2024 (12) TMI 1156 - AT - Customs

Jurisdiction and maintainability of the appeal - Absolute confiscation of prohibited goods - Gold Jewelery - denial of redemption. Jurisdiction and maintainability of appeal - HELD THAT - The assessment is the primary determinant for clearance of goods under customs law and, consequently, inalienable from the appellate jurisdiction of the Tribunal. Even the excluded jurisdiction, under proviso to section 129A of Customs Act, 1962, other than shortlanding , operates only to the extent of not being a consequence of assessment or re-assessment, where payment of drawback is concerned, under section 17 or section 18 of Customs Act, 1962 and, even if assessment is concerned, as in baggage , only to the extent that the original authority has ordered by recourse to empowerment in Rules framed under the aegis of section 81 of Customs Act, 1962. Any other interpretation of the amendment effected to Customs Act, 1962 in 1984 for restoration of revision jurisdiction would be contrary to Article 323B of the Constitution besides being arbitrary denial of right to appeal before the highest court of the land. Reflief of redemption of goods - HELD THAT - There are no doubt that the appellant was ineligible to import gold jewelry as baggage of person arriving in India from abroad. The appellant had not denied his intent to evade duty that was leviable from the lack of eligibility. The confiscation of goods for non-declaration under section 77 of Customs Act, 1962, implicit in passage through green channel and, thereby, empowered by section 111(l) and section 111(m) of Customs Act, 1962, is not to be faulted. There is nothing on record, other than an original finding at the first appellate stage, to suggest that a passenger may not carry gold jewelry in excess of entitlement of duty free import as long as duty liability is borne - That finding in the impugned order is without reference to any notice issued to the appellant herein; the substance of the finding, too, does not carry the authority of careful consideration of the nature and contents of the stipulation of the Reserve Bank of India (RBI). The tariff does not determine licencing restrictions but deployment of the same code system enables easy cross referencing; here, if the goods, indeed, are semi-manufactured , the goods may be restricted for import. There is, however, no evidence to suggest that this suspicion was, at any time, subjected to scrutiny by expert ascertainment; indeed, no effort was on display to establish conformity of goods with the description corresponding to tariff item 7108 1300 of First Schedule to Customs Tariff Act, 1975. The proposition for confiscation on the ground of being prohibited does not sustain. As a State, the exchequer does not survive on confiscatory proceeds. Gold and articles made of gold are goods and not vested in the government. Illicit import of articles of gold must be deterred but not by alienation of possession from its owner. The cause for restricting import of semi wrought gold is monetarily measurable and that would have sufficed as consequence of wrongful import. There was, thus, no justification for absolute confiscation of the impugned goods either from being restricted or despite being restricted. It is found appropriate to set aside the absolute confiscation to permit the gold jewelry to be redeemed on payment of fine of ₹ 50,000 and for penalty to be reduced to ₹ 50,000 - Appeal is, accordingly, disposed off.

Summary

Issues Involved:

1. Jurisdiction and maintainability of the appeal.
2. Confiscation of gold jewelry and denial of redemption.
3. Applicability of customs and foreign trade regulations to the import of gold jewelry as baggage.

Detailed Analysis:

1. Jurisdiction and Maintainability of the Appeal:

The primary issue was whether the Tribunal had jurisdiction to entertain the appeal concerning the confiscation of gold jewelry. The Customs Act, 1962, outlines specific provisions for appeals and revisions, distinguishing between the appellate jurisdiction of the Tribunal and the revision jurisdiction of the Central Government. The Tribunal's jurisdiction is primarily concerned with assessments under section 17 of the Customs Act, 1962, which involves both the rate of duty and valuation. The revision jurisdiction, on the other hand, is limited to specific exclusions such as baggage, short landing, and payment of drawback, which do not involve assessment. The Tribunal concluded that the appeal was maintainable as it involved assessment-related issues, which are within its jurisdiction, and not merely a matter of baggage under the exclusions specified in section 129DD of the Customs Act, 1962.

2. Confiscation of Gold Jewelry and Denial of Redemption:

The appellant challenged the absolute confiscation of a gold chain valued at Rs. 5,41,450, carried from Abu Dhabi, arguing for an option to redeem the goods. The first appellate authority had upheld the confiscation without the option of redemption, based on the finding that the goods were not bona fide baggage and were carried in contravention of customs regulations. The Tribunal noted that the confiscation was justified under section 111(l) and section 111(m) of the Customs Act, 1962, due to non-declaration and the appellant's intent to evade duty. However, the Tribunal found no justification for absolute confiscation, emphasizing that the exchequer should not rely on confiscatory proceeds and that the wrongful import could be addressed through monetary penalties. Consequently, the Tribunal set aside the absolute confiscation, allowing redemption on payment of a fine of Rs. 50,000 and reducing the penalty to Rs. 50,000.

3. Applicability of Customs and Foreign Trade Regulations:

The Tribunal examined whether the import of gold jewelry as baggage was in violation of customs and foreign trade regulations. The first appellate authority had relied on the Reserve Bank of India's circular and the Foreign Trade Policy to justify the prohibition on importing gold jewelry without declaration. The Tribunal clarified that while the appellant was ineligible to import gold jewelry as part of bona fide baggage, the lower authorities had not substantiated the classification of the goods as prohibited or restricted under the relevant tariff item. The Tribunal found that the proposition for confiscation on the ground of being prohibited was unsustainable due to a lack of evidence and expert scrutiny to establish the goods' conformity with the alleged tariff classification.

In conclusion, the Tribunal ruled that the appeal was within its jurisdiction, set aside the absolute confiscation, and allowed the appellant to redeem the gold jewelry upon payment of a fine, thereby providing a balanced resolution in accordance with the rule of law and the principles of justice.