2022 (4) TMI 1216 - AT - Customs

Smuggling - Gold Jewellery - Currency - Sony Bravia TV - entire case is based on the statements recorded from the appellant Shri Rajan Ran - retraction of statements - Absolute Confiscation - penalty - HELD THAT - The department does not have a contention that the appellant does not fulfill the criteria of an eligible passenger. In case an eligible passenger intends to import gold, he has to make a declaration at the airport. The case of the department is that the appellant has not declared any dutiable goods. It is also stated that the declaration form filled in by him was collected by the customs officers. The learned counsel for appellant has asserted that as no such declaration form has been made part of the relied upon documents, the allegation that the appellant has attempted to smuggle the gold without declaring cannot be accepted. Though it may be true that the declaration has not been made part of the relied upon documents, it has to be seen that the appellant was intercepted at the exit gate - There is no statement from Vasu Arumugam and the department has not been able to establish the connection between the appellant and Shri Vasu Arumugam. For these reasons, there are no doubt to hold that the view taken by the adjudicating authority that the goods are liable for confiscation are legal and proper and does not merit interference. The appellant has to be given an option to redeem the gold jewellery and currency and the Sony Bravia TV which was imported been carried by him. The appellant, however, has to pay redemption fine to the tune of 10% of the value of the goods as noted in the impugned order as redemption fine for release of the gold jewellery, currency and Sony Bravia TV. Penalty imposed upon the appellant - HELD THAT - There was no attempt to conceal the gold jewellery by the appellant. However, he has proceeded through the green channel and about to exit the airport without paying the customs duty. A penalty of ₹ 55 lakhs under section 112(a) of the Customs Act, 1962 seems to be on the higher side and we hold that penalty of ₹ 10 lakhs would suffice to the circumstances. The penalty imposed upon shri Vasu Arumugam is reduced from ₹ 10 lakhs to ₹ 5 lakhs. The impugned order is modified to the extent of setting aside the absolute confiscation and allowing the appellant to redeem all items confiscated by paying ₹ 25,00,000/- as redemption fine on all the items confiscated - penalty imposed on the appellant Shri Rajan Ran is reduced from ₹ 55,00,000/- to ₹ 10,00,000/- and the penalty on other appellant Shri Vasu Arumugam is reduced from ₹ 10,00,000/- to ₹ 5,00,000/-. Appeal allowed in part.

Summary

Issues Involved:
1. Non-declaration of dutiable goods.
2. Eligibility of the appellant as a passenger to import gold.
3. Confiscation of goods and imposition of penalties.
4. Validity of statements recorded under coercion.
5. Application of relevant notifications and legal provisions.

Issue-wise Detailed Analysis:

1. Non-declaration of Dutiable Goods:
The appellant was intercepted at Chennai Airport carrying 9994.38 grams of gold jewelry, foreign currency, and a Sony Bravia TV. The Department of Revenue Intelligence (DRI) alleged that the appellant did not declare these dutiable goods, intending to smuggle them without paying customs duty. The appellant contended that he was waiting to declare the items and had sufficient foreign currency to pay the duty. However, the tribunal noted that the appellant proceeded through the green channel, indicating no dutiable goods, and was about to exit the airport, which supported the department's case of non-declaration.

2. Eligibility of the Appellant as a Passenger to Import Gold:
The appellant argued that he was an eligible passenger under Notification No. 31/2003-Cus, which allows the import of gold jewelry up to 10 kilograms by eligible passengers upon payment of customs duty. The tribunal acknowledged that the appellant met the criteria of an eligible passenger and had sufficient foreign currency to pay the customs duty. However, the tribunal emphasized that the appellant should have declared the goods upon arrival.

3. Confiscation of Goods and Imposition of Penalties:
The adjudicating authority ordered the confiscation of the gold jewelry, TV, and foreign currency under various sections of the Customs Act, 1962, and imposed penalties on the appellant and his alleged accomplice. The tribunal found that although the goods were liable for confiscation, the appellant, being an eligible passenger, should have been given the option to redeem the goods by paying a redemption fine. The tribunal modified the order to allow the appellant to redeem the confiscated items by paying a redemption fine of 10% of the value of the goods and reduced the penalties imposed on the appellant and his accomplice.

4. Validity of Statements Recorded Under Coercion:
The appellant claimed that his statements were recorded under coercion and retracted them at the earliest opportunity. The tribunal noted that the appellant did not lodge any formal complaint regarding the alleged coercion. The tribunal held that the retracted statements could not be entirely discarded but also considered the appellant's eligibility to import gold and the lack of concealment of the goods.

5. Application of Relevant Notifications and Legal Provisions:
The tribunal referred to Notification No. 31/2003-Cus and relevant sections of the Customs Act, 1962, and Foreign Trade (Development and Regulation) Act, 1992. The tribunal emphasized that eligible passengers are entitled to import gold jewelry upon payment of customs duty and that absolute confiscation should be an exception. The tribunal cited precedents where eligible passengers were allowed to redeem confiscated goods by paying a fine.

Conclusion:
The tribunal modified the impugned order, allowing the appellant to redeem the confiscated gold jewelry, TV, and foreign currency by paying a redemption fine of ?25,00,000 and appropriate customs duty. The penalty on the appellant was reduced from ?55,00,000 to ?10,00,000, and the penalty on the accomplice was reduced from ?10,00,000 to ?5,00,000. The appeals were partly allowed, and the decision was pronounced in open court on 25.4.2022.