2024 (3) TMI 998 - HC - Customs

Levy of penalties - smuggling of Gold - baggage rules - petitioner could not produce any licit document in support of the possession/acquisition or legal importation of the said gold - Absolute confiscation of gold weighing 3203.900 gram - HELD THAT - Petitioner has imported the gold within the Indian customs waters contrary to the prohibition imposed for its import. The Gold was concealed in medicine packets, which were concealed under several layers of packing. The goods were also not declared in the Indian Customs Declaration Form. On the other hand false declaration was made in the said Form - Consequently, the gold was liable to be confiscated under section 111 of the Act. Petitioner has also conceded to the said position and has not objected to the confiscation of the said gold items. Petitioner has clearly done an act that has rendered the gold liable to confiscation under section 111 of the Act and as such is liable under 112(a) of the Act. Further, Petitioner had carried the gold and had concealed the gold knowing or having reason to believe that the article he was carrying was liable to confiscation under section 111 of the Act and as such he is also liable under Section 112(b) of the Act. There is no merit in the contention of learned counsel for the Petitioner that he was not aware of the gold. Petitioner was carrying the packet containing gold. The gold items were concealed inside two pieces of Medicine Sachets which were kept inside a Multi coloured zipper jute bag further kept in the Black coloured zipper handbag that was carried by the Petitioner. The manner of concealing the gold clearly establishes knowledge of the Petitioner that the goods were liable to be confiscated under section 111 of the Act. The Adjudicating Authority has rightly held that the manner of concealment revealed his knowledge about the prohibited nature of the goods and proved his guilt knowledge/mens-rea - Admittedly, petitioner would always bring back goods for others. Petitioner, who travels internationally so often cannot be permitted to contend that he was not aware of the law and that he was not aware of the contents of the packets that he was carrying. A person carrying any article on his belonging would be presumed to be aware of the contents of the articles being carried by him. The Supreme Court of India in STATE OF MAHARASHTRA VERSUS NATWARLAL DAMODARDAS SONI 1979 (12) TMI 78 - SUPREME COURT has held that smuggling particularly of gold, into India affects the public economy and financial stability of the country. Penalties - HELD THAT - For the contravention Petitioner was liable to be imposed penalty not exceeding the value of the goods. Petitioner brought in 24 Karat Gold, collectively weighing 3203.900 gm. totally valued at Rs. 88,42,764/-. Thus the penalty that could be imposed was upto Rs. 88,42,764/- but only a penalty of Rs. 10,00,000/- was imposed on the petitioner. It is found that the penalty imposed is not disproportionate in the facts and circumstances of the case. There are no merit in the Petition. The same is consequently dismissed.

Summary

Issues Involved:
1. Legality of the composite penalty imposed under Section 112(a) and 112(b) of the Customs Act, 1962.
2. Knowledge and mens rea of the petitioner regarding the concealed gold.
3. Validity of the petitioner's statement under Section 108 of the Customs Act.
4. Proportionality of the penalty imposed.

Summary:

1. Composite Penalty under Section 112(a) and 112(b):
The petitioner challenged the imposition of a composite penalty under Section 112(a) and 112(b) of the Customs Act, 1962, arguing that such a penalty could not be imposed simultaneously. The court noted that this argument was not raised before the Commissioner (Appeals) or in the Revision Application, which primarily sought a reduction in the penalty. The court clarified that Section 112(a) does not require mens rea, whereas Section 112(b) does. The adjudicating authority found the petitioner guilty under both sections, as the petitioner knowingly concealed the gold and did not declare it in the Indian Customs Declaration Form.

2. Knowledge and Mens Rea:
The petitioner contended that he had no knowledge of the gold in his possession and was merely a carrier. However, the court found that the manner of concealment and the petitioner's frequent trips between Kolkata and Bangkok indicated his awareness of the prohibited nature of the goods. The petitioner's statement under Section 108 of the Act, where he confessed to carrying the gold for financial gain, further established his knowledge and mens rea.

3. Validity of the Petitioner's Statement:
The petitioner argued that his statement under Section 108 of the Customs Act was not voluntary and was forced. The court dismissed this contention, noting that there was no retraction of the statement before the concerned authorities. The court relied on the petitioner's own admissions and the lack of any evidence to support the claim of coercion.

4. Proportionality of the Penalty:
The court examined the proportionality of the penalty imposed, which was Rs. 10,00,000/- against the permissible penalty of up to the value of the gold (Rs. 88,42,764/-). The court found the penalty to be proportionate and not excessive, considering the facts and circumstances of the case.

Conclusion:
The court dismissed the petition, upholding the imposition of the composite penalty under Section 112(a) and 112(b) of the Customs Act, 1962, and confirming the findings of the lower authorities regarding the petitioner's knowledge and mens rea. The court also found the penalty imposed to be proportionate and justified.