusual method of smuggling by changing the form of gold into wire and concealing the same in beading of his stroller bag even when the gold is not notified as prohibited goods under Section 11 of the Customs Act, 1962 or any other law. Prohibited goods is a distinct class of goods which can be notified by the Central Government only and the goods cannot be called as prohibited goods simply because it was brought by any person in violation of any legal provision with the intention to evade payment of customs duty. There is a clear difference between the prohibited goods and general regulatory restrictions imposed under the Customs Act or any other law with regard to importation of goods. While prohibited goods are to be notified with reference to specified goods only which are either not allowed at all or allowed to be imported on specified conditions only, regulatory restrictions with regard to importation of goods is generally applicable irrespective of the individual case like goods will not be imported without declaration to the Customs and without payment of duty leviable thereof, etc. Such restriction is clearly a general restriction/regulation, but it cannot be stated that the imported goods become prohibited goods if brought in contravention of such restriction. Apparently because such goods when imported in violation of specified legal provisions are also liable for confiscation under Section 111 of the Customs Act, 1962. The Commissioner (Appeals) has ordered for absolute confiscation - The Commissioner (Appeals) should have provide an option to the applicant under Section 125 of the Customs Act, 1962 to redeem the confiscated goods on payment of customs duties, redemption fine and penalty and because it was not done so earlier, the Government now allows the applicant to redeem the confiscated gold within 30 days from the date of issuance of this order on payment of customs duty, fine of ₹ 4,50,000/- and penalty of ₹ 1,75,000/- already imposed by the Additional Commissioner of Customs and upheld by the Commissioner (Appeals). Revision application disposed off.
Issues:
Violation of Customs Act and Foreign Trade (Development and Regulation) Act, 1992; Absolute confiscation of gold; Eligibility to import gold; Prohibited goods classification; Redemption of confiscated goods under Section 125 of Customs Act, 1962. Violation of Customs Act and Foreign Trade (Development and Regulation) Act, 1992: The applicant filed a revision application against the Order-in-Original confiscating gold brought illegally from Dubai. The applicant argued that the gold was for personal use only and not prohibited goods. The Commissioner (Appeals) upheld the confiscation, citing violation of Customs Act and Foreign Trade Act. The applicant sought redemption of the confiscated gold on payment of fine and penalty. Absolute confiscation of gold: The Government found that the applicant violated Customs Act by not declaring the gold bars. The Commissioner (Appeals) upheld the confiscation, claiming the gold became prohibited due to smuggling methods. However, the Government disagreed, stating that the gold was not notified as prohibited goods. The Commissioner (Appeals) erred in not providing the option to redeem the gold under Section 125 of the Customs Act. Eligibility to import gold: The Commissioner (Appeals) upheld the absolute confiscation, contending the applicant was not eligible to bring gold as per a notification. However, the Government clarified that the eligibility under the notification pertained to concessional duty rates, not import eligibility. The gold, although liable for confiscation due to illegal importation, was not prohibited goods under the Customs Act. Prohibited goods classification: The judgment distinguished between prohibited goods, which require specific notification by the Central Government, and goods subject to general regulatory restrictions. The gold, though smuggled, did not fall under the prohibited goods category. Previous court decisions also affirmed that gold is not prohibited goods, and redemption options should be provided for confiscated gold. Redemption of confiscated goods under Section 125 of Customs Act, 1962: The Government allowed the applicant to redeem the confiscated gold within 30 days by paying customs duty, fine, and penalty. The Commissioner (Appeals) erred in not providing this option earlier. The revision application was disposed of, modifying the Commissioner (Appeals) order to allow redemption of the gold as per Section 125 of the Customs Act, 1962.
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