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TMI Blog2010 (10) TMI 650X X X X Extracts X X X X X X X X Extracts X X X X ..... sustainable in so far as confiscation of gold is concerned, however, the gold is liable to be redeemed on payment of fine and penalty, however, since the gold has been sold by the Department while the appellant was pursuing the appellate remedies available to him, he would be entitled for return of the sale proceeds - Appeal is disposed of - C/518/1996-Mum - A/362/2010-WZB/C-II/(CSTB) - Dated:- 28-10-2010 - S/Shri P.G. Chacko, S.K. Gaule, JJ REPRESENTED BY : Shri Yakub Ibrahim Yusuf, for himself. Shri Manish Mohan, SDR, for the Respondent. [Order per : S.K. Gaule, Member (T)]. - Heard both sides. This appeal is being taken up pursuant to Hon ble Mumbai High Court s Order dated 27-1-10 in Writ Petition No. 1443 of 2002 and Writ Petition No. 1802 of 2002. 2. This case has a chequered history. Shri Yakub Ibrahim Yusuf (Yusuf) the appellant was intercepted at N.I.P.T., Module-II, Mumbai on his arrival from London to Mumbai by AI-132 while he was carrying 25 kgs of gold. The 25 kgs. of gold was found in two black colours boxes in the brief case alongwith foreign currency of market value of Indian Rs. 6,54,830/-. The appellant stated before the DRI officers that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the appellant was reduced to Rs. 5.00 lakhs and confiscation of foreign currency from the appellant was set aside and allowed to be re-exported in accordance with law. Aggrieved by this, the Department filed Reference Application No. 17 of 2001 before the Hon ble High Court raising certain important question of law. The Tribunal vide its Order No. C-I/1746/01-WZB dated 13-7-2001 in an application filed by the appellant directed the Department to implement its earlier Order dated 9-11-2000. In subsequent order No. C-I/1995/WZB/2001 dated 1-8-2001, the Tribunal directed the department to release the sale proceeds of the confiscated gold after deducting a sum of Rs. 10.00 lakhs. On not being successful, the appellant moved the Hon ble High Court and the Hon ble High Court in WP No. 2371 of 2001 vide its Order dated 9-10-2001 directed the Department to implement the order of the Tribunal within four weeks unless stay was obtained from the Tribunal. The Department accordingly preferred a stay application before the Tribunal staying its Order dated 9-11-2000 [2001 (127) E.L.T. 543 (Tri. - Mum.)], 13-7-2000, 1-8-2001 21-1-2002 [2002 (147) E.L.T. 567 (Tri. - Mumbai)] pending reference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an v. Union of India [2009 (235) E.L.T. 402 (Bom.)] 4. The ld. SDR reiterated the findings of the adjudicating authority. The contention of the Department is that the absolute confiscation of the gold is sustainable since the gold is a prohibited item. The contention is that the appellant has never claimed to be the owner of the gold, therefore, the gold cannot be redeemed to him. The contention is that on redemption the duty has to be paid. The Department also placed reliance on the following case law :- (1) Om Prakash Bhatia v. CC, Delhi [2003 (155) E.L.T. 423 (S.C.)] (2) CC(Exports) Chennai v. Bansal Industries [2006 (09) LCX 0013 = 2007 (207) E.L.T. 346 (Mad.)] (3) Union of India v. Mohammed Aijal Ahmed [2009 (07) LCX 0144 = 2009 (244) E.L.T. 49 (Bom.)] (4) CESTAT Order No. 1980-1995/09, Chennai [2010 (252) E.L.T. 212 (Tri.-Chennai)] 5.1 We have perused the records and considered the submissions from both sides. The ld. Commissioner vide his Order dated 6-5-1996 confiscated 25 kgs. of gold under Section 111(d) of the Customs Act, 1962 read with Section 3 of the Foreign Trade (Development Regulation) Act, 1962 and ordered for confiscation of brief c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficult to accept. The gold, as we have noted, was purchased by Yakub Yusuf at Zurich. This was what is claimed and there is no rebuttal of this by any of the others. The version earlier put forward is difficult to accept in view of this fact, in the absence of any explanation as to why Yakub Yusuf should choose to come back to London and to travel through the airport, before proceeding to Mumbai. It would then follow thatw the gold was purchased by Yakub Yusuf on his own initiative - otherwise the theory of a chance meeting at London airport cannot be supported, since none of the other five had the gold with them. 4. There is thus insufficient documentary evidence existing at the time of the incidence to show that the gold was purchased by Yakub Yusuf for and on behalf of the other five. 5. Let us now consider what transpired at Mumbai airport. The claim put forward by the appellant is that in view of the heavy weight of the gold and other factors such as inexperience. Yakub Yusuf carried the gold on behalf of the other five and would have declared it, if given sufficient opportunity. He was not given this opportunity. As soon as he completed the formalities at the immigration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is also total lack of explanation as to why I.N. Patel, a grown up man who was in the group could not make the declaration. It is claimed that he was working in the United Kingdom. He surely had enough experience of worldwide affairs to make a declaration. Yet he does not do so. Each of them gives a statement that the gold did not belong to them. No doubt, subsequently, these statements have been retracted. 