2018 (1) TMI 126 - AT - Customs

Smuggling - Gold - penalty u/s 112 and 114AA of the CA - Held that - the term absolute confiscation is not used in the entire Customs Act and as such the provisions mandate confiscation - with reference to Section 125 of the Customs Act, the Learned Commissioner (Appeals) observed that while using the term owner, identifies such owner as a person to whom the goods may be redeemed practically. It is for this reason that Section 125 of the Act ibid, also prescribes that where the owner is not known, the option of redemption would be given to the person from whose possession or custody such goods were seized - appeal dismissed - decided against Revenue.

Summary

Issues Involved:
1. Modification of order from absolute confiscation to confiscation with redemption fine
2. Penalty imposed under Section 112 of the Customs Act

Analysis:

Issue 1: Modification of order from absolute confiscation to confiscation with redemption fine
The appeal in question revolved around the modification of the order of absolute confiscation to one of confiscation with the option to redeem upon payment of a redemption fine. The Appellant was intercepted by AIU Officers during the clearance of a flight and found with a gold strip coated with mercury in his trolley bag, along with other seized items. The Commissioner of Customs had initially ordered absolute confiscation of the gold strip and imposed penalties under Sections 112 and 114 AA of the Customs Act. However, the Learned Commissioner (Appeals) modified the order, upholding the charge of smuggling but changing the confiscation to one with an option to redeem on payment of a redemption fine of ?10 lakhs, in addition to applicable duty and charges. The Tribunal found no impropriety in this modification, upholding the decision of the Learned Commissioner (Appeals) based on the provisions of the Customs Act and the concept of redemption under Section 125 of the Act.

Issue 2: Penalty imposed under Section 112 of the Customs Act
The penalty imposed under Section 112 of the Customs Act was also a significant aspect of the appeal. The Commissioner of Customs had imposed a penalty of ?5 lakhs on the respondent under this section, which was upheld by the Learned Commissioner (Appeals). The Tribunal noted the penalty and its imposition, along with the penalty under Section 114 AA of the Customs Act. Despite the appeal by the Revenue challenging the modification of the confiscation order, the Tribunal found no grounds for illegality or impropriety in the decision of the Learned Commissioner (Appeals) and dismissed the appeal by the Revenue.

In conclusion, the judgment by the Appellate Tribunal CESTAT ALLAHABAD upheld the modification of the confiscation order to allow redemption upon payment of a fine, as well as the penalties imposed under Section 112 of the Customs Act. The decision was based on the provisions of the Customs Act and the interpretation of terms like confiscation and redemption under the law.