2004 (12) TMI 735 - HC - Customs

Summary

Issues Involved:
1. Legality of the seizure and confiscation of 12 gold bars.
2. Legality of the seizure and confiscation of a gold chain.
3. Applicability of Section 77 of the Customs Act, 1962 and Baggage Rules, 1988.
4. Application of redemption option under Section 125 of the Customs Act, 1962.
5. Compliance with procedural and legal requirements by the Customs Authorities.

Detailed Analysis:

1. Legality of the Seizure and Confiscation of 12 Gold Bars:
The petitioner in W.P. No. 15146 of 2001 was intercepted by Customs Authorities at Chennai Airport on 6.8.1999, and 12 gold bars weighing 1339 grams valued at Rs. 4,93,847/- were seized from his baggage. The petitioner claimed the gold bars were kept for security purposes and not intended for smuggling. However, the authorities confiscated the gold bars and imposed a penalty of Rs. 25,000/- under Section 112 of the Customs Act, 1962. The petitioner was also detained under COFEPOSA for one year and prosecuted under Section 135 of the Customs Act, 1962. The appeal and revision filed by the petitioner were dismissed, confirming the confiscation and penalty.

2. Legality of the Seizure and Confiscation of a Gold Chain:
The petitioner in W.P. No. 13230 of 2002 was intercepted by Customs Authorities at Chennai Airport on 11.1.2001, and a gold chain weighing 115 grams valued at Rs. 47,265/- was seized. The petitioner argued that the gold chain was worn around his neck and should be considered a 'personal effect' under Section 77 of the Customs Act, 1962, and Baggage Rules, 1988. However, the authorities confiscated the gold chain and imposed a penalty of Rs. 5,000/- under Section 112(a) of the Customs Act, 1962. The appeal and revision filed by the petitioner were dismissed, confirming the confiscation and penalty.

3. Applicability of Section 77 of the Customs Act, 1962 and Baggage Rules, 1988:
The petitioners argued that under Section 77 of the Customs Act, 1962, and Baggage Rules, 1988, they were entitled to bring the gold without payment of customs duty as it was their 'personal effect.' The court, however, found that the petitioners did not declare the goods as required under law and did not have valid licenses from the Reserve Bank of India to import gold. The court held that the petitioners violated the relevant provisions of law and rules, thus justifying the confiscation.

4. Application of Redemption Option under Section 125 of the Customs Act, 1962:
The petitioners contended that, under the liberalized import policy post-1992, gold was no longer a prohibited item, and the option of redemption should be extended under Section 125 of the Customs Act, 1962. The court, however, cited the judgment in Commissioner of Customs (Preventive) v. Uma Shankar Verma, which held that if the goods are prohibited, the Customs Authorities have no option but to confiscate without allowing redemption. The court concluded that the gold in question was prohibited, and thus, the option of redemption was not applicable.

5. Compliance with Procedural and Legal Requirements by the Customs Authorities:
The court observed that the petitioners were given sufficient opportunity to declare the goods and prove their bona fide intentions, which they failed to do. The authorities acted within their quasi-judicial capacity, and their actions had direct civil consequences, including the power to impose penalties and confiscate goods. The court found no arbitrariness in the authorities' actions and upheld the confiscation orders.

Conclusion:
The court dismissed both writ petitions, confirming the confiscation orders and penalties imposed by the Customs Authorities. The court held that the petitioners violated the relevant provisions of the Customs Act, 1962, and Baggage Rules, 1988, by not declaring the gold and not having valid licenses. The court also ruled that the option of redemption under Section 125 of the Customs Act, 1962, was not applicable as the gold was a prohibited item. The court found no merit in the petitioners' arguments and upheld the authorities' actions. Consequently, W.P.M.P. No. 22497 of 2001 was also dismissed, with no order as to costs in both writ petitions.