2019 (2) TMI 891 - AT - Customs

Absolute Confiscation - Gold - prohibited item or not - Held that - Two of the appellants in the present matter brought impugned gold from Bangkok to Gaya International Airport without declaring the same to Customs authorities. I cannot find from the whole proceedings as to how the Customs authorities posted at Gaya International Airport could not detect such huge quantity of gold being removed from Gaya International Airport by passengers on their arrival. I am not able to find any submission from the individual appellants explaining as to how they removed gold on arrival from Bangkok or how they procured gold before they were intercepted at Mugalsarai Railway Station. The individual appellants are not in a position to explain how they procured such quantity of gold. Further, they do not have any document to establish licit acquisition of the same. I, therefore, do not interfere with the order of confiscation of impugned gold and imposition of penalty. However, I find that this Tribunal in the above stated case of Shri Sanjeeb Kumar @ Pappu Kumar and others have held that margin of profit in trade of gold is very less. Appeal allowed in part.

Summary

Issues:
1. Confiscation of impugned gold and imposition of penalties.
2. Redemption fine and penalties challenged by appellants.
3. Appeal by revenue against the order allowing redemption of confiscated gold.

Analysis:
1. The appeals arose from an Order-in-Appeal passed by the Commissioner of Customs, GST & Central Excise, Lucknow, involving the recovery of foreign origin gold and currency from individuals. The impugned gold was confiscated, and penalties were imposed on the individuals under Section 112 of the Customs Act, 1962. The Commissioner allowed redemption of the confiscated gold on payment of a fine but did not interfere with the penalties imposed. The appellants challenged this order before the Tribunal.

2. The revenue also appealed against the order allowing redemption of the confiscated gold, arguing for absolute confiscation. The appellants contended that the redemption fine and personal penalties were excessive. They claimed that the profit margin in the gold trade was low, justifying a reduction in the redemption fine and penalties. The appellants further argued that there was no basis for imposing penalties on them.

3. After considering submissions from both sides, the Tribunal found that the individuals failed to explain how they acquired the gold and lacked documentation for its licit acquisition. The Tribunal dismissed the revenue's appeals, as the Customs authorities at the airport should have detected the gold during departure. The Tribunal reduced the redemption fine from ?25 lakhs to ?15 lakhs and lowered the penalties on the individuals from ?10 lakhs to ?5 lakhs each, citing a previous case regarding the low profit margin in the gold trade. The order of confiscation and penalties was upheld, and applicable Customs duty on the gold was to be paid.

Conclusion:
The Tribunal partially allowed the appeals filed by the individuals, modifying the impugned order by reducing the redemption fine and penalties. The revenue's appeals were dismissed, maintaining the redemption of the confiscated gold. The judgment emphasized the importance of explaining the acquisition of goods and the consideration of profit margins in trade-related penalties.