2023 (10) TMI 451 - AT - Customs

Absolute Confiscation - Seeking redemption of prohibited goods - levy of penalty u/s 112 (a) and (b) of the Customs Act, 1962 and u/s 114AA of the Customs Act, 1962 - Gold of foreign origin - denial of opportunity to declare the goods and to pay Customs duty - retraction of statements - HELD THAT - There is no bar on the Adjudicating Authority allowing redemption of prohibited goods. The reason for such discretion left to the adjudicating authority is evident. In case of prohibited goods, the nature of the goods and the nature of the prohibition vary and cases have to be dealt with exercising discretion. For instance, spurious drugs, arms, ammunition, food which does not meet the food safety standards, etc. are harmful to the society if released to the owner and they find their way into the market - There is absolutely no bar in Section 125 on the adjudicating authority releasing any goods whatsoever, which are prohibited or restricted on payment of redemption fine. The adjudicating authority can allow redemption under Section 125 of any goods which are prohibited either under the Customs Act or any other law on payment of fine but he is not bound to so release the goods. The appellant in his statement recorded in his own hand writing has informed that the gold was handed over by an unknown person in Dubai as arranged by Shri Mubash who also hails from his native place Thalasserry, Kerala and he has agreed to carry the gold due to his family financial conditions for a consideration of Rs.25,000/-. There was no retraction of the above statement recorded under Section 108 of the Customs Act, 1962, till the case came up for hearing before the Tribunal. The appellant being an ineligible passenger could not have brought gold and clear after declaration on payment of duty. As, at that relevant time even an eligible passenger can bring only 1 Kg gold in terms of Notification No. 12/2012-Cus dated 17.03.2012. The smuggling of gold by the appellant is proved beyond any doubt. So, it was rightly confiscated absolutely by the original adjudicating authority. Penalties under Section 112 and also 114AA of Customs Act, 1962 - HELD THAT - A reading of these provisions make it clear that there is no bar for imposition of penalties under both these Sections. Penalty is imposable for rendering the goods liable for confiscation by one s acts of omission and commission under Section 112 of the Customs Act, 1962. Whereas, penalty under Section 114AA is imposable if any person knowingly or intentionally makes, signs or uses or causes to be made, signed or used any declaration, statement or document which is false and incorrect - Having rendered the gold liable for confiscation penalty under Section 112 of the Customs Act, 1962, penalty is imposable and has been rightly imposed. In the Customs Declaration Form which has been filed in, he had written nothing against the column of total value of goods imported . So, penalty under Section 114AA is imposable. As such penalties imposed under Section 112 114AA of the Customs Act, 1962 are in accordance with the legal provisions in the instant case. The penalties imposed are harsh as he accepted and acted to smuggle gold for a consideration of Rs.25,000/-. So, penalty imposed under Section 112 of Customs Act, 1962 is reduced to Rs.2,00,000/- and penalty imposed under Section 114AA of the Customs Act, 1962 is reduced to Rs.1,00,000/- - appeal allowed in part.

Summary

Issues Involved:
1. Legality and propriety of absolute confiscation of 4000 grams of gold under Section 111 (d) & (i) of the Customs Act, 1962.
2. Justification of penalties imposed under Section 112 (a) and (b) and Section 114AA of the Customs Act, 1962.

Summary:

Issue 1: Legality and Propriety of Absolute Confiscation of Gold
The appellant challenged the Order-in-Original which ordered absolute confiscation of 4000 grams of gold under Section 111 (d) & (i) of the Customs Act, 1962, read with the Foreign Trade (Development & Regulations) Act, 1992. The appellant argued that he was not given an opportunity to declare the gold and pay appropriate customs duty. However, the Tribunal found that the appellant was not an eligible passenger and was attempting to smuggle the gold for a consideration of Rs.25,000. The gold was confiscated as it was imported contrary to prohibitions under the Customs Act and Foreign Trade Policy. The Tribunal upheld the absolute confiscation, citing the appellant's frequent travel and awareness of import regulations, and the absence of required foreign currency for duty payment.

Issue 2: Justification of Penalties
The appellant was penalized Rs.9,00,000 under Section 112 (a) & (b) and Rs.4,00,000 under Section 114AA of the Customs Act, 1962. The appellant contended that both penalties could not be imposed jointly and argued against the concealment and opportunity to declare the gold. The Tribunal noted that penalties under both sections are permissible. Section 112 penalizes acts rendering goods liable for confiscation, while Section 114AA penalizes false declarations. The appellant's Customs Declaration Form indicated "nothing" against the value of imported goods, justifying the penalty under Section 114AA. However, considering the appellant's acceptance of smuggling for Rs.25,000, the Tribunal reduced the penalties to Rs.2,00,000 under Section 112 and Rs.1,00,000 under Section 114AA.

Conclusion:
The appeal was partly allowed, upholding the confiscation of gold but reducing the penalties imposed. The Tribunal emphasized the seriousness of smuggling and the appellant's failure to meet import conditions.