2017 (7) TMI 45 - AT - Customs

Illegal import - smuggling of gold - confiscation - packing material - baggage rules - Held that - the issue herein is no longer res integra. This Tribunal under similar facts and circumstances in the case of CC, Lucknow Vs. Mohd. Nayab and another 2017 (1) TMI 3 - CESTAT ALLAHABAD , where it was held that there is no reason to interfere with the order of the learned Commissioner (Appeals) who have upheld the order of confiscation with redemption fine, redeemable on deposit of duty and fine. Further, the penalty imposed on the respondents, is adequate. There is no case of smuggling of the Gold is made out and at best it may be the case of non-declaration at best, against the respondent - confiscation with redemption fine upheld - penalties u/s 112 and 114 AA have been upheld. Appeal dismissed - decided against Revenue.

Summary

Issues Involved:
1. Legality of the interception and seizure of gold bars.
2. Validity of the statement recorded under Section 108 of the Customs Act.
3. Applicability of Baggage Rules and Foreign Trade Policy (FTP) provisions.
4. Justification for confiscation and penalties imposed.
5. Appropriateness of the redemption fine and penalties.

Detailed Analysis:

1. Legality of the Interception and Seizure of Gold Bars:
The respondent was intercepted by the Air Customs Intelligent Unit (ACIU) at Lucknow Airport, and two gold bars were found concealed in his underwear. The gold bars were wrapped in carbon paper and tape, and valued at ?7,23,168/-. The respondent admitted to receiving the gold bars from a friend in Riyadh for delivery in India. The gold was seized under the belief that it was being smuggled in contravention of the Customs Act, Baggage Rules, and FTP.

2. Validity of the Statement Recorded Under Section 108 of the Customs Act:
The respondent's statement recorded on the day of seizure under Section 108 of the Customs Act was contested as being non-voluntary and under duress. However, the Commissioner (Appeals) rejected this claim, noting that there was no immediate protest or retraction by the respondent, and the purported retraction was made after eight months, rendering it non-credible.

3. Applicability of Baggage Rules and FTP Provisions:
The respondent claimed to be a genuine passenger working abroad for over six months, intending to declare the gold upon reaching the Customs post. The Commissioner (Appeals) noted that the respondent did not declare the gold in the disembarkation card, which is supposed to be filled during the flight. The Commissioner observed that the respondent seemed to be attempting to bypass the Customs checkpoint without paying duty. The Joint Commissioner had earlier noted that the respondent's stay abroad was not continuous, which is a requirement under Rule 31(h) of the FT (EFAR) Order, 1993.

4. Justification for Confiscation and Penalties Imposed:
The Joint Commissioner ordered the confiscation of the gold bars under Section 111(d), (l), and (m) of the Customs Act but allowed redemption on payment of a fine of ?1,40,000/- along with applicable duty. Additionally, penalties of ?70,000/- under Section 112 and ?10,000/- under Section 114 AA were imposed. The Commissioner (Appeals) upheld this decision, noting that the respondent's actions indicated an attempt to smuggle the gold.

5. Appropriateness of the Redemption Fine and Penalties:
The Revenue appealed, arguing that the gold should be absolutely confiscated and that the redemption fine should be higher. The Tribunal referenced a similar case (CC, Lucknow Vs. Mohd. Nayab) where it was held that non-declaration rather than smuggling was established, and upheld the order of confiscation with redemption fine. The Tribunal found no reason to interfere with the Commissioner (Appeals)' order, maintaining the confiscation with the option to redeem on payment of fine and duty, and upheld the penalties imposed.

Conclusion:
The Tribunal dismissed the Revenue's appeal, affirming the Commissioner (Appeals)' order that upheld the confiscation with the option to redeem on payment of fine along with duty, and the penalties under Sections 112 and 114 AA. The Tribunal concluded that no case of smuggling was made out, and at best, it was a case of non-declaration. The respondent is entitled to consequential benefits in accordance with the law.