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TMI Blog1993 (8) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... esulted in recovery of 21 pieces of gold (24 carat purity) collectively weighing 2448.600 gms. and valued at Rs. 10,03,926/- (MV) which was kept in a coffee colour pouch kept in the polythene bag. 3. Shri Kamlesh Kumar in his immediate statement recorded under Section 108 of the Customs Act, 1962 while admitting the said recovery from his baggage also stated that the said bag was given to him by Shri Khan who had requested him to take it out of the baggage hall as he (Shri Kamlesh Kumar) was not having any dutiable goods and the said bag was to be delivered to Shri Khan outside the Airport. Likewise, Shri Khan in his statement also admitted the facts. 4. The original authority taking a view that import of gold being prohibited inter alia because of condition of payment of duty in foreign currency not complied with, ordered absolute confiscation of the goods. A penalty of Rs. 1,00,000/- Rs. 25,000/- was also imposed on Shri Khan and Shri Kamlesh Kumar respectively. Being aggrieved both the passengers filed appeals before the Collector of Customs (Appeals), New Delhi. Shri Khan while pleading for release of impugned goods averred that the bag containing gold belonged to him a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and truthful declaration to the Customs Authority and failure to make such a truthful declaration, precludes the passenger from availing the concessions as provided under the said Notification 117/92 notwithstanding the fact that all the other conditions are satisfied; therefore, by non-declaration since the conditions of the Notification ibid was not satisfied, the gold continued to be within the purview of prohibited goods as defined in Section 2(33) of the Act ibid. Another plea of the Applicant Collector was that the redemption fine and penalty on both the passengers was inadequate and insufficient and not commensurate to the gravity of the offence. 8. While no formal reply to the Show Cause Notices of even number was received from any of the passengers, they through their advocates Shri S.P. Bhatnagar (for Shri Razaulla Khan) and Shri S.S. Arora (for Shri Kamlesh Kumar) were heard on 4-8-1993. 9. Shri S.R Bhatnagar, Advocate, stated that the import of gold in baggage is allowed subject to the four conditions mentioned in the relevant ITC and Customs Notifications; no sooner these conditions are satisfied gold falls outside prohibition. He further stated that inasmuch as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... offence. The advocate specially quoted the case of one Mrs. Saranga (order-in-original No. 87/92 dated 18-6-1992) where the passenger (accompanied by two others) had sought to clear clandestinely 42 bars of gold weighing about 5 kgs. which were released by the original authority on payment of a fine of Rs. 50,000/- only and a penalty of Rs. 10,000/- besides normal release of 84 bars that were duly declared (It was clarified to them that on Departmental appeal redemption fine and personal penalty was raised to Rs. 75,000/- and Rs. 40,000/-); that it was a case worse than non-declaration since the party was drawing a red herring by declaring only part of gold. 13. Shri Bhatnagar accordingly pleaded that based on the decision of the Mrs. Saranga's case personal penalty and redemption fine in his case should be reduced likewise. Shri Arora stated that his client Shri Kamlesh Kumar having acted without any mala fide should not have been inflicted any penalty at all. It was also pleaded that reference to market value of gold, as done by the applicant Collector, to seek high fine apparently flowed from consideration for rewards to staff and that redemption fine should be related to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitting import of gold. Wherever, it was intended to make a true declaration as condition precedent for permitting of anything prohibited, the same has been specifically provided, for instance, RBI Notification FERA-9 and 10/74 dated 1st January, 1974, the first proviso of which lays down that the permission to bring in foreign exchange is available only if the concerned person makes, on arrival in India, a declaration to the Customs Authorities. No such stipulation for declaration at the time of bringing in gold has been envisaged in the relevant notification relating to import of gold. b. A true declaration, under the Customs Act, is universally applicable in respect of all imports. Therefore, if a contrary view is taken and held that mis-declaration or non-declaration will make the goods prohibited, then every type of goods will become prohibited in all cases of mis-declaration/non-declaration. In that event the mandatory right under Section 125 of the Customs Act, 1962, of the importer to get redemption in the case of any other (other than prohibited goods) will become redundant. c. Section 111 of the Customs Act, laying down various situations where goods become liable t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licant Collector's letter). Market value of the goods, minus the duty leviable is the maximum fine that can be imposed under proviso to Section 125. The quantum of fine will vary from case to case and the relevant factor to determine the same are the margin of profit, amount of duty sought to be evaded etc. In this case, since the applicant was in any case entitled to bring in gold and the only motive appears to be evasion of duty (roughly Rs. 58,000/-) the redemption fine of Rs. 75,000/- and a personal penalty of Rs. 35,000/- besides duty of Rs. 58,000/- seems quite reasonable. 20. Shri Kamlesh Kumar played only a peripheral and that too on the spot role imposed on him. Thus a token penalty on him is also not assailable if seen in the background of quantum of duty sought to be evaded and on this spot role thrust on him. 21. In view of the above discussions the following orders are passed :- (i) The conclusion reached by Collector (Appeals) that import of gold in this case is not prohibited is incorrect in view of the condition No. 3 (i.e. payment of duty to be made in foreign exchange) not being complied with at the time of import of goods. There is a breach of this condi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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