2024 (3) TMI 1193 - HC - Customs

Smuggling - Gold - baggage rules - petitioners have not given proper declaration in respect of the gold they were bringing in even if it was allegedly in the form of jewellery or bangles - existence of mens rea on the part of the petitioners to smuggle gold into India or not - HELD THAT - The import and export of goods into and out of India are subject to the provisions of the Foreign Trade (Development and Regulation) Act 1992. In exercise of the powers conferred by Section 3 read with Section 4 of the Foreign Trade (Development and Regulation) Act 1992 (22 of 1992) the Central Government has framed the Foreign Trade (Exemption from Application of Rules in Certain Cases) Order 1993. As per Rule 3(h) of this Order a passenger of Indian Origin or having a valid Indian passport and who has a stay of more than six months abroad is allowed to import gold subject to certain conditions. An international passenger is required to file International Customs Declaration Form (I.C.D.) with the Customs Department under Section 77 of the Customs Act 1962. Merely wearing the bangles on body by the petitioners does not obviate the statutory requirement of filing an ICD form with the Customs Department. Further the fact of non-filing this ICD Form and not submitting the same to the Customs Department has not been disputed by the petitioners. The petitioners were permitted to redeem only on payment of redemption fine and appropriate customs duty so that the gold bangles would be cleared for domestic consumption. However the option of re-export of gold bangles does not provide any right on the petitioner to get the gold bangles cleared for home consumption and it is under these circumstances that no duty is demanded on the option of re-export of gold bangles - there are no illegality or perversity on the part of the adjudicating authority at the first instance and then by the Commissioner of Appeals subsequently while modifying the order both of which subsequently stood affirmed by the CESTAT vide the impugned order under challenge in the present case. In the instant case the petitioner No. 1 was in possession of the gold bangles while passing through the Green Channel of the Customs at the Rajiv Gandhi International Airport Shamshabad. Despite possessing the gold bangles which are dutiable goods the petitioners neither adopted the Red Channel nor submitted the ICD Form to the Customs Department and thus tried to take the undue advantage of the Green Channel facility at the Customs violating the provisions of Section 77 of the Act - since the petitioners are not eligible passengers in terms of the provisions of the Foreign Trade (Development and Regulation) Act 1992 read with the Foreign Trade (Exemption from Application of Rules in Certain Cases) Order 1993 the original authority was correct in finding the petitioners ineligible to import the gold bangles. Thus the order of the original authority to confiscate the gold bangles in terms of Section 111(1) of the Act cannot be found fault with. Another reason why this Court is not inclined to entertain the Writ Petition is the fact that the petitioners have voluntarily availed the option that was floated by the adjudicating authority at the first instance. Having availed the option floated and having paid the redemption fine and customs duty while redeeming the gold bangles the petitioners cannot now be permitted to turn around and challenge the order which he has voluntarily complied with. Petition dismissed.

Issues Involved:
1. Legality of the Order-in-Original No. 108/2014-Adjn. Cus (ADC), dated 30.12.2014.
2. Legality of the order of the Appellate Authority dated 26.03.2018 and consequential orders.
3. Whether the petitioners' actions constituted smuggling under the Customs Act, 1962.
4. Validity of the imposition of customs duty, fine, and penalty on the petitioners.

Summary:

Issue 1: Legality of the Order-in-Original No. 108/2014-Adjn. Cus (ADC), dated 30.12.2014
The petitioners, who returned from the USA with five gold bangles worth Rs. 8,50,185/-, were found to have not declared the gold, which exceeded the permissible limit under the Foreign Trade Policy. The Adjudicating Authority ordered confiscation under \u/s\ 111(i) of the Customs Act, 1962, but allowed redemption upon payment of fine and penalty under \u/s\ 112(a)(ii) and \u/s\ 114(AA) and also provided an option to re-export the gold bangles.

Issue 2: Legality of the order of the Appellate Authority dated 26.03.2018 and consequential orders
The Appellate Authority dismissed the petitioners' appeal and partly allowed the respondent-Department's appeal by modifying the Order-in-Original to impose customs duty at 35% plus cess on the gold. This order was affirmed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 01.04.2019.

Issue 3: Whether the petitioners' actions constituted smuggling under the Customs Act, 1962
The petitioners argued there was no mens rea to smuggle as the bangles were worn visibly. However, the Court noted that non-declaration and exceeding the permissible limit constituted smuggling under \u/s\ 2(39) of the Customs Act. The gold bangles, being pure gold with 99.9 purity, were not considered personal jewellery, thus falling under restricted items as per the Foreign Trade Policy.

Issue 4: Validity of the imposition of customs duty, fine, and penalty on the petitioners
The Court held that the petitioners' failure to declare the gold and their attempt to use the green channel without filing an International Customs Declaration Form violated \u/s\ 77 of the Customs Act. The adjudicating authority's imposition of customs duty, fine, and penalty was justified. The petitioners' option to re-export did not exempt them from these liabilities.

Conclusion:
The Court dismissed the Writ Petition, finding no illegality or perversity in the orders of the Adjudicating Authority, the Appellate Authority, and the CESTAT. The petitioners' actions were deemed to constitute smuggling, and the penalties imposed were upheld.

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