2021 (6) TMI 858 - AT - Customs

Absolute Confiscation - smuggling - Gold Jewellery - eligible passenger in terms of N/N. 12/2012 - personal baggage - prohibited goods or not - onus of proof - penalty u/s 112 and 114 AA of the Customs Act - HELD THAT - The appellant was a passenger in transit from Bangkok to Kathmandu. The appellant was admittedly found in the transit lounge at IGI Airport, T-3, Delhi, meant for international passengers, where they can wait for the purpose of changing flight without entering into India, as such they are not required to go though any formality of immigration as well as under the provision of Customs Law. It is also found that it is admitted fact that the appellant was waiting for his next flight in the transit lounge of Terminal No. 3 of IGI Airport, Delhi, and he was not intermixing with any other person or trying to deliver any goods or any packet or jewellery for the purpose of smuggling. It is further found that the appellant have not violated any of the provisions under the Customs Act, 1962 read with the Foreign Trade Policy. The whole case of Revenue is misconceived and has no legs to stand. Also, the source of gold jewellery he was wearing is cogently explained, which has not been found to be untrue. Penalty set aside - appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Absolute confiscation of gold jewellery.
2. Imposition of composite penalty under Section 112 and 114AA of the Customs Act.
3. Applicability of Baggage Rules and Customs formalities for a transit passenger.
4. Validity of the Revenue's allegations and the appellant's defense.

Detailed Analysis:

1. Absolute Confiscation of Gold Jewellery:
The appellant was intercepted at IGI Airport, New Delhi while in transit from Bangkok to Kathmandu. The Customs Intelligence Unit (CIU) officers seized gold jewellery weighing 547.5 gm valued at ?14,77,073/- from the appellant. The jewellery was seized under Section 110 of the Customs Act as the appellant failed to produce any documentary evidence for the lawful possession of the gold jewellery, which appeared to be of commercial quantity.

2. Imposition of Composite Penalty:
The appellant was imposed a composite penalty of ?3 lakhs under Section 112 and 114AA of the Customs Act for allegedly attempting to illegally import gold jewellery. The adjudicating authority ordered absolute confiscation of the jewellery and imposed the penalty, which was upheld by the Commissioner (Appeals).

3. Applicability of Baggage Rules and Customs Formalities for a Transit Passenger:
The appellant contended that as a transit passenger, he was not required to pass through customs check post or declare personal baggage or ornaments worn on the body. The Tribunal agreed, stating that a transit passenger is not required to comply with customs formalities as they do not enter India but merely change flights. The Tribunal relied on precedents such as K.R. Ahmad Shah vs. Additional Collector of Customs and others, which clarified that goods in transit do not constitute import into India.

4. Validity of the Revenue's Allegations and the Appellant's Defense:
The appellant provided documentary evidence, including a purchase bill and bank statement, showing the purchase of gold from M/s O.P. Jewellers. The Tribunal found that the appellant's explanation for the source of gold jewellery was cogent and not disproven by the Revenue. The Tribunal dismissed the Revenue's allegations, stating there was no evidence of the appellant attempting to smuggle gold into India or intermixing with any person for smuggling purposes.

Conclusion:
The Tribunal held that the appellant, being a transit passenger, was not required to comply with customs formalities. The confiscation of gold jewellery and the imposition of penalties were deemed misconceived and ab initio void. The appeal was allowed, the impugned order set aside, and the customs officers were directed to return the seized gold jewellery to the appellant within thirty days.

Pronouncement:
The judgment was pronounced on 23.06.2021.