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TMI Blog2011 (3) TMI 1565X X X X Extracts X X X X X X X X Extracts X X X X ..... exchange earnings and that the gold so imported was diverted to domestic tariff area in violation of the relevant legal provisions and foreign exchange earnings were shown by export of overvalued metal scrap declaring it as gold jewellery. Also a case was made out that the seized jewellery was made from gold bars imported by units in SEZ. So the goods were seized under the reasonable belief that the impugned goods were smuggled. 4. Gold and manufactures thereof are goods specified under Section 123 of the Customs Act under which the person from whose custody the goods are seized has an onus to prove that the goods were imported complying with the import policy in force and after payment of appropriate customs duty. The Appellants were not able to discharge this burden on them to the satisfaction of the investigating officers. 5. There was also seizure of Indian Currency from these premises under the reasonable belief that such money was the sale proceeds of smuggled gold. 6. So the Appellants were issued with a Show Cause Notice asking them why the seized gold and gold jewellery allegedly smuggled in contravention of Para 4A.21 of the Foreign Trade Policy 2004-09, Para 4A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elhi are confiscated under Section 111(j) and 111(o) of the Customs Act, 1962 read with the provisions of the Foreign Trade Policy, 2004-09 and the Special Economic Zone Rules, 2006. (ii) These goods can be redeemed on payment of a redemption fine of ₹ 3,01,18,297/- plus ₹ 1,42,64,402/- and payment of the customs duty and cess amounting to ₹ 35,39,785/- leviable on the goods. (iii) Indian currency amounting to ₹ 36,00,000/- recovered from the business premises of M/s. Omkar Jewellers at New Delhi are confiscated absolutely under Section 121 of the Customs Act, 1962. (iv) Interest is also charged on the above duty until payment under the provisions of Section 28AB of the Act ibid. (v) The amounts already paid by them i.e. ₹ 66,27,699/- are appropriated towards the above demands. (vi) The assorted gold jewellery weighing 1912.500 gms valued at ₹ 19,08,000/- and gold bars and coins weighing 5207 grams valued at ₹ 73,50,000/- which were seized from the premises of M/s. Orbit Gold, Mumbai are hereby confiscated under Section 111(j) and 11(o) of the Customs Act, 1962 read with the provisions of the Foreign Trade Policy, 2004-0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate relief at the hands of this Tribunal. 11. After the mention of the matter before the Tribunal about the urgency of the matter the case was posted for hearing of stay application on 25-2-2011 and the parties were heard through their advocate. 12. The arguments of the Appellants for the purpose of stay are two fold. Firstly they argue that they do not accept any of the allegations stated in the SCN regarding illicit import of gold but they opted to pay duty, interest and penalty as envisaged under Section 28(1A) of the Customs Act only to achieve quietus to the entire controversy and not to enter into litigation which is bound to be cumbersome, time consuming and expensive. They rely on the first proviso to Section 28(1A) which is reproduced below : (1A) When any duty has not been levied or has been short-levied or the interest has not been charged or has been part paid or the duty or interest has been erroneously refunded by reason of collusion or any wilful mis-statement or suppression of facts by the importer or the exporter or the agent or employee of the importer or exporter, to whom a notice is served under the proviso to sub-section (1) by the proper officer, ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eement with the ld. DR that the provisions of Section 28(1A) can relate only to matters of short payment of duty. This is because Section 28(1A) is applicable to a person to whom a Notice is issued under Section 28 of the Customs Act. A SCN invoking Section 28 for demanding duty and also invoking other sections to deal with offences relating to Import Trade Control or other prohibitions, cannot be considered as a notice issued under Section 28 in so far as the notice relates to other matters. This interpretation is a matter of simple logic. This interpretation is necessary for achieving harmonious construction of the provisions to avoid absurd results. For example a person importing a prohibited item with a false value cannot be allowed to close the matter by paying duty on account of his mis-declaration of the value of goods. He has to still answer for the fact that goods are prohibited for import. Otherwise Section 28(1A) can become an instrument to overcome all import restrictions. 17. However we are in agreement with the argument of the Ld. Advocate that the fine and penalties imposed in the impugned order are far too excessive. It appears that even after 20 years since libe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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