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TMI Blog2023 (3) TMI 900X X X X Extracts X X X X X X X X Extracts X X X X ..... ted illegally therefore the definition of prohibited goods as per sec.2(33) gets attracted and the gold bars becomes prohibited goods for which no compounding application is maintainable. According to me, learned Chief Commissioner has misdirected himself by looking into the definition of prohibited goods as prescribed u/s. 2(33) of Customs Act, 1962 because Section 137(3)(ii) ibid only talks about prohibit items and specifically mentioned that it has no application if the goods involved are prohibited items for import and export in the ITC (HS) Classification of Export and Import Items of the Foreign Trade Policy - The definition of prohibited goods prescribed u/s. 2(33) by any stretch cannot be applied into the provision of Section 137 (3)(c)(ii) ibid. The learned Chief Commissioner failed to appreciate that Section 2 ibid itself begins with the words unless context otherwise requires . The Hon ble Supreme Court in the matter of Commr. of Customs vs. Atul Automations Pvt. Ltd.[ 2019 (1) TMI 1324 - SUPREME COURT ] rejected the submission raised by revenue that Multi-Function Devices although were a restricted and not prohibited item but absence of necessary authorizati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on was orchestrated by the appellant and one Rajuram Purohit. 4. When the case was still under investigation, before the issuance of show cause notice, on 22.01.2018 the appellant filed the application u/s.137(3) ibid for compounding of offences punishable u/s.135 ibid. The department opposes the compounding of offence application on the ground that the same is pre-mature as show cause notice has not been issued by that date and therefore not maintainable. According to the department Rule 4 of Customs (Compounding of Offences) Rules, 2005 states that application shall not be allowed unless the duty, penalty and interest liable to be paid have been paid for which application has been made and since the duty, penalty and interest has not been paid the application is liable to be rejected. It is also the case of the department that since the gold bars herein were imported by mis-declaration and concealment in violation of various provisions of Customs Act, The Foreign Trade (Development Regulation) Act, 1992, Foreign Trade (Regulation) Rules, 1993 and also in violation of RBI guidelines therefore the same falls under the definition of prohibited goods as per section 2(33) ibi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B. Patel vs. Commr. of Customs; 2015(9) TMI 1197- CESTAT; in which in the context of Section 125 of the Customs Act, it has been held that u/s. 125 ibid unless the importation or exportation of goods is expressly prohibited , the adjudicating authority is obliged to offer to the owner of the goods an option to pay fine in lieu of confiscation. Per contra learned Authorised Representative appearing on behalf of Revenue supported the findings recorded in the impugned order and submits that any goods, imported in violation of the conditions imposed for their import, attract the mis-chief of the definition of prohibited goods as mentioned in Section 2(33) ibid and has to be treated as such. In support of his submission learned Authorised Representation placed reliance on the decision of the Hon ble Supreme Court in the matter of Om Prakash Bhatia vs. Commr. of Customs, Delhi; 2003(153) ELT 423 (SC). 7. I have heard learned counsel for the appellant and learned Authorised Representative for the Revenue and perused the case records including the written submissions/synopsis and case laws cited by the respective sides. In order to appreciate the issue involved herein I consider it p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only due to the reasons mentioned under proviso to Section 137 ibid and for no other reason whatsoever. But the learned Chief Commissioner failed to appreciate that the expression used in the proviso to Section 137(3) is prohibited items whereas for rejecting the application he relied upon the definition of prohibited Goods as prescribed u/s. 2(33) ibid. 9. Gold is freely importable and therefore can such a good will become prohibited merely because it was imported illegally without prior permission? In my view the answer is in negative. The learned Chief Commissioner has rejected the application merely on the ground that since the gold bars have been imported illegally therefore the definition of prohibited goods as per sec.2(33) gets attracted and the gold bars becomes prohibited goods for which no compounding application is maintainable. According to me, learned Chief Commissioner has misdirected himself by looking into the definition of prohibited goods as prescribed u/s. 2(33) of Customs Act, 1962 because Section 137(3)(ii) ibid only talks about prohibit items and specifically mentioned that it has no application if the goods involved are prohibited items for import and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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