2023 (5) TMI 264 - HC - Customs

Absolute confiscation or option of redemption fine - smuggled gold and foreign (Thai) currency - prohibited goods or not - burden to prove - HELD THAT - In the present case, the Commissioner (Appeals) has held that the gold is not a prohibited item, it should be offered for redemption in terms of Section 125 of the Act. The Tribunal has recorded that the respondents had brought impugned Gold from Bangkok to Gaya International Airport without declaring the same to Customs Authorities and there was nothing to explain as to how the Customs authorities posted at Gaya International Airport could not detect such huge quantity of gold being removed from Gaya International Airport by passengers on their arrival and there was no explanation as to how the respondents procured gold before they were intercepted at Mughalsarai Railway Station and the Tribunal has dismissed the Appeals for the aforesaid reason and has affirmed the order passed by the Commissioner (Appeals) holding that the import of gold was not prohibited under the Foreign Trade Policy or any other law and, therefore, there is no sufficient ground for absolute confiscation of the gold. Nothing was placed before this Court to challenge the finding of the Commissioner (Appeals), which was upheld by the Tribunal, that Gold is not a prohibited item, and nothing was placed before this Court to establish that this finding of the Commissioner (Appeals) was wrong or erroneous - Even if the goods in question had been brought into India without following the conditions prescribed therefore and those fall within the category of prohibited condition, Section 125 of the Act provides that the Adjudicating Officer may give to the owner of such goods an option to pay fine in lieu of confiscation. Section 128 A of the Act confers powers on the Commissioner (Appeals) to pass such order, as he thinks just and proper, confirming, modifying or annulling the decision or order appealed against. In the present case, the Commissioner (Appeals) has modified the order of absolute confiscation by imposing penalty in lieu thereof, which was well within his power as per Section 128 A. The Tribunal has affirmed the order of the Commissioner (Appeals). This Court dismissed the further Appeal filed by the Department, finding no illegality in the judgment passed by the Tribunal - the order passed by this Court refusing to interfere with the aforesaid order passed by the Tribunal does not suffer from any error, much less from an error apparent on the face of the record - Review application dismissed.

Summary

Issues Involved:
1. Whether the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Allahabad correctly upheld the order dated 27.08.2018 by the Commissioner (Appeals) without addressing the findings of the Adjudicating Authority on absolute confiscation of smuggled gold and foreign currency.
2. Whether the CESTAT, Allahabad correctly allowed the release of smuggled gold on redemption of fine and reduced the redemption fine.

Summary:

Issue 1: Upholding the Order Without Addressing Findings on Absolute Confiscation

The review application was filed to contest the judgment dated 06.07.2022 in Customs Appeal No. 7 of 2019. The appeal challenged the order dated 13.02.2019 by CESTAT, Allahabad, which dismissed the Customs Appeal filed by the Commissioner of Customs, Lucknow against the order dated 27.08.2018 by the Commissioner (Appeals), Customs, GST and Central Excise, Lucknow. The Commissioner (Appeals) had allowed the respondents to redeem confiscated gold upon payment of a fine. The substantial question of law was whether the Tribunal correctly upheld the order without addressing the Adjudicating Authority's findings on absolute confiscation of smuggled gold and foreign currency.

During the hearing, the appellant's counsel confined submissions to this question. The Court found that nothing was presented to prove the Commissioner (Appeals)'s finding that gold is not a 'prohibited good' was wrong. Thus, the Court concluded that the Adjudicating Authority's order for confiscation without considering that gold is not prohibited was erroneous. The Tribunal did not err in upholding the order for redemption under Section 125 of the Customs Act.

The review sought correction on grounds that neither Section 2(33) of the Act nor relevant case laws were considered. The Court, however, found that the Commissioner (Appeals) and Tribunal's findings that gold is not prohibited were unchallenged. Thus, the decision did not suffer from apparent errors.

Issue 2: Release of Smuggled Gold on Redemption Fine

The appellant did not press this question during the hearing. The Court noted that the Commissioner (Appeals) and Tribunal had both held that the import of gold was not prohibited under any law, thus not warranting absolute confiscation. The Tribunal affirmed the Commissioner (Appeals)'s decision to allow redemption upon payment of a fine, which was within their powers under Section 128A of the Act.

The Court found no illegality in the Tribunal's judgment and dismissed the further appeal by the Department. The review application was dismissed for lack of merit, as the original order did not suffer from any error apparent on the face of the record.