2023 (10) TMI 244 - AT - Customs

Refusal to grant redemption of 417 gms. (4 nos.) of gold ornaments - levy of penalty U/S 112 of Customs Act, 1962 - Baggage Rules - HELD THAT - It is on record that the appellant had imported 417 gms. of gold jewellery which was in his possession during the flight from Bangkok and that, upon arrival and at the first point of contact with customs authorities at the airport, he had opted for the red channel procedure. There was also no allegation that the said ornaments were concealed in any manner. It was common ground that the appellant was not entitled to import the gold brought in by him. At the same time, there is no bar on import of gold except that, as baggage , only eligible persons may do so. Baggage herein has to be read in the restrictive sense of eligibility for exemption/concession afforded by chapter XI of Customs Act, 1962 and not from the broader understanding of having been carried on board any conveyance arriving from abroad. Consequently, it suffices for the purposes of law for the gold ornaments to be assessed and cleared in the manner prescribed in Customs Act, 1962. The goods are liable for confiscation owing to ineligibility as passenger. It is not the case of the appellant that confiscation is not warranted as the appeal is merely concerned with access of the appellant to the gold ornaments. As gold ornaments are not restricted for import, confiscation without option to redeem is not valid exercise of authority under section 125 of Customs Act, 1962. Accordingly, the option of redemption is granted to the appellant herein, who may, upon payment of fine of ₹ 1,25,000/-, have possession of the gold ornaments restored to him. Penalty of ₹ 2,50,000/- is reduced to ₹ 50,000/-. Appeal disposed off.

Summary

Issues involved:
The refusal to grant redemption of gold ornaments upon confiscation, jurisdiction of the Tribunal to dispose of the appeal.

Judgment Summary:

Issue 1: Refusal to grant redemption of gold ornaments

The appellant arrived in Goa from Bangkok carrying 417 gms. of gold ornaments valued at Rs. 12,10,359, which were confiscated by customs authorities. The original authority held the gold ornaments liable to confiscation due to the passenger's lack of eligibility for import through baggage and imposed a penalty of Rs. 2,50,000 under section 112 of the Customs Act, 1962. The appellant argued that the gold ornaments should have been offered for redemption after confiscation under section 125 of the Act. It was contended that there was no valid ground for confiscation or penalty as the appellant had not concealed the goods and had followed the proper procedure upon arrival.

Issue 2: Jurisdiction of the Tribunal

The Tribunal addressed the jurisdictional question regarding the disposal of the appeal. The proviso to section 129A(1) of the Customs Act, 1962 specifies that appeals related to baggage fall under the jurisdiction of the Government of India, not the Tribunal. The definition of 'baggage' under the Act includes goods for personal use or as gifts within specified value limits. Any item not meeting these criteria would not qualify as baggage. The Tribunal clarified that goods subject to segregation for duty rate determination would not fall under the purview of baggage, allowing the Tribunal's jurisdiction. The Tribunal concluded that it had the authority to decide the matter concerning the gold ornaments.

Conclusion:

The Tribunal found that the gold ornaments were liable for confiscation due to the passenger's ineligibility for import. However, as gold ornaments are not restricted for import, confiscation without the option of redemption was deemed invalid. The appellant was granted the option of redemption upon payment of a reduced fine of Rs. 1,25,000, with the penalty reduced from Rs. 2,50,000 to Rs. 50,000. The appeal was disposed of accordingly.

(Order pronounced in the open court on 28/09/2023)