2016 (7) TMI 1020 - CGOVT - Customs

Import of baggage without declaring goods - Levy of penalty - carrying contraband or dutiable goods - Held that - The applicant was neither eligible to import gold nor did he declare the impugned goods that were in a substantial/commercial quantity. Instead he had carefully concealed them on his person to smuggle it into the country and to hoodwink the authorities, Hence, the same cannot be treated as bonafide baggage in terms of Section 79 of the Act ibid. The said cold is imported in violation of provisions of Section 77, 79, of Customs Act, 1962 para 2.20 of Exim Policy of 2009-14 and provisions of Section 3 (3) and 11(1) of Foreign Trade (Development & Regulation) Act, 1992. The same would thus appropriately constitute prohibited goods liable to confiscation under Section 111 (d), (j), (l) and (m) of the Customs Act, 1962. Therefore, Government finds no reason to interfere with the order of the lower authority ordering confiscation of the impugned gold under Section 111 (d), (j), (I) and (m) of the Act ibid. Government further finds that in view of the facts and circumstances of the case redemption fine and penalty under relevant provisions of the Act ibid has been rightly imposed on the applicant for the offense committed. The quantum of penalty is reasonable and commensurate to the nature of the offense where the gold has been sought to be smuggled by deliberate concealment. Therefore, the plea of the applicant that redemption fine and penalty imposed is too harsh is not tenable. The Revision application is rejected being devoid of merits. - Decided against the applicant.

Issues Involved:
1. Whether the gold jewellery was prohibited and subject to confiscation.
2. Whether the applicant was entitled to re-export the seized goods.
3. The legality of the imposed redemption fine and penalty.
4. Justification for the disposal action of seized goods.

Detailed Analysis:

1. Whether the gold jewellery was prohibited and subject to confiscation:

The applicant, Abdul Salam Chamundi, was intercepted at Kolkata Airport with 562 pieces of gold chains concealed on his person, which he did not declare to Customs. The Customs officers seized the goods under Section 110 of the Customs Act, 1962, suspecting they were smuggled. The applicant admitted to carrying the gold for monetary gain and without paying the required duty, violating Section 77 of the Customs Act. The goods were deemed non-bonafide baggage and liable for confiscation under Sections 111(d), (j), (l), and (m) of the Customs Act, 1962. The Supreme Court in Om Prakash Bhatia Vs Commissioner of Customs (2003) clarified that goods not complying with import conditions are considered prohibited. The applicant was not eligible to import the gold under Rule 6 of the Baggage Rules and thus, the gold was classified as prohibited goods.

2. Whether the applicant was entitled to re-export the seized goods:

The applicant requested re-export of the seized goods, arguing they were not absolutely confiscated. However, the provision for re-export under Section 80 of the Customs Act, 1962, applies only to bonafide baggage declared to Customs, which the applicant failed to do. The Government cited the case of Hemal K. Shah (2012) and CC Kolkata Vs Grand Prime Ltd (2003), supporting the view that goods liable for confiscation cannot be re-exported. Therefore, the applicant's request for re-export was denied.

3. The legality of the imposed redemption fine and penalty:

The Additional Commissioner of Customs ordered confiscation of the gold chains with an option to redeem them on payment of a redemption fine of ?25,00,000 and a personal penalty of ?10,00,000 under Section 112(a) and (b) of the Customs Act, 1962. The applicant argued that the fine and penalty were too harsh. However, the Government found the quantum of the fine and penalty reasonable and commensurate with the nature of the offense, where the gold was smuggled by deliberate concealment. The plea to reduce the fine and penalty was not tenable.

4. Justification for the disposal action of seized goods:

The applicant contended that the disposal action for the seized goods was unjustified as the goods were not absolutely confiscated. The Government observed that the issue of disposal of seized goods was not a subject matter of the impugned Order-in-Original or Order-in-Appeal and was beyond the purview of the Revisionary Authority as per Section 129 DD read with the proviso to Section 129 A(1) of the Customs Act, 1962.

Conclusion:

The Government found no merit in the Revision Application filed by the applicant. The gold jewellery was rightly classified as prohibited goods and subject to confiscation. The applicant was not entitled to re-export the goods, and the imposed redemption fine and penalty were justified. The disposal action for the seized goods was beyond the scope of the Revisionary Authority. The Revision Application was rejected as devoid of merits.

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