2008 (2) TMI 765 - AT - Customs

Tribunal modifies Commissioner's order, allows release of gold jewelry, returns currency, reduces penalties, upholds confiscation.

The Tribunal modified the Commissioner's order by allowing the release of gold jewellery on payment of duty and fine, returning the seized foreign ... Absolute Confiscation - penalty - Redemption fine - concealment of Jewellery - Baggage Rules - Notification No. 31/03 Issues Involved:1. Confiscation of gold jewellery and foreign currency.2. Imposition of personal penalties.3. Admissibility of statements recorded under Section 108 of the Customs Act.4. Application of Notification No. 31/2003-Cus. (N.T.), dated 1-3-2003.5. Violation of principles of natural justice.6. Legality of seizure and retention of foreign currency.7. Confiscation under Section 111(d) and Section 121 of the Customs Act, 1962.Issue-wise Detailed Analysis:1. Confiscation of Gold Jewellery and Foreign Currency:The Commissioner of Customs ordered the absolute confiscation of gold jewellery valued at Rs. 68,69,200/- and foreign currency of USD 2,500. The appellant argued that the gold jewellery was not concealed and was intended to be declared, as indicated by the invoice from Al Yom Jewellery, Dubai. The Tribunal held that the gold jewellery should not be absolutely confiscated but allowed to be cleared on payment of appropriate duty and a redemption fine of Rs. 10 lakhs. The foreign currency seized was ordered to be returned as no notice for confiscation was issued within six months, aligning with Section 110 of the Customs Act, 1962.2. Imposition of Personal Penalties:Personal penalties of Rs. 4 lakhs on the 1st appellant and Rs. 2 lakhs each on the other two appellants were imposed under Section 112 of the Customs Act, 1962. The Tribunal reduced the penalty on the 1st appellant to Rs. 2 lakhs and set aside the penalties on the other two appellants.3. Admissibility of Statements Recorded under Section 108:The appellants retracted their statements recorded under Section 108, arguing they were under illegal detention beyond 24 hours before being produced in court. The Tribunal noted that the statements must be treated with caution due to the illegal detention, but found that the appellant's actions indicated an intention to evade duty.4. Application of Notification No. 31/2003-Cus. (N.T.), dated 1-3-2003:The appellant claimed eligibility for concessional duty under Notification No. 31/2003-Cus. The Tribunal found that the appellant did not meet the criteria as her short visits to India exceeded 30 days within six months, disqualifying her from the benefits of the notification.5. Violation of Principles of Natural Justice:The appellants argued that the Panchas and Investigating officers were not offered for cross-examination, violating principles of natural justice. The Tribunal acknowledged this concern but did not find it sufficient to overturn the entire case, focusing instead on the merits of the evidence presented.6. Legality of Seizure and Retention of Foreign Currency:The Tribunal ruled that the retention of foreign currency beyond six months without issuing a notice for confiscation was illegal. The foreign currency seized from the 1st appellant was ordered to be returned. Similarly, the foreign exchange seized from the 2nd appellant was to be returned as the charge under Section 121 of the Customs Act was not proven.7. Confiscation under Section 111(d) and Section 121 of the Customs Act, 1962:The Tribunal held that the jewellery could not be confiscated under Section 111(d) as it was not prohibited goods. The absolute confiscation was unjustified, and the goods were to be released on payment of duty and redemption fine. The foreign exchange seized under Section 121 was also ordered to be returned due to lack of evidence proving it was the sale proceeds of smuggled goods.Conclusion:The Tribunal modified the Commissioner's order, allowing the release of gold jewellery on payment of duty and fine, returning the seized foreign currency, reducing penalties, and upholding the confiscation of jewellery boxes and bags with a nominal fine. The appeals were disposed of accordingly.