2022 (10) TMI 100 - HC - Customs

Territorial Jurisdiction - power of Tribunal to decide any appeal in respect of any goods imported or exported as Baggage - absolute Confiscation - direction for re-export of goods - Section 129A (1) of the Customs Act, 1962 - HELD THAT - Having found that the Baggage Rules would cover the respondents in terms of the categories of passengers, question may still arise as to whether jewellery worn on the person of a passenger would constitute Baggage. It may be necessary for the appellant to show that not only the appellants are governed by the Baggage rules but the jewellery worn on the person would constitute Baggage to sustain its argument of lack of jurisdiction of the Tribunal to deal with the present issue. It seems that the appellants may be right in its submission that the issue relates to Baggage falls within the exclusion carved out in terms of the proviso to Section 129 A (1) of the Customs Act, 1962 and thus the order of the Tribunal is set aside as bad in law. However, liberty is granted to the respondents to avail statutory remedy by way of a revision before the appropriate authority if so advised within a period of 8 weeks from the date of receipt of a copy of this order. If such revision is filed by the respondents within the time line set out above the Revisional Authoirty shall examine the matter and pass order on merits. As the Tribunal may not have jurisdiction to entertain the appeal in respect of an order relating to import of baggage, as a consequence W.P.No.4811 of 2021 praying for disposal of her jewellery which was premised on the order of the Tribunal which we have set aside appears to have become infructuous. However liberty is granted in the event of the petitioner succeeding in the challenge to the order of the appellate authority before the appropriate forum to avail any remedy that may be available to enforce such order in the manner known to law. Petition disposed off.

Summary

Issues Involved:
1. Jurisdiction of the Tribunal under Section 129A(1) of the Customs Act, 1962.
2. Classification of jewelry worn on the person as "Baggage."
3. Legality of the absolute confiscation of gold and imposition of penalties.

Detailed Analysis:

1. Jurisdiction of the Tribunal:
The primary issue was whether the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) had jurisdiction to entertain an appeal concerning goods imported as "Baggage," given the proviso to Section 129A(1) of the Customs Act, 1962, which excludes such jurisdiction. The Tribunal overturned the preliminary objection regarding its jurisdiction, stating that the case involved non-compliance with import conditions under Section 124 of the Customs Act, which falls within its purview. The Tribunal also noted that the Revenue had not raised any jurisdictional objections before the High Court, thus precluding them from doing so before the Tribunal.

2. Classification of Jewelry as "Baggage":
The case questioned whether jewelry worn on the person constitutes "Baggage." The Baggage Rules, 2016, under Rule 3, allow duty-free clearance of personal effects and travel souvenirs up to a specified value. The definition of "Baggage" under the Customs Act, 1962, includes unaccompanied baggage but excludes motor vehicles. The Tribunal found that the jewelry worn by the respondent, a Malaysian national, could be classified as "Baggage" under the Baggage Rules, 2016, which cover tourists of foreign origin. The Kerala High Court in Vigneswaran Sethuraman vs. Union of India had earlier ruled that jewelry worn by a passenger does not constitute "Baggage" under the Baggage Rules, 1998. However, the 2016 Rules are more expansive and include jewelry worn on the person.

3. Legality of Confiscation and Penalties:
The Principal Commissioner of Customs ordered the absolute confiscation of the gold chain and bangles under Sections 111(d) and 111(l) of the Customs Act, 1962, and imposed penalties under Sections 112(a) and 114AA. The respondent initially admitted to smuggling the gold but later claimed it was personal jewelry. The gold was seized for non-declaration and ineligibility to import. The Appellate Authority confirmed the confiscation, citing the 24-carat purity of the gold as indicative of intent to smuggle. The Tribunal, however, found the confiscation and penalties to be based on flimsy grounds, noting that the proceedings were solely based on the Mahazar and lacked substantial evidence. It also pointed out that there was no prohibition on importing gold jewelry under the Customs Act or any other law, and no order under Section 32 of the Foreign Trade (Development & Regulation) Act, 1992, was on record to deem the jewelry prohibited goods.

Conclusion:
The High Court concluded that the Tribunal lacked jurisdiction to entertain the appeal concerning goods imported as "Baggage" under the proviso to Section 129A(1) of the Customs Act, 1962. The order of the Tribunal was set aside as null and void, and the respondents were granted liberty to file a revision before the appropriate authority within eight weeks. The writ petition concerning the disposal of the jewelry became infructuous, with liberty granted to the petitioner to seek enforcement of any favorable order from the appropriate forum. The Civil Miscellaneous Appeal and the writ petition were disposed of accordingly, with no costs, and connected miscellaneous petitions were closed.