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TMI Blog2023 (9) TMI 1263X X X X Extracts X X X X X X X X Extracts X X X X ..... (Rs. Five Lakhs Only) upon Noticee Waqar S/o Shri Mohammad Yusuf R/o. 1247, Ganj Mir Khan, Rakabganj, Near Delite Cinema, Delhi-110002 under Section 112(b) of the Customs Act, 1962; 69.5 I impose penalty of Rs.4,00,000/- (Rs. Four Lakhs Only) upon Noticee Waqar S/o Shri Mohammad Yusuf R/o. 1247, Ganj Mir Khan, Rakabganj, Near Delite Cinema, Delhi-110002 under Section 114AA of the Customs Act, 1962." 2.1 Appellant was intercepted by the AIU Officers posted at Airport, Lucknow. On a search of the appellant, it was found that he had concealed 15 gold bars in his shoes and socks which were recovered in the presence of independent Panchas. As per the government approved valuer Shri Rajesh Kumar Gupta, these bars were made of gold weighing 1749.60 grams and values at Rs.48,37,644/-. The gold bars were seized under the responsible belief that these are liable for confiscation under Section 111 (i), (l) & (m) of Customs Act for contravening various provisions of Customs Act, 1962 read with Baggage Rules, 1998. The shoes, shocks and other packing materials used for concealing were also seized. Accordingly, a show cause notice dated 02.11.2015 was issued to the appellant, asking them in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mohd. Ashraf Armar [2019 (369) E.L.T. 1654 (Tri. - Mumbai)]. * Commissioner of Customs (Preventive) Jodhpur filed the civil writ petition bearing no. 5640/2019 before the Hon'ble Rajasthan High Court. * Prakash Chandra Shantilal [2013 (290) E.L.T. 125 (TRI. - AHMD.)]. * Access World Wide Cargo [2022 (379) E.L.T. 120 (Tri. - Bang.)]. * Jitender Singh 2019 (369) ELT 1683 (G.O.I.). * In view of the above, he submits that goods may be allowed to be redeemed on payment of redemption fine. * He prays that the penalty imposed under Section 114AA cannot be justified, as he has not filed any document nor asked to file any document with intention to evade payment of duty. * Accordingly, his appeal be allowed to the above extant. 3.3 Arguing for the revenue the Authorized Representative reiterates the findings of the Original Authority. 4.1 I have considered the impugned order along with the submissions made in the appeal and during the course of argument. 4.2 For absolute confiscation of the said goods i.e. gold Commissioner has observed as follows:- "61. The impugned gold bars do not fall under the category of jewellery. It is evident from entries in his Passport ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port of which is subject to any prohibition under this Act or any other law for the time being in force but does not include any such goods in respect of which the conditions subject to which the goods are permitted to be imported or exported have been complied with." 9. From the aforesaid definition, it can be stated that (a) if there is any prohibition of import or export of goods under the Act or any other law for the time being in force, it would be considered to be prohibited goods; and (b) this would not include any such goods in respect of which the conditions, subject to which the goods are imported or exported, have been complied with. This would mean that if the conditions prescribed for import or export of goods are not complied with, it would be considered to be prohibited goods. This would also be clear from Section 11 which empowers the Central Government to prohibit either absolutely or 'subject to such conditions' to be fulfilled before or after clearance, as may be specified in the notification, the import or export of the goods of any specified description. The notification can be issued for the purposes specified in sub-section (2). Hence, prohibition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 155) E.L.T. 423 (S.C.) came to the conclusion that the prohibition in terms of Section 2(33) of the Customs Act, 1962 was attracted in a case of this nature. Therefore, absolute confiscation was justified. This order of the Division Bench was taken up on appeal to the Supreme Court in Special Leave to Appeal (Civil) No. 22072 of 2009 [2010 (254) E.L.T. A15 (S.C.) and the Special leave Appeal was dismissed holding as follows :- ''Applying the ratio of the judgment in the case of Om Prakash Bhatia v. Commissioner of Customs, Delhi reported in 2003 (6) S.C.C. 161, to the facts of the case, we find that, in the present case, the assessee did not fulfil the basic eligibility criteria, which makes the imported item a prohibited goods; hence, we see no reason to interfere with the impugned order. The special leave petition is, accordingly dismissed." * In the case of Abdul Razak vs UOI [2012 (275) ELT 0300 (Ker.)]. Hon'ble High Court, Kerala was deliberating on the issue of absolute confiscation in a case where the appellant tried to smuggle gold by concealing it in emergency light, mixie, grinder, car horns etc. The Customs authorities seized the smuggled goods i.e. gold and re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsp;means any act or omission which will render such goods liable to confiscation under section 111 or section 113." In this case, the burden was on the Noticee, who has utterly failed to discharge it. It is pertinent to mention here that there is specific purpose behind providing a very small list of items under Section 123 & gold figures with specific mention under section 123(2) of the Act where the burden of proof is on the importer. This indicates that the Government recognizes that the smuggling of gold is widespread and wants to discourage the smuggling of gold into India. 64. In light of the above legal scenario and judicial interpretations, the smuggled gold is ordered to be confiscated with no option to redeem the same on payment of redemption fine. 65. As the impugned 15 Nos. of gold bars brought by the Noticee Waqar totally weighing 1749.60 grams valued at Rs.48,37,644/- have been found smuggled into India concealing them in shoes and socks put on by him rendering these impugned 15 Nos. of gold bars totally weighing 1749.60 grams valued at Rs.48,37,644/- liable to confiscation under Section 111 (i), (I) & (m) of the Customs Act, 1962 and Noticee Waqar is found wil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble Apex Court observed that if there is a conflict between the executive instruction and the Rules framed under the proviso to Article 309 of the Constitution, the Rules will prevail. Similarly, if there is a conflict in the Rules made under the proviso to Article 309 of the Constitution and the law, the law will prevail. 9. Similar view has been reiterated in Union of India v. Rakesh Kumar, AIR 2001 SC 1877; Swapan Kumar Pal and Ors. v. Samitabhar Chakraborty and Ors., AIR 2001 SC 2353; Khet Singh v. Union of India, (2002) 4 SCC 380; Laxminarayan R. Bhattad and Ors. v. State of Maharashtra and Anr., (2003) 5 SCC 413; and Delhi Development Authority v. Joginder S. Monga, (2004) 2 SCC 297, observing that statutory rules create enforceable rights which cannot be taken away by issuing executive instructions. 