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2025 (1) TMI 1465 - HC - CustomsSmuggling of Gold - Absolute Confiscation - whether the absolute confiscation without objection for redemption of the golds carried in person are in violation of Baggage Rules 1998? - HELD THAT - The import of gold is not prohibited. Rather it is restricted and regulated. Therefore any person carrying gold ornament ought to have paid appropriate customs duty if whether such gold jewellery/ornament was worn in person or kept in the baggage - Absolute confiscation of the imported quantity of gold in the hands of each of these petitioners cannot be ordered to be absolutely confiscated under Section 125 of the Customs Act 1962. The option ought to have been given to the owner of such gold to redeem in lieu of confiscation under Section 125 of the Customs Act 1962. Therefore the Order rejecting the request for redemption or reexport cannot be sustained - Considering the fact that the goods are not absolutely confiscable the Court is of the view that the Impugned Order dated 25.10.2021 passed by the 4th respondent holding the goods are not redeemable and is not liable to be confiscated is to be interfered with. Conclusion - The goods not declared under customs regulations are liable for confiscation but absolute confiscation is not mandatory if the goods are not inherently prohibited. The impugned order affirming the absolute confiscation of the gold set aside. The case remitted to the Joint Commissioner of Customs to impose a redemption fine under Section 125 of the Customs Act. Petition allowed.
Issues Presented and Considered
The primary legal issue considered in this judgment is whether the petitioners, who imported gold jewelry without declaring it under the Baggage Rules, 1998 and Section 77 of the Customs Act, 1962, are entitled to redeem the gold jewelry that was attempted to be smuggled. The judgment also considers whether the absolute confiscation of the gold by the customs authorities was justified and if the petitioners were eligible for any exemptions under the relevant customs notifications. Issue-Wise Detailed Analysis 1. Relevant Legal Framework and Precedents The legal framework involves the Customs Act, 1962, particularly Sections 77, 111, 112, 114, and 125, and the Baggage Rules, 1998. The case also references Notification No.12/2012-Customs and various precedents from Indian courts, including judgments from the Supreme Court and High Courts, which interpret the conditions under which goods are considered prohibited or restricted. 2. Court's Interpretation and Reasoning The Court analyzed whether the petitioners' actions constituted smuggling under the Customs Act and whether the gold jewelry could be classified as bona fide baggage. The Court examined the applicability of exemptions under Notification No.12/2012-Customs and whether the petitioners qualified as "eligible passengers" under the notification's criteria. 3. Key Evidence and Findings The evidence included statements from the petitioners and the trip organizer, Mr. P.S. Ranganathan, detailing the arrangements for the gold's acquisition and transport. The Court noted that the petitioners attempted to smuggle gold by wearing it and not declaring it to customs authorities upon arrival. 4. Application of Law to Facts The Court applied the Customs Act and Baggage Rules to determine that the petitioners were not entitled to duty exemptions and had violated customs regulations by not declaring the gold. The Court found that the gold was not bona fide baggage and was subject to confiscation. 5. Treatment of Competing Arguments The petitioners argued that the gold was not prohibited and should be redeemable under Section 125 of the Customs Act. They contended that the customs notification was inapplicable to their situation. The respondents, however, maintained that the gold was liable for confiscation due to non-compliance with customs regulations. 6. Conclusions The Court concluded that while the petitioners violated customs regulations, the gold was not absolutely confiscable. The petitioners should have been given an option to redeem the gold under Section 125 of the Customs Act. Significant Holdings 1. Core Principles Established The judgment established that goods not declared under customs regulations are liable for confiscation, but absolute confiscation is not mandatory if the goods are not inherently prohibited. The Court emphasized the importance of offering redemption options under Section 125 of the Customs Act. 2. Final Determinations on Each Issue The Court quashed the impugned order affirming the absolute confiscation of the gold and remitted the case to the Joint Commissioner of Customs to impose a redemption fine under Section 125 of the Customs Act. The petitioners are to be given an opportunity to be heard before final orders are passed.
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