2020 (7) TMI 32 - AT - Customs

Smuggling - Gold Bars - concealment of Gold Bars in the socks arriving from the Dubai Airport - Retraction of statements - Absolute Confiscation - Penalties - HELD THAT - The appellant firstly concealed the gold bars in his Socks and also not declared to the Customs. This clearly shows the intention of the appellant to avoid declaration as well as evasion of duty. There is no evidence to show that the appellant had bona-fide belief and intend to declare the gold bars and pay the Customs duty. In this circumstances the gold bars brought by him from Dubai is clearly liable for confiscation. Confiscation of goods - Retraction of statements - HELD THAT - even if the statement recorded under 108 is not considered the fact of smuggling of gold by the intercepting by the Customs Officer is not in dispute, therefore, the act of smuggling of gold is not in doubt. The appellant had made wrong declaration, therefore, it is clear that the appellant had a malafide intention to escape with the smuggled gold without payment of duty - the adjudicating authority has rightly exercised his discretion to absolute confiscate of gold bars. The absolute confiscation of gold bars ordered by the adjudicating authority is proper and legal - the penalty imposed by the adjudicating authority needs no interference - appeal dismissed.

Issues Involved:
1. Confiscation of gold bars under Sections 111(d), 111(l), 111(m) of the Customs Act, 1962.
2. Imposition of penalties under Sections 112(a), 112(b), and 114AA of the Customs Act, 1962.
3. Validity of the appellant's claim that the gold bars were for personal use and not for commercial purposes.
4. Consideration of the appellant's retracted statement and its impact on the case.
5. Application of Section 7 of the Foreign Trade (Development and Regulation) Act, 1992.
6. Request for release of confiscated gold bars on payment of redemption fine under Section 125 of the Customs Act, 1962.
7. Applicability of RBI circulars under the Foreign Exchange Management Act (FEMA), 1999.

Detailed Analysis:

1. Confiscation of Gold Bars:
The appellant arrived from Dubai carrying two gold bars concealed in his socks and did not declare them to Customs. The Customs Officer seized the gold bars and issued a show cause notice for confiscation under Sections 111(d), 111(l), and 111(m) of the Customs Act, 1962. The Additional Commissioner of Customs adjudicated that the gold bars were "prohibited goods" due to the manner of attempted clearance, leading to their absolute confiscation.

2. Imposition of Penalties:
Penalties were imposed under Sections 112(a), 112(b), and 114AA of the Customs Act, 1962. The appellant argued that the penalties were unjustified as the gold bars were not "prohibited goods" per the Customs Act's definition. The Tribunal upheld the penalties, stating that the appellant's actions demonstrated an intention to evade customs duty.

3. Personal Use vs. Commercial Purpose:
The appellant claimed the gold bars were for personal use, supported by purchase receipts and the small quantity involved. The Tribunal rejected this argument, noting the appellant's concealment and failure to declare the gold bars, indicating an intention to evade duty.

4. Retracted Statement:
The appellant's statement, recorded under coercion and later retracted, was considered. The Tribunal found that despite the retraction, the appellant's actions (concealing gold and crossing the green channel) indicated smuggling intent. Thus, the retracted statement did not significantly impact the case.

5. Section 7 of the Foreign Trade (Development and Regulation) Act, 1992:
The appellant argued that Section 7 was not applicable as the gold bars were for personal use. The Tribunal noted that the show cause notice referred to Section 7, but the adjudication focused on the manner of import. The Tribunal upheld the confiscation, emphasizing the appellant's failure to declare the gold.

6. Redemption Fine under Section 125:
The appellant requested the release of confiscated gold bars on payment of redemption fine. The Tribunal denied this request, affirming the absolute confiscation due to the appellant's actions demonstrating an intention to evade customs duty.

7. Applicability of RBI Circulars under FEMA, 1999:
The appellant argued that the RBI circulars under FEMA were not applicable as the gold was for personal use. The Tribunal upheld the application of these circulars, noting that the appellant's actions were consistent with commercial importation intended to evade duty.

Conclusion:
The Tribunal upheld the Order-In-Original, confirming the absolute confiscation of the gold bars and the imposition of penalties. The appellant's arguments regarding personal use, retracted statement, and non-applicability of certain legal provisions were rejected, emphasizing the intention to evade customs duty. The appeal was dismissed.

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