2016 (5) TMI 1114 - CGOVT - Customs

Confiscation of goods absolutely - Non-entitlement to redemption fine - Seizure of smuggled 1000 gms imported gold - walked through the green channel at the airport without made declaration - Held that - since the respondent was not eligible to import gold and that too undeclared and in a substantial quantity, the same cannot be treated as bona fide baggage in terms of section 79. The said gold is imported in violation of the Foreign trade Policy; provisions of section 3(3) and 11(1) of foreign Trade (Development & Regulation) Act, 1962. Government holds that impugned goods constitute prohibited goods liable to confiscation under section 111(d) and (I) of the Customs Act,1962. Government finds that the plea is in order keeping in view the conduct of the applicant in not declaring the impugned goods and attempting to pass through the green channel. It is fact on record that even when questioned by officers whether he has any gold or contraband its, he answered in the negative had the applicant desired to import the gold as an eligible passenger, he ought to have approached the Customs and made the requisite declaration. Therefore, government upholds the Department s contention that absolute confiscation is legally warranted. Whether passenger is a carrier of the impugned goods or not - Held that - Government finds no merit in the contention of both the Commissioner (Appeals) and the respondent on the ground that the passenger is a carrier is not part of Show cause Notice and, therefore, cannot be raised at a later stage. The subsequent claim of the respondent that the gold of his roommates also belonged to him as they owed money to him is clearly an afterthought. He had already admitted in his voluntary statement that only part of the gold belonged to him and rest had been carried for this roommates for a monetary consideration. Government also notes that the statement recorded before the Customs officers is valid evidence. Government further finds that the provision for re-export of baggage is available under Section 80 of the Customs Act, 1962. However, this Section is applicable only to cases of bonfire baggage declared to Customs, which the applicant failed to do, thus the applicant is not eligible for re-export of impugned goods. Therefore, in view of various decisions the order of Commissioner (Appeals) allowing the request of the respondent for re-export of goods is not legal and proper and cannot be allowed. Government also finds no force in the plea of the respondent that the confiscation of the impugned goods is not valid as any Show Cause Notice for confiscation of the goods is to be issued under Section 124 only and present notice mentions 111 (d) & (I), as the Show Cause Notice clearly mentions in the beginning and in the concluding para that is issued under Section 124 of the customs Act, 1962. Therefore, the Commissioner (Appeals) has erred in allowing re-export of the impugned goods on payment of redemption fine. - Decided in favour of revenue

Issues Involved:
1. Legality of the re-export of confiscated gold.
2. Eligibility of the passenger to import gold.
3. Determination of whether the gold is considered "prohibited goods."
4. Validity of the passenger's claim of ownership of the gold.
5. Admissibility of the passenger's statement under Section 108 of the Customs Act.
6. Applicability of Section 80 of the Customs Act for re-export of goods.
7. Correctness of the Show Cause Notice issued under Section 124 of the Customs Act.

Detailed Analysis:

1. Legality of the Re-export of Confiscated Gold:
The Department contended that the appellate authority's decision to allow the re-export of the gold on payment of a redemption fine is incorrect. The appellate authority reduced the redemption fine from Rs. 12,50,000/- to Rs. 6,00,000/- and allowed re-export, which the Department argued makes smuggling an attractive proposition. The Government upheld the Department's plea for absolute confiscation, stating that the passenger's conduct of not declaring the gold and attempting to smuggle it warranted absolute confiscation.

2. Eligibility of the Passenger to Import Gold:
The passenger did not fulfill the conditions stipulated under Notification No. 12/2012-Cus dated 17/03/2012 and Rule 6 of the Baggage Rules, 1998. The passenger was not eligible to import the gold as he did not declare it and was not in possession of foreign currency for the payment of duty. The Government held that the passenger was ineligible to import the gold, thus supporting the Department's contention.

3. Determination of Whether the Gold is Considered "Prohibited Goods":
The Government examined whether the gold is "prohibited goods" under Section 2(33) of the Customs Act, 1962. Citing the Supreme Court's rulings in Om Prakash Bhatia vs. Commissioner of Customs and Samynathan Murugesan vs. Commissioner, the Government concluded that the gold, being undeclared and imported without fulfilling the eligibility criteria, is considered prohibited goods and is liable for confiscation under Section 111(d) and (i) of the Customs Act.

4. Validity of the Passenger's Claim of Ownership of the Gold:
The passenger initially admitted that only 300 grams of the gold belonged to him and the rest belonged to his roommates. Later, he retracted this statement, claiming ownership of the entire gold. The Government found this retraction to be an afterthought, noting that the initial statement was a voluntary admission and binding. The Government rejected the passenger's claim of ownership and upheld the Department's view that the passenger acted as a carrier for the gold.

5. Admissibility of the Passenger's Statement Under Section 108 of the Customs Act:
The Government emphasized that statements made before Customs officers under Section 108 of the Customs Act are admissible evidence. The Supreme Court has upheld this in various cases, including Surjeet Singh Chhabera vs. Union of India and Naresh J. Sukhawani vs. Union of India. The Government found the passenger's initial statement valid and binding, dismissing the subsequent retraction as an afterthought.

6. Applicability of Section 80 of the Customs Act for Re-export of Goods:
Section 80 of the Customs Act allows re-export of bona fide baggage declared to Customs. Since the passenger did not declare the gold, the Government held that he was not eligible for re-export under this section. The Government cited similar cases, such as Hemal K Shah and CC Kolkata vs. Grand Prime Ltd, to support its decision.

7. Correctness of the Show Cause Notice Issued Under Section 124 of the Customs Act:
The respondent argued that the Show Cause Notice for confiscation should be issued under Section 124 of the Customs Act. The Government clarified that the notice clearly mentioned Section 124, along with Sections 111(d) and (i), and thus found no merit in the respondent's plea.

Conclusion:
The Government allowed the Department's plea for absolute confiscation of the gold, modifying the Order-in-Appeal to this extent. The revision application was thus allowed, and the impugned gold was ordered to be absolutely confiscated.

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