2016 (6) TMI 9 - CGOVT - Customs

Confiscation in lieu of redemption fine and imposition of penalty - Smuggling of 87.5 gram of gold bangle - non-declaration at green channel - contravention of provisions of Section 77 of the Customs Act, 1962 - Held that - any oral submission made before the adjudicating authority will be a material piece of evidence. In view of the specific admission made by the respondent before the adjudicating authority, government is inclined to hold that the respondent is a carrier of the impugned goods. In the present case as the passenger is not the owner of the goods and neither Shri Satish who handed the gold over the passenger nor Shri Thangaraj to whom the gold was meant to be handed over have claimed to impugned goods. Therefore, the gold cannot be allowed to be handed over to the respondent for re-export who is only a carrier. In this regard Government places reliance on the various decisions of higher Courts the ratio of which is squarely applicable to the instant case. Government further notes that the provision to Re-export of baggage is available under Section 80 ibid. However this Section is applicable only to cases of bonafide baggage declared to Customs, which the respondent failed to do and is not eligible for re-export of impugned goods. Government also finds no merit in the plea of the respondent that the gold was not required to be declared and can be cleared free of duty of the condition of re-export. Government notes that in terms of Section 77 anything imported by a passenger is required to be declared to Customs and is chargeable to duty above the passenger is required to be declared to Customs and is chargeable to duty above the specified limits. Further gold and gold jewellery can be imported by only eligible passengers subject to fulfillment of conditions thereof. Government finds that the passenger was a Sri Lankan passport holder not eligible to import the impugned goods and the same were also not declared to the Customs. But for being apprehended by Customs, the passenger could have been successful in smuggling in the impugned goods into the country on behalf of another. Therefore, penalty has rightly been imposed upon the respondent under Section 112 ibid and Government finds no reason to interfere with the order of the Commissioner (Appeals) to the extent that penalty has been reduced to ₹ 10,000/- only. The re-export of the impugned goods allowed in this case by the Commissioner (Appeals) is therefore set-aside and the impugned Order-in-Original ordering absolute confiscation is restored. - Decided partly in favour of revenue

Issues Involved:
1. Non-declaration of gold bangle to customs.
2. Absolute confiscation vs. redemption and re-export of the gold bangle.
3. Penalty imposition and reduction.
4. Eligibility and legal provisions for re-export under Customs Act, 1962.

Detailed Analysis:

1. Non-declaration of gold bangle to customs:
The respondent, a Sri Lankan national, arrived from Colombo and attempted to clear a gold bangle weighing 87.5 grams valued at Rs. 2,47,275/- without declaring it to customs, violating Section 77 of the Customs Act, 1962. The gold bangle was intercepted by customs officers immediately after the exit point. The respondent admitted to being a carrier for someone else for monetary gains, contravening provisions of Section 77 of the Customs Act, 1962, and making the goods liable for confiscation under Section 111(d) and (m) of the Customs Act, 1962.

2. Absolute confiscation vs. redemption and re-export of the gold bangle:
The Deputy Commissioner of Customs initially ordered the absolute confiscation of the gold bangle and imposed a penalty of Rs. 25,000/- under Section 112(a) of the Customs Act, 1962. The Commissioner (Appeals) set aside the absolute confiscation, allowing redemption of the gold bangle under Section 125 of the Customs Act, 1962, for re-export on payment of a redemption fine of Rs. 40,000/- and reduced the penalty to Rs. 10,000/-. The Department filed a revision application, arguing that the respondent, being a carrier, should not have been granted the benefit of re-export, citing previous cases where absolute confiscation was upheld.

3. Penalty imposition and reduction:
The Commissioner (Appeals) reduced the penalty from Rs. 25,000/- to Rs. 10,000/-, considering that the respondent had no previous offenses and the gold bangle was not concealed ingeniously but was worn openly. The Department contested this reduction, but the government found no reason to interfere with the reduced penalty, considering the circumstances of the case.

4. Eligibility and legal provisions for re-export under Customs Act, 1962:
The government observed that the respondent was not the owner of the gold and was acting as a carrier. The gold was meant to be handed over to another individual, and neither the person who handed over the gold nor the intended recipient claimed ownership. The government referenced several higher court decisions supporting absolute confiscation in similar cases and concluded that the gold could not be allowed for re-export by the respondent. The provision for re-export under Section 80 of the Customs Act, 1962, is applicable only to bona fide baggage declared to customs, which the respondent failed to do. The government thus set aside the order of the Commissioner (Appeals) allowing re-export and restored the original order of absolute confiscation.

Conclusion:
The revision application succeeded, and the order of absolute confiscation was restored. The penalty reduction to Rs. 10,000/- was upheld, but the re-export of the gold bangle was not permitted. The final order emphasized the importance of declaring imported goods to customs and upheld the legal provisions and precedents supporting absolute confiscation in cases involving carriers.

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