2019 (10) TMI 824 - AT - Customs

Seizure of goods - smuggling - gold - prohibited goods or not - confiscation - redemption fine - penalty - HELD THAT - The present case has not arisen as a baggage dispute otherwise this Tribunal would have no jurisdiction in deciding the matter. The seizure was made within the country on suspicion of the gold being smuggled. The gold was not seized as a baggage but it was seized as foreign marked gold with respect to which the possessor of the gold was responsible to prove under Section 123 that it is not smuggled. The appellant could not discharge the responsibility. In fact the gold was smuggled as it was not declared by the appellant while bringing into India. There is sufficient reason in the appeal showing that the appellant was returning to India after a period of 16 years and was ignorant of legal provisions. From the facts recorded in the Order-in-Original, it appears that during investigation, the appellant has fully disclosed the nature of the gold and has produced whatever documents were available with her showing its purchase in USA. There is nothing on record to show that she was trying to mislead the investigating authorities. Section 125 allows redemption in lieu of confiscation in all cases on payment of fine. If the goods are prohibited, the redemption may be allowed but if the goods are not prohibited, such redemption shall be allowed. There is no case where the redemption cannot be allowed at all under this Section. The facts and circumstances of each case need to be taken into account while allowing redemption of prohibited goods. Goods are allowed to be redeemed - Redemption fine upheld - penalty also upheld - appeal disposed off.

Summary

Issues:
- Unlawful possession of gold biscuits
- Burden of proof under Section 123 of Customs Act
- Confiscation and penalty under Sections 111(d) and 112(b)(i)
- Appeal for redemption and waiver of penalty
- Relevant case laws cited
- Tribunal's decision on redemption and penalty

Unlawful possession of gold biscuits:
The appellant, a USA Citizen, was found with yellow gold biscuits at the Hyderabad airport. She had brought them from the USA but failed to declare them to Customs upon arrival in India. The Customs seized the gold under suspicion of smuggling, as per Section 123 of the Customs Act, shifting the burden of proof to the possessor to show the goods are not smuggled.

Burden of proof under Section 123 of Customs Act:
The appellant could not prove the gold was not smuggled, leading to absolute confiscation of the gold bars and a penalty under Sections 111(d) and 112(b)(i) of the Customs Act, 1962. The Additional Commissioner ordered the confiscation and penalty, which was upheld by the first appellate authority.

Confiscation and penalty under Sections 111(d) and 112(b)(i):
The Tribunal noted the appellant's ignorance of customs requirements due to returning to India after 16 years. Despite the smuggling offense, the appellant cooperated during the investigation, disclosing the gold's nature and origin. The Tribunal found grounds for redemption under Section 125 of the Customs Act, allowing the appellant to redeem the gold on payment of a redemption fine of ?2,50,000. The penalty of ?1,50,000 under section 112 was upheld.

Appeal for redemption and waiver of penalty:
The appellant appealed for redemption and waiver of the penalty, citing her eligibility as an Indian origin passenger and lack of awareness about customs regulations. The Tribunal considered her circumstances and decided to allow redemption of the gold but upheld the penalty imposed under section 112.

Relevant case laws cited:
The appellant's counsel cited cases from CESTAT, Allahabad, and Andhra Pradesh, supporting their arguments for redemption. The Tribunal considered these references but made the decision based on the specific facts of the case.

Tribunal's decision on redemption and penalty:
The Tribunal allowed redemption of the gold biscuits on payment of the redemption fine of ?2,50,000, considering the appellant's cooperation and lack of intent to mislead authorities. The penalty of ?1,50,000 under section 112 was upheld. The appeal was disposed of in accordance with these decisions.