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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 ..... Hon ble Rajasthan High Court has analyzed the various provisions of the Customs Act. The appellant should have been given an option to redeem the goods against the redemption fine. Accordingly, the absolute confiscation made as per the impugned order will have to be modified to the extent of allowing the goods to be redeemed on payment of redemption fine of Rs.5 lakhs (Rupees Five Lakhs Only). In case appellant redeems the goods he is also required to pay Customs duties as applicable as per Section 125 (2) of the Customs Act. Since the case under consideration is a case where the goods sought to be imported as baggage, the applicable rate of duty will be the baggage rate of duty, which is much higher than the normal rate of duty applicable to the same goods. Penalty u/s 114AA of CA - HELD THAT:- 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 brou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 into show cause as to why- (i) The aforesaid 15 Gold bars weighing 1749.60 grams valued at Rs. 48,37,644/-.should not be confiscated under Section 111(i), (I) and (m), of the Customs Act, 1962; (ii) The aforesaid packing materials along with one pair of Shoes and socks should not be confiscated under Section 119 of the Customs Act, 1962 for being used in illegal smuggling of gold bars; (iii) Penalty should not be imposed upon the party under Section 112 of the Act ibid for hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14AA 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 that the Noticee is a frequent traveller and does not fulfill the eligibility criteria for import of gold as envisaged in the Notification No.12/2012-Cus dt.17.03.2012 as amended of which the Explanation given under Condition No. 35 reads: For the purposes of this notification, eligible passenger means a passenger of Indian origin or a passenger holding a valid passport, issued under the Passports Act, 1967 (15 of 1967), who is coming to India after a period of not less than six months of stay abroad; and short visits, if any, made by the eligible passenger during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 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. In the case of Samynathan Murugesan vs Commissioner, Hon'ble Supreme Court on 11-01-2010 dismissed the Petition for Special Leave to Appeal (Civil) No. 22072 of 2009 filed by Samynathan Murugesan against the Madras High Court Judgment and Order dated 27-4-2009 in C.M.A. No. 2040 of 2007. It was upheld that 7.075 kg. gold ornament concealed in T.V. sets as part of his baggage were prohibited as the assessee di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 recorded statement from the appellant under Section 108 of the Act. In the statement, the appellant had admitted that he is only carrier of the gold. It was pleaded before Hon'ble High Court that Section 125 does not provide for confiscation of goods other than prohibited goods, and according to him, importers' conduct has no significance for considering whether the option exercised by importers to release the goods on payment of redemption fine and duty should be allowed or not. It was also contended that gold is not a prohibited goods which can be released on payment of redemption fine and duty. On the contrary, Ld. Standing Counsel appearin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 willingly involved in the unscrupulous act of smuggling, Noticee Waqar is liable to penal action under section 112(b) of the Customs Act, 1962. 4.3 The reliance placed by the Commissioner on a Circular of 1993 is totally miss-placed as the gold is now not subject to any restriction for importation except that duty is required to be paid. Further it is also worth noting that said circular is categorically directing that no option for redemption should be given, whereby the circular seem to direct the adjudicating authority to decide the matter in manner which is contrary to the provisions as they are in the Act or Rules. Hon ble Allahabad High Court has in case of Vijay Singh Other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bserving 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 :- They (respondents) relied upon the order passed by the State. This order also deserves to be quashed as it is not consistent with the statutory rules. It appears to have been passed by the Government to obliqe the respondents and similarly situated ad hoc appointees. 11. Thus, in view of the above, it is evident that executive instructions cannot be issued in contravention of the Rules framed under the proviso to Article 309 of the Constitutio n and statutory rules cannot be set at naught by the executive fiat. 4.4 Further, reliance placed in the case of Shri Om Prakash Bhatia and other judgments, also do not support the case of revenue, because in the case of prohibited goods, the goods should have been he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ported 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 restrictions. Merely because Section 3 of the Imports and Exports (Control) Act, 1947, uses three different expressions prohibiting , restricting or otherwise controlling , we cannot cut down the amplitude of the word any prohibition in Section 111(d) of the Act. Any prohibition means every prohibition. In other words all types of prohibitions. Restrictions is one type of prohibition. From item (I) of Schedule I, Part IV to Import Control Order, 1955, it is clear that import of living animals of all sorts is prohibited. But certain exceptions are provided for. But nonetheless the prohibition continues. 20. In Toolsidass Jewraj v. Additional Collector of Customs Others [(1991) 2 SCC 443], full export value of the goods was not correctly stated in the shippin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .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 case of any goods, the importation or exportation whereof is prohibited under this Act or under any other law for the time being in force, and shall, in the case of any other goods, give to the owner of the goods 4 [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: [Provided that where the proceedings are deemed to be concluded under the proviso to sub-section (2) of section 28 or under clause (i) of sub-section (6) of that section in respect of the goods which are not prohibited or restricted (no such fine shall be imposed) PROVIDED FURTHER that without prejudice to the provisions of the proviso to sub-section (2) of section 115, such fine shall not exceed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 covers a case where importation or exportation of the goods is not prohibited. In such a case there is a mandate to offer redemption fine in lieu of confiscation as the officer thinks fit. In the present case all three authorities have provided for absolute confiscation of the goods without any facility of payment of redemption fine. This in our view was not correct. This is exactly what the Andhra Pradesh High Court has held in case of Shaik Jamal Basha Vs. Government of India reported in 1997 (91) ELT 277 (AP). The Division Bench of the High Court in the context of Section 125 of the Customs Act had held as under:- 3. But, all the same, we find the petitioner is entitled to a different relief. The order of confiscation is made under Section 111 of the Customs Act, 1962 on account of concealment. Section 125 requires that whenev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Court had confirmed the view of the customs authority of offering redemption fine in lieu of confiscation. 18. In the result petitions is disposed of with following directions:- (i) The fine of Rs.40 lacs under Section 112 of the Customs Act imposed by revisional authority is reduced to Rs.30 lacs. (ii) The issue of fixing the redemption fine in lieu of confiscation requires to be decided. To avoid further delay let this issue be decided by the revisional authority. The proceedings are placed back before the said authority for the limited purpose of deciding the redemption fine that the petitioner may pay if he wishes to avoid absolute confiscation of the seized gold. Fresh order shall be passed preferably within four months from today. 19. All pending applications also stand disposed of. Our attention was drawn to the judgment of the Madras High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 in the present case penalty under the said section is not justified. Bangalore bench has in case of Ismail Ibrahim [2019 (370) E.L.T. 1321 (Tri. - Bang.)] held as follows: 6.3 . Further penalty under Section 114AA of the Customs Act is concerned, I find that the penalty under Section 114AA can only be imposed if the person knowingly or 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. Further I find that in the present case, the appellants have not made intentionally any false sign or declaration, incorrect statements or declarations to attract penalty under Section 114AA of the Act. Therefore I set aside the penalty imposed under Section 114AA of the Customs Act, 1962 on both the appellants. 4.8 In the case of Jitender Singh [2019 (369) ELT 1683 (G.O.I.) follo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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