2020 (3) TMI 667 - CGOVT - Customs

Smuggling - Silver items - Baggage Rules - redemption of confiscated goods - HELD THAT - Silver in any other form other than ornaments does not come within the ambit of bona fide baggage as per the Baggage Rules, 2016. The applicant has brought 8 pieces of silver bowls of foreign origin. This is an admitted fact by the applicant in his voluntary statement tendered under Section 108 of Customs Act, 1962 that he owns a shop dealing in silver utensils and he purchased these utensils from Yangon, Myanmar. From the evidence on record it is observed that the applicant crossed the green channel without declaring the impugned articles in his possession in the Customs declaration form or in any other form to the Customs officers and thereby violated Section 77 of the Customs Act, 1962. The applicant has attempted to smuggle the impugned silver articles with an intention to evade customs duty and in gross violation of provisions of Customs Act, 1962 and rules made thereunder read with Foreign Trade Policy (2015-2020). Although silver does not fall under the category of prohibited goods, the import of silver is governed by certain terms and conditions as per Customs Act, 1962 and rules made thereunder. Any import in violation of the above renders the goods liable for confiscation. The passenger cannot use baggage as a route to smuggle silver items for commercial use - the Government does not find any deficiency in the order of the Commissioner (Appeals) - Revision Application filed by the applicant is rejected.

Summary

Issues:
1. Confiscation and penalty imposed on silver items brought from Myanmar.
2. Request for redemption of confiscated goods based on ownership.
3. Interpretation of Baggage Rules and Foreign Trade Policy regarding duty-free imports.
4. Violation of Customs Act, 1962 by attempting to smuggle silver items.
5. Discretion of adjudicating authority under Section 125 for redemption of confiscated goods.
6. Application of rules governing import of silver items and prevention of smuggling through baggage.

Confiscation and Penalty:
The judgment revolves around a Revision Application filed against the Order-in-Appeal upholding the confiscation and penalty imposed on 10 kgs of silver items brought from Myanmar. The applicant contested that the silver articles were owned by him and not prohibited goods, seeking redemption of the confiscated items.

Interpretation of Rules:
The applicant argued that the Commissioner (Appeals) erred in not allowing the release of the silver items on payment of a redemption fine, claiming ignorance of Customs procedures while bringing the silver utensils valued at ?3,45,600 from Myanmar. The Baggage Rules, 2016 and Foreign Trade Policy were examined to determine the eligibility for duty-free imports, highlighting limitations on silver items not falling under bona fide baggage.

Violation of Customs Act:
The applicant's ownership of a shop dealing in silver utensils and the purchase of silver bowls from Myanmar indicated commercial use, contrary to bona fide baggage regulations. The judgment emphasized the attempt to smuggle silver items without declaration, violating the Customs Act, 1962, and evading customs duty, leading to confiscation under relevant provisions.

Discretion of Adjudicating Authority:
Section 125 of the Customs Act, 1962 provides the option to pay a fine in lieu of confiscation, granting the adjudicating authority discretion for redemption of seized goods. The absence of such redemption in this case was justified based on the nature of the offense, supported by the Commissioner (Appeals)'s decision.

Prevention of Smuggling:
While silver is not classified as prohibited goods, its import is regulated by Customs Act provisions and rules, making any violation subject to confiscation. The judgment emphasized that using the 'baggage' route for smuggling silver items for commercial purposes is impermissible, ensuring compliance with import regulations.

In conclusion, the Government rejected the Revision Application, affirming the Commissioner (Appeals)'s decision regarding the confiscation and penalty on the silver items brought from Myanmar. The judgment underscored the importance of adhering to Customs regulations, preventing misuse of duty-free imports for commercial activities and smuggling.