2016 (6) TMI 191 - CGOVT - Customs

Smuggling of 148.5 grams of gold bangles - non-declaration at green channel - contravention of provisions of Section 77 of the Customs Act 1962 - Confiscation in lieu of redemption fine and imposition of penalty - 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 to whom 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 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 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 bangle by the respondent.
2. Confiscation and penalty imposed by the Deputy Commissioner of Customs.
3. Order by the Commissioner (Appeals) allowing re-export and reducing the penalty.
4. Revision application by the Department challenging the Order-in-Appeal.

Issue-wise Detailed Analysis:

1. Non-declaration of Gold Bangle:
The respondent, a Sri Lankan national, arrived from a flight and attempted to clear a gold bangle weighing 148.5 grams without declaring it to customs, violating Section 77 of the Customs Act, 1962. The gold bangle was recovered after interception by Customs Officers immediately after the exit point. During the oral personal hearing, the respondent admitted to being a carrier of the gold bangle for monetary gains.

2. Confiscation and Penalty Imposed by the Deputy Commissioner of Customs:
The Deputy Commissioner of Customs, in the Order-in-Original dated 23.06.2012, ordered:
(i) Absolute confiscation of the gold bangle under Section 111(d), (I), and (m) of the Customs Act, 1962, read with Section 3 of the Foreign Trade (D&R) Act, 1992.
(ii) Imposition of a penalty of Rs. 42,000 under Section 112(a) of the Customs Act, 1962.

3. Order by the Commissioner (Appeals) Allowing Re-export and Reducing the Penalty:
The respondent appealed against the Order-in-Original. The Commissioner (Appeals) set aside the absolute confiscation, allowed redemption of the gold bangle for re-export on payment of a redemption fine of Rs. 65,000, and reduced the penalty to Rs. 10,000. The Commissioner (Appeals) justified this by noting that the respondent was wearing the gold bangle and it was not concealed. Additionally, the respondent had no previous offenses registered.

4. Revision Application by the Department Challenging the Order-in-Appeal:
The Department filed a revision application under Section 129 DD of the Customs Act, 1962, arguing that the Commissioner (Appeals) ignored the fact that the respondent was a carrier and granted an unintended benefit. The Department cited several precedents where absolute confiscation was upheld in similar cases.

Government's Observations and Decision:
The Government carefully reviewed the case records and noted that the respondent admitted to being a carrier during the personal hearing before the adjudicating authority. This admission was considered a material piece of evidence. The Government held that the respondent, being a carrier, was not entitled to re-export the gold bangle. The Government relied on higher court decisions that supported absolute confiscation in such cases, emphasizing that goods liable for confiscation cannot be allowed for re-export.

The Government concluded that the order by the Commissioner (Appeals) allowing re-export was not legal and proper. The absolute confiscation ordered by the Deputy Commissioner of Customs was restored, and the penalty reduction by the Commissioner (Appeals) was upheld.

Final Order:
The revision application succeeded, setting aside the re-export of the impugned goods and restoring the absolute confiscation. The Order-in-Appeal was modified accordingly.

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