2023 (5) TMI 149 - HC - Customs

Smuggling - two gold chains and two gold bars - concealing in the shoes - baggage rules - Absolute Confiscation - HELD THAT - The confiscation of goods is dealt with in Chapter-XIV of the Customs Act. Section 125 deals with an option to pay fine in lieu of confiscation. Under section 125 whenever confiscation of any goods is authorized under the Act, the Adjudicating Authority may give to the owner of the goods an option to pay in lieu of confiscation such fine as the Adjudicating Authority thinks fit. There is, therefore, a discretion vested in the Adjudicating Authority whether to adopt this course of action or not. The Additional Commissioner acting on first instance had exercised the discretion not to give the option to the Petitioner and reasons in support of use of this discretion recorded found in the order-in-original. The Additional Commissioner referred to inconsistent submissions and the fact that there is serious doubt about the ownership of the goods and held that the manner in which the incident has occurred gives rise to strong impression that the Petitioner was carrying goods for monetary consideration. On this grounds, the Additional Commissioner refused to give option of redemption of goods to the Petitioner. The Revisional Authority has done an analysis of facts and found that the quantity is large, it was consciously concealed which revealed the intention of the Petitioner and considering the overall circumstances, the Revisional Authority restored the order-in-original of absolute confiscation of goods and penalty. The parameters of the writ jurisdiction should be kept mindful. The petition arises from use of discretion. The Revisional Authority has considered all the facts necessary for exercise of discretion. All relevant facts have been taken into consideration. Judicial precedents are analysed and tests therein are applied. Petition dismissed.

Summary

Issues involved:
1. Petitioner concealing gold in baggage upon arrival from Dubai.
2. Confiscation of gold and imposition of penalty under Customs Act.
3. Appeal before Commissioner of Customs (Appeals) and subsequent Revision filed by Department.
4. Discretion of Adjudicating Authority in granting option to pay fine in lieu of confiscation.
5. Review of decisions by Revisional Authority.

Issue 1: Petitioner concealing gold in baggage upon arrival from Dubai
The Petitioner arrived in Mumbai from Dubai and concealed two gold chains and two gold bars in his shoes, which were discovered during a security check at the airport.
The Petitioner initially denied carrying any gold but later admitted to concealing the items in his baggage.

Issue 2: Confiscation of gold and imposition of penalty under Customs Act
The Additional Commissioner of Customs confiscated the gold chains and gold bars valued at Rs. 72,18,429/- under specific sections of the Customs Act and imposed a penalty of Rs. 7,50,000/- on the Petitioner.
The Commissioner (Appeals) allowed redemption of the goods on payment of a fine but upheld the penalty.

Issue 3: Appeal before Commissioner of Customs (Appeals) and Revision filed by Department
The Petitioner appealed before the Commissioner of Customs (Appeals) who allowed redemption of goods on payment of a fine while maintaining the penalty.
The Department filed a Revision under section 129DD of the Customs Act, leading to the Revisional Authority reversing the order of the Commissioner (Appeals) and restoring the absolute confiscation of goods and penalty.

Issue 4: Discretion of Adjudicating Authority in granting option to pay fine in lieu of confiscation
The Adjudicating Authority has the discretion under section 125 of the Customs Act to allow the owner of goods to pay a fine in lieu of confiscation.
The Additional Commissioner chose not to grant this option to the Petitioner based on doubts regarding ownership and suspicions of carrying goods for monetary gain.

Issue 5: Review of decisions by Revisional Authority
The Revisional Authority considered the quantity of concealed goods, the conscious concealment, and the deterrent effect of absolute confiscation in upholding the original order.
The Revisional Authority's decision was based on a thorough analysis of facts, legal precedents, and the exercise of discretion, leading to the dismissal of the writ petition challenging the decision.