10. In Ram Ganesh Tripathi v. State of U.P., AIR 1997 SC 1446, the Hon'ble Supreme Court considered a similar controversy and held that any executive instruction/order which runs counter to or is inconsistent with the statutory rules cannot be enforced, rather deserves to be quashed as having no force of law. The Hon'ble Supreme Court observed as under :- "T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specified in sub-section (2). Hence, prohibition of importation or exportation could be subject to certain prescribed conditions to be fulfilled before or after clearance of goods. If conditions are not fulfilled, it may amount to prohibited goods. This is also made clear by this Court in Shekih Mohd. Omer v. Collector of Customs, Calcutta and Others [(1970) 2 SCC 728] wherein it was contended that the expression 'prohibition' used in Section 111(d) must be considered as a total prohibition and that the expression does not bring within its fold the restrictions imposed by clause (3) of the Import Control Order, 1955. The Court negatived the said contention and held thus :- '...What clause (d) of Section 111 says is that any goods which are imported or attempted to be imported contrary to "any prohibition imposed by any law for the time being in force in this country" is liable to be confiscated. "Any prohibition" referred to in that section applies to every type of "prohibition". That prohibition may be complete or partial. Any restriction on import or export is to an extent a prohibition. The expression "any prohibition" in Section 111(d) of the Customs Act, 1962 includes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.5 The sections under which the gold has been held liable for confiscation are the sections in which the goods become prohibited for the reason of misdeclaration or any other violation of the provisions of Custom Act,1962. Thus adjudicating authority has held that the gold does not fall under the category of prohibited goods for the reasons of prohibition imposed under Custom Act or any other law, but the confiscation is for the case of non-declaration or miss-declaration of the same to the Customs Authorities by the passenger in an appropriate manner. In my view, in such cases the gold could have been allowed to be redeemed by the appellant on payment of redemption fine. In the case of Commissioner of Customs (Preventive), Jodhpur Vs Shri Mehboob in D.B. Civil Writ Petition No.5640/2019 order dated 22.02.2022 Hon'ble Rajasthan High Court has analyzed the various provisions of the Customs Act and held as follows:- "Section 125 of the Act pertains to option to pay fine in lieu of confiscation and reads as under:- "125. Option to pay fine in lieu of confiscation.- (1) Whenever confiscation of any goods is authorised by this Act, the officer adjudging it may, in the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tempted to smuggle gold by concealing it in his handbag and not declaring the same upon arrival at the international airport. The authorities had provided absolute confiscation of gold and also imposed penalties. In the context of interpretation of Section 125 of the Customs Act, this Court held as under:- "15.The second area of concern is applicability of Section 125 of the Act. Sub-section (1) of Section 125 provides that whenever confiscation of any goods is authorised by the Act the officer adjudging it may in the case of any goods, the importation or exportation whereof is prohibited under the Act or under any other law for the time being in force and shall in case of any other goods give to the owner of the goods or where such owner is not known the person from whose possession or custody such goods have been seized, an option to pay in lieu of confiscation such fine as the said officer thinks fit. This provision thus comes in two parts. The first part covers the cases where importation or exportation of the goods is prohibited under the Act. In such a case discretion is given to the competent authority to offer redemption fine in lieu of confiscation. The second part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 125 on the other hand pertains to option to pay fine in lieu of confiscation. As noted sub-section (1) of Section 125 comes in two parts. Whenever confiscation of goods is authorized under the Act, as per sub-section (1) of Section 125 the adjudicating officer has a discretion to offer redemption fine in lieu of confiscation in case of goods importation or exportation whereof is prohibited. In all other cases there is a statutory mandate on the adjudicating officer to offer such redemption fine. If the interpretation of Section 112 and 125(1) is not reconciled as above, this latter portion of sub-section (1) of Section 125 which covers all cases except where the importation or exportation of the goods is prohibited, would become otiose. 17. Learned counsel for the respondents however heavily relied on the decision of Supreme Court in case of Om Prakash Bhatia Vs. Commissioner of Customs, Delhi reported in AIR 2003 SC 3581. Our attention was drawn to paragraph 9 and 10 of the judgment. However in our view this decision does not hold anything contrary to what we have observed in connection with Section 125 of the Customs Act. In fact it was a case in which the Supreme Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r uses, or causes to be made, signed or used, any declaration, statement or document which is false or incorrect in any material particular, in the transaction of any business for the purposes of this Act, shall be liable to a penalty not exceeding five times the value of goods." From the plain reading of Section 114AA it is evident that penalty under this section can be imposed on a person who intentionally makes, signs or uses, or causes to be made, signed or used, any declaration, statement or document which is false or incorrect in any material particular for the transaction of any business under the Customs Act, 1962. In the present case nothing has been brought on record by which it can be said that the appellant had made or caused to be made any declaration/ used or caused to be used any statement or document which is false or incorrect. In the present case the appellant carrying the Gold has in fact not made any declaration to the Custom Authorities as required under the Custom Act, 1962. No document etc., which has been produced by him which has been produced by him was found to be materially wrong. As the ingredients for invocation provisions of Section 114AA are absent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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