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2020 (3) TMI 37 - AT - CustomsSmuggling - Gold - Revenue is not in a position to return the goods confiscated - levy of redemption fine - HELD THAT - Section 125 of Customs Act, 1962 has given right to the importer to redeem the goods on payment of redemption fine. Due to action of Revenue of selling impugned goods during the period of filing appeal before learned Commissioner (Appeals) the goods are not available for redemption therefore Revenue has rendered right of appellant under Section 125 of Customs Act, 1962 as non-enforceable. Therefore the contention of learned A.R. for Revenue that redemption fine should be recovered cannot be enforced because by payment of redemption fine, Revenue is not in a position to return the impugned goods. If goods are not available for redemption on account of disposal of the same by Revenue appellant is not required to pay redemption fine and Customs duty and also eligible for refund of sale proceeds - On examination of provisions of the Section 112(b) of said Act, the penalty is reduced to ₹ 1,33,429/- - As per record the amount of sale proceeds is ₹ 38,62,524/-. I therefore in the circumstances of the matter order for payment of ₹ 38,62,524/- Minus ₹ 1,33,429/- personal penalty to the appellant by Revenue.
Issues:
1. Appeal against Order-in-Appeal No.15-CUS/APPL/LKO/2019 dated 21/01/2019 by Commissioner (Appeals) of Customs, GST & Central Excise, Lucknow. 2. Confiscation of 1235 grams of gold valued at ?36,55,600 under Section 111 Customs Act of 1962. 3. Imposition of penalties under Sections 112(b) and 114AA of Customs Act, 1962. 4. Appeal filed by both Revenue and appellant before CESTAT ALLAHABAD. 5. Application under Right to Information Act, 2005 revealing sale of impugned goods by Revenue. 6. Redemption of gold on payment of redemption fine and penalty. 7. Interpretation of Section 125 of Customs Act regarding redemption of goods. 8. Application of legal precedents such as Shilps Impex case and rulings by Hon'ble Supreme Court and High Courts. 9. Reduction of penalty imposed under Section 112(b) of Customs Act. Detailed Analysis: 1. The appellant challenged the Order-in-Appeal by the Commissioner (Appeals) of Customs, GST & Central Excise, Lucknow, regarding the confiscation of 1235 grams of gold valued at ?36,55,600 under Section 111 of the Customs Act, 1962. The appellant was found carrying the gold concealed in trolley bags at Lucknow Airport, leading to the seizure. 2. The Original Authority ordered absolute confiscation of the gold and imposed penalties under Sections 112(b) and 114AA of the Customs Act, 1962. The Commissioner (Appeals) set aside absolute confiscation, allowing redemption of the gold on payment of a redemption fine of ?7.50 lakhs and set aside the penalty under Section 114AA. 3. Both Revenue and the appellant filed appeals before CESTAT ALLAHABAD, with Revenue's appeal being dismissed earlier. The appellant raised concerns about the sale of impugned goods by Revenue during the appeal period, as revealed through an RTI application, leading to the unavailability of the gold for redemption. 4. The appellant argued for a refund of the sale proceeds without the imposition of redemption fine and penalties, citing legal precedents like the Shilps Impex case. The appellant also contested the penalty amount imposed under Section 112(b), claiming it exceeded statutory provisions. 5. The Assistant Commissioner representing Revenue argued for the application of Section 125 of the Customs Act, allowing for redemption of goods on payment of a redemption fine. Referring to previous cases, Revenue sought the return of sale proceeds after deducting the redemption fine and penalty. 6. The Tribunal analyzed the provisions of Section 125 of the Customs Act and the implications of the unavailability of the goods for redemption due to their sale by Revenue. Citing the Shilps Impex case and subsequent court rulings, the Tribunal concluded that the appellant was entitled to a refund of the sale proceeds. 7. The Tribunal reduced the penalty imposed under Section 112(b) and ordered Revenue to pay the appellant the sale proceeds minus the reduced penalty amount by a specified date. Additionally, the Tribunal ordered the release of the trolley bags, partially allowing the appeal and disposing of the Miscellaneous Application.
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