2024 (1) TMI 469 - AT - Customs

Absolute Confiscation - Smuggling - Baggage Rules - Prohibited goods or not - allegations are that appellants did not opt for red channel to declare the gold nor did they file any declaration as required under the Notification - it is sought that gold recovered was allowed to be redeemed on payment of redemption fine or permitted for re-export and penalties were imposed on the three of the appellants - HELD THAT - In the instant case, it is on record that the four passengers had gone to Bangkok on 05.06.2019 and had returned on 08.06.2019. Therefore, the appellants did not satisfy the requirements of the aforesaid notification in order to be eligible to import the gold legally. It is also on record that the appellants were intercepted near the exit gate. The argument that they were prevented from making the declaration is clearly an afterthought. The gold was recovered from their person. It is also noted that the appellants, in their respective statements have accepted that there were aware of the Customs procedures for passenger clearance, and that Gold was dutiable. Consequently, the argument that there is no of concealment or attempt to smuggle cannot be accepted. The High Court of Gujarat in the case BHARGAVRAJ RAMESHKUMAR MEHTA VERSUS UNION OF INDIA AND 1 2018 (3) TMI 284 - GUJARAT HIGH COURT held that attempt to smuggle by concealing the same, and breaching the condition for the import of such goods would make them prohibited goods in terms of Section 2(33) of the Customs Act, 1962. Further, in the case at hand, the facts are the appellants were carrying gold in their person and were intercepted near the exit gate of the Customs Baggage Hall, which clearly establishes their intention to smuggle the Gold - Failure to check the goods on the arrival at the customs station and payment of duty at the rate prescribed, would fall under the second limb of Section 112(a) of the Act, which states omission to do any act, which act or omission, would render such goods liable forconfiscation under Section 111 of the Act, and clause (b) to Section 111 of the Act covers the persons involved. As per the facts of the case, the seizure of gold from the appellants, as recorded in the panchnama and admitted in their respective statements is undisputed. It is also established that the gold was of foreign origin. It is also established that the appellants were attempting to smuggle the gold without payment of duty - It is also noted that legal import of gold is governed by certain conditions which the appellant do not fulfil. Therefore, the gold recovered from the appellants is liable for absolute confiscation. Appeal of appellant rejected.

Summary

Issues Involved:
1. Legality of the gold import by the appellants.
2. Validity of the customs duty demand based on past import statements.
3. Justification for the redemption and re-export permissions granted by the adjudicating authority.

Summary:

1. Legality of the gold import by the appellants:
The appellants, intercepted at IGI Airport, New Delhi, were found carrying 5218 gms of gold without declaring it at the Red Channel as mandated by the Baggage Rules, 2016. They were deemed "ineligible passengers" under Notification No. 50/2017-Cus due to their frequent travels, which did not meet the required six-month stay abroad. The Tribunal upheld that the appellants' actions constituted an attempt to smuggle gold, making it "prohibited goods" under Section 2(33) of the Customs Act, 1962, and thus liable for confiscation.

2. Validity of the customs duty demand based on past import statements:
The customs duty demand on past imports was based on the appellants' statements recorded under Section 108 of the Customs Act, 1962. The Tribunal found these statements credible and corroborated by the modus operandi of the appellants, as evidenced by their previous visits and similar activities. The Tribunal cited Supreme Court rulings, asserting that such statements are substantive evidence and upheld the duty demand for the extended period.

3. Justification for the redemption and re-export permissions granted by the adjudicating authority:
The adjudicating authority had allowed redemption of the seized gold on payment of fine and permitted re-export for two appellants. However, the Tribunal modified this order, emphasizing that the appellants were caught attempting to smuggle gold, which is a prohibited activity. Citing precedents, the Tribunal ruled that the gold should be subject to absolute confiscation without any option for redemption or re-export.

Conclusion:
The Tribunal rejected the appeals filed by the appellants, upheld the customs duty demand based on their past smuggling activities, and allowed the Department's appeal for absolute confiscation of the gold.