2016 (6) TMI 10 - CGOVT - Customs

Confiscation in lieu of redemption fine and imposition of penalty - Smuggling of 148 grams of gold bangles - 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 to the passenger nor Shri Thangaraj to who, the gold was meant to be handed over have claimed the impugned goods. Therefore, the gold cannot be allowed to be handed over to the respondent to re-export who is only a carrier. In this regard Government places reliance on 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 ₹ 20,000/- 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 bangles by the respondent.
2. Whether the respondent acted as a carrier for monetary consideration.
3. Legality of the absolute confiscation of gold bangles.
4. Appropriateness of the penalty imposed.
5. Legitimacy of the re-export order by the Commissioner (Appeals).

Issue-wise Detailed Analysis:

1. Non-declaration of Gold Bangles:
The respondent, a Sri Lankan national, arrived from Colombo carrying six gold bangles weighing 148 grams and valued at Rs. 4,18,248/-. She did not declare these to Customs, violating Section 77 of the Customs Act, 1962. The gold bangles were intercepted by Customs officers at the exit point. The respondent admitted during the hearing that she was a carrier, bringing the gold for someone else in exchange for monetary gain. Consequently, the goods were confiscated under Section 111(I) and (m) of the Customs Act, 1962.

2. Whether the Respondent Acted as a Carrier for Monetary Consideration:
The respondent claimed the gold bangles were her personal effects. However, during the personal hearing, she admitted that the gold was handed over to her in Colombo by a person named Shri Satish to be delivered to another individual in Chennai for monetary compensation. This admission was considered voluntary and significant evidence of her role as a carrier.

3. Legality of the Absolute Confiscation of Gold Bangles:
The Deputy Commissioner of Customs ordered the absolute confiscation of the gold bangles under Section 111(d), (I), and (m) of the Customs Act, 1962, read with Section 3 of the Foreign Trade (D&R) Act, 1992. The respondent appealed, and the Commissioner (Appeals) allowed the re-export of the gold on payment of a redemption fine, reducing the penalty. The Department argued that the Commissioner (Appeals) erred by allowing re-export, ignoring the respondent's role as a carrier, and granting unintended benefits to a smuggler.

4. Appropriateness of the Penalty Imposed:
The original penalty imposed was Rs. 42,000 under Section 112(a) of the Customs Act, 1962. The Commissioner (Appeals) reduced it to Rs. 20,000. The Department contended that the penalty reduction was unjustified given the respondent's admission of acting as a carrier. However, the Government found no reason to interfere with the reduced penalty, considering the circumstances of the case.

5. Legitimacy of the Re-export Order by the Commissioner (Appeals):
The Commissioner (Appeals) allowed re-export of the gold bangles under Section 125 and Section 80 of the Customs Act, 1962, considering the gold was not concealed ingeniously and the respondent had no prior offenses. The Government, however, observed that re-export provisions apply only to bona fide baggage declared to Customs, which the respondent failed to do. The Government cited several higher court judgments supporting absolute confiscation in similar cases, emphasizing that carriers are not entitled to re-export benefits. Consequently, the Government set aside the re-export order, restoring the original order of absolute confiscation.

Conclusion:
The Government upheld the absolute confiscation of the gold bangles and the reduced penalty of Rs. 20,000. The re-export order by the Commissioner (Appeals) was deemed illegal and set aside. The revision application succeeded in these terms.

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