2016 (11) TMI 1082 - HC - Customs

Confiscation of unaccompanied baggage - the petitioner brought in a few items of food articles entrusted by some of his family members which were seized at the airport - different items in 21 cartons - Scope of redemption fine u/s 125 - The only contention urged is that since the goods are not prohibited goods, the appellate authority ought to have granted the petitioner an option to redeem the goods on payment of fine - Held that - When the statutory authority considered the relevant aspects and forms an opinion that it is not a bonafide baggage and has observed that such baggage is prohibited, I am of the view that there is justification on the part of the appellate authority to have not exercised the power to grant option in favour of the petitioner - In view of my finding that it is not a bona fide baggage and such materials could not have been imported without a valid licence, it amounts to a prohibition under any other law in force - option under section 125 rightly denied - petition dismissed - decided against Petitioner.

Summary

Issues Involved:
1. Legality of the confiscation order under Section 111(d) and 111(o) of the Customs Act, 1962.
2. Applicability of Section 125 of the Customs Act, 1962 for granting an option to pay a fine in lieu of confiscation.
3. Interpretation of "prohibited goods" under the Customs Act, 1962 and Foreign Trade (Development and Regulation) Act, 1992.
4. Compliance with the Baggage Rules, 2016 and the Foreign Trade (Development & Regulation) Act, 1992.

Detailed Analysis:

1. Legality of the Confiscation Order:
The petitioner challenged the confiscation order (Ext.P2) issued by the Deputy Commissioner of Customs under Section 111(d) and 111(o) of the Customs Act, 1962, which was upheld by the Commissioner of Customs (Ext.P3). The confiscation was based on the seizure of food articles brought by the petitioner, which were found to be in violation of the Baggage Rules, 2016, and the Foreign Trade (Development and Regulation) Act, 1992.

2. Applicability of Section 125 of the Customs Act, 1962:
The petitioner argued that instead of confiscation, an option to pay a fine should have been granted under Section 125 of the Customs Act, 1962, as the goods were not absolutely prohibited. The petitioner relied on precedents such as Yakub Ibrahim Yusuf v. Commissioner of Customs, Mumbai, and Commissioner of Customs (Preventive), West Bengal v. India Sales International, which interpreted the term "prohibited" to mean "prohibited absolutely."

The court noted that Section 125 provides discretionary power to permit the owner of confiscated goods to pay a fine in lieu of confiscation, except where the goods are prohibited under any law. The court emphasized that the exercise of this discretion is not mandatory if the importation is prohibited under the Act or any other law.

3. Interpretation of "Prohibited Goods":
The court referred to the Supreme Court judgments in Sheikh Mohd. Omer v. Collector of Customs, Calcutta, and Om Prakash Bhatia v. Commissioner of Customs, Delhi. In Sheikh Mohd. Omer, it was held that "any prohibition" includes every type of prohibition, whether complete or partial, and that restrictions on import or export are also considered prohibitions. In Om Prakash Bhatia, it was held that non-compliance with conditions prescribed for import/export makes the goods prohibited under the Act.

The court concluded that the contravention of the Baggage Rules, 2016, and the Foreign Trade (Development & Regulation) Act, 1992, amounts to a prohibition under the law.

4. Compliance with the Baggage Rules, 2016 and the Foreign Trade (Development & Regulation) Act, 1992:
The court observed that the petitioner brought in 21 cartons, out of which only 4 belonged to him, and the rest were for friends and relatives. The petitioner failed to provide sufficient details about the ownership and particulars of the other cartons. The court noted that the Baggage Rules, 2016, which came into effect on 01/04/2016, require that unaccompanied baggage must be bonafide, consisting of used personal and household articles.

The court found that the petitioner's baggage was not bonafide as required under Rule 8 read with Rule 6 of the Baggage Rules, 2016, and thus violated Section 7 of the Foreign Trade (Development & Regulation) Act.

Conclusion:
The court upheld the confiscation order, stating that the appellate authority was justified in not exercising the power to grant an option to pay a fine in lieu of confiscation. The court dismissed the writ petition, concluding that the importation of the goods violated the relevant statutes and amounted to a prohibition under the law.