8. This failure by them to make a declaration before the baggage officers assumes greater significance in the light of the submissions made on behalf of Yakub Yusuf. If as is claimed he was intercepted without being given sufficient opportunity is natural to expect that the others would have protested vehemently after all what was happening with gold belonging to each of them. They are in effect being the ownership of the gold valued at Rs. 1.00 Crore approx.. Yet they meekly accepting the position. 9. Much was sought to be made of the fact that the statements which these five passengers give disowning the gold shortly after they came to India was retracted later and they put forward their claim to gold. The result of such a retraction would be that the admission made in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interim order can not be said to be a finding of fact on final determination of issues. No can such a finding in any case bind us. 12. The net result would be that the gold was upheld to have been belonged to Yakub Yusuf and have been imported by them. Yakub Yusuf was not entitled to clearance under the notification, since when he brought the gold, the benefit of notification was not available to him, since he has already availed of it. This is admitted by his advocate. The gold has therefore rightly been ordered confiscation. 5.4 The appellant also did not challenge so far as the confiscation of gold is concerned, what they have challenged in the WP 1443/2002 is the refund order-cum-demand notice dated 6-3-2002. Now, again the appellant has made a feeble attempt regarding the retraction of the statement and the affidavits filed by the said persons. The above contentions have also been considered, at length, by the Tribunal in the findings reproduced (supra). That the above contentions are not sustainable, is also fortified by the fact that the five persons have not challenged the Tribunal s impugned Order. From the above, it emanates that the gold is liable for confiscation, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , import of gold is permitted in case of certain category of persons, subject to certain conditions in terms of Notification No. 117/92-Cus., as amended, therefore, it would not fall under the prohibited category as envisaged under the said provisions. The above view is also supported by Hon ble High Court of Calcutta s decision in the case of Commr. of Customs (Preventive), West Bengal v. India Sales International reported in 2009 (241) E.L.T. 182 (Cal.). Hon ble High Court while deciding whether prohibited has to be read as prohibited absolutely , held that the Court cannot insert any word in the statute since it is in the domain of the legislators. The Hon ble High Court has also held that option given under Section 125 of the said Act in respect of prohibited goods and right given to authorities for redemption of the confiscated goods cannot be taken away by Court by inserting a particular word therein. The Hon ble High Court further held that power has been given by legislators to a particular authority to act in a particular manner and the said authority must act accordingly and not otherwise at all. Therefore, the redemption of confiscated gold, on an option to pay fine i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m payment of redemption fine and penalty. As regards payment of duty, the Hon ble High Court has held that the duty would be payable only if the gold was actually allowed to be redeemed and what is given to the petitioner is the sale proceeds. Therefore, the question of paying duty in respect of sale proceeds would not arise. The ratio of the above decision is fully applicable to the facts of the case. In the result, we direct the department to return the entire sale proceeds after deducting therefrom, the fine and penalty. We make it amply clear that duty is not deductible from the sale proceeds as already discussed (supra). The ld. Commissioner has confiscated the gold absolutely; accordingly, the issue relating to quantification of the redemption fine was not before him. Therefore, the quantification of the redemption fine is required to be done in terms of the proviso to sub-section (1) of Section 125 of CA, 1962. 5.8 As regards confiscation of the foreign currency from the appellant, he had declared it; therefore, there is no ground for confiscation. Accordingly, the same is set aside. 5.9 The Commissioner has imposed penalty of Rs. 50.00 lakhs against the appellant. The T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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