1993 (8) TMI 87 - CGOVT - Customs

Summary

Issues Involved:
1. Legality of the import of gold.
2. Compliance with customs declaration requirements.
3. Imposition and quantum of redemption fine and penalties.
4. Applicability of precedents in determining fines and penalties.

Issue-wise Detailed Analysis:

1. Legality of the import of gold:
The judgment discusses the legality of importing gold under the existing export and import policy. It was noted that gold appears in part-II of the negative list under miscellaneous items, which means it is restricted and not permitted except against a license or in accordance with a Public Notice. The gold in question was subject to four conditions: stay abroad, quantity restriction, payment of duty in foreign exchange, and freedom to dispose of gold. The judgment clarifies that while gold import is generally prohibited, if these conditions are met, the gold is not considered prohibited. However, in this case, the condition of payment of duty in foreign exchange was not complied with, rendering the import of gold prohibited.

2. Compliance with customs declaration requirements:
The judgment addresses whether non-declaration of gold makes it prohibited. It was argued that a true declaration is not explicitly mentioned as a condition in the relevant notification for importing gold. The judgment further states that a true declaration is universally applicable for all imports under the Customs Act, and mis-declaration or non-declaration does not inherently make the goods prohibited. The judgment distinguishes between dutiable and prohibited goods and emphasizes that the requirement for a declaration is independent unless specified as a condition for import.

3. Imposition and quantum of redemption fine and penalties:
The judgment examines the imposition of redemption fines and penalties. The original authority had ordered the absolute confiscation of the gold and imposed penalties on the individuals involved. The appellate authority reduced the penalties and allowed for redemption of the gold on payment of a fine and duty. The judgment discusses the factors to be considered in determining the quantum of fines, such as the margin of profit and the amount of duty evaded. In this case, the redemption fine of Rs. 75,000/- and a personal penalty of Rs. 35,000/- plus duty of Rs. 58,000/- were deemed reasonable. The judgment also notes that the role of Shri Kamlesh Kumar was peripheral, justifying a token penalty.

4. Applicability of precedents in determining fines and penalties:
The judgment addresses the relevance of precedents in determining fines and penalties. The applicants cited cases like that of Smt. Saranga and Shri Rajesh Verma to argue for lower fines and penalties. However, the judgment clarifies that no two cases are ideally comparable, and each case must be evaluated on its own facts and circumstances. The judgment concludes that the redemption fine and penalty determined by the Collector (Appeals) were reasonable and upheld the operative part of the order.

Conclusion:
The judgment modifies the legal interpretation regarding the import of gold but upholds the operative part of the Collector (Appeals) order, allowing for the release of gold on redemption fine and penalty. The review petition partially succeeds on legal grounds, but the applications for reducing the redemption fine and penalty are rejected. The judgment emphasizes that the import of gold is prohibited without compliance with all conditions, and non-declaration alone does not make goods prohibited unless specified as a condition for import.