2016 (10) TMI 641 - AT - Customs

Smuggling of gold bars - concealment of gold bars in the baggage - non-declaration of value - concealment of gold bars in order to avoid duty - confiscation of gold bars - imposition of penalty u/s 112(a) and (b) and 114AA of the Customs Act 1962 - The plea to reduce the penalty u/s 112 and to set aside the penalty u/s 114AA on the ground that the appellant is a poor, uneducated and unemployed labour who has gone to Riyadh with a purpose of earning money for improving the financial condition of his family justified? - Held that - The gold in question was purchased by the appellant and was brought to India for the purpose of marriage of his sister. The evidences leading to the facts that marriage ceremony was to take place in near future stands placed on record by him. Though the fact is that he violated the law of the land by trying to smuggle gold into the land, I am of the view that penalties imposed upon him needs some interference on account of the fact that the gold in question stands absolutely confiscated. Reliance placed in the decision of the case Zainuddin Vs. CCE Hyderabad 2015 (11) TMI 32 - CESTAT BANGALORE . Penalties u/s 112 reduced on account of the fact of absolute confiscation of the goods and penalty u/s 114AA set aside in as much as there cannot be said to have been any short levy on account of absolute confiscation. As such by following the said decision of the Tribunal, penalty imposed u/s 112(a) and (b) reduced to ₹ 1 lakh and penalty imposed u/s 114AA set aside. Appeal dismissed - decided partly in favor of appellant.

Summary

Issues: Smuggling of gold bars, imposition of penalties under Customs Act 1962

Smuggling of Gold Bars:
The appellant arrived at T3 IGI Airport New Delhi from Saudi Riyadh and was intercepted by Custom officers for x-ray screening of his baggage, revealing concealed gold bars. The total value of the seven gold bars was assessed at ?20,60,100. The appellant admitted to concealing the gold bars in his personal belongings for his sister's marriage, acknowledging the duty payment requirement for importing gold into India. The appellant's actions indicated an intent to smuggle the gold bars.

Imposition of Penalties under Customs Act 1962:
Proceedings were initiated against the appellant resulting in the confiscation of the gold bars and imposition of penalties under sections 112(a) and (b) as well as section 114AA of the Customs Act 1962. The penalties included ?2 lakhs under section 112 and ?4 lakhs under section 114AA. The appellant appealed, seeking a reduction in the penalties based on evidence that the gold was intended for his sister's marriage, not for trading. The appellant's advocate argued for reducing the penalties under section 112 and setting aside the penalty under section 114AA, citing a Tribunal order in a similar case.

Analysis:
The appellant's plea for penalty reduction was based on his status as a poor, uneducated, and unemployed laborer striving to support his family financially. While acknowledging the smuggling attempt, the Tribunal noted the evidence supporting the purpose of the gold bars for the upcoming marriage ceremony. The Tribunal referenced a previous decision where penalties were reduced due to absolute confiscation of goods and absence of short levy in such cases. Consequently, the penalties under section 112(a) and (b) were reduced to ?1 lakh each, and the penalty under section 114AA was set aside. Despite the penalty reductions, the appeal was rejected, affirming the decision on other grounds.

This detailed analysis of the judgment highlights the issues of smuggling gold bars and the imposition of penalties under the Customs Act 1962, providing a comprehensive overview of the case and the Tribunal's decision.