Tribunal modifies order, allows gold redemption on payment, reduces penalty, sets aside currency confiscation.

The Tribunal modified the Commissioner's order, allowing redemption of gold on payment of a fine and reducing the penalty to Rs. 5 lakhs. Confiscation of foreign currency was set aside, and the case was remitted for quantification of the redemption fine. The Department was directed to return the sale proceeds of the gold after deductions.

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Issues Involved:
1. Confiscation of gold and foreign currency.
2. Ownership and declaration of gold.
3. Penalty imposed on the appellant.
4. Redemption of confiscated gold.
5. Confiscation of foreign currency.

Issue-wise Detailed Analysis:

1. Confiscation of Gold and Foreign Currency:
The appellant was intercepted at Mumbai Airport carrying 25 kgs of gold and foreign currency worth Rs. 6,54,830/-. The gold was confiscated under Section 111(d) of the Customs Act, 1962, read with Section 3 of the Foreign Trade (Development & Regulation) Act, 1962. The briefcase and foreign currency were confiscated under Sections 118(a) and 119 of the Customs Act, 1962. The initial adjudication ordered absolute confiscation of the gold and currency and imposed a penalty of Rs. 50 lakhs on the appellant. The Tribunal later allowed redemption of gold for export on payment of a fine of Rs. 10 lakhs and reduced the penalty to Rs. 5 lakhs, setting aside the confiscation of foreign currency.

2. Ownership and Declaration of Gold:
The appellant claimed he was carrying the gold on behalf of five NRIs who initially denied ownership but later retracted their statements. The Tribunal found no documentary evidence supporting the claim that the appellant was acting on behalf of the five NRIs. The gold was purchased by the appellant in Zurich, and no evidence showed that the gold was bought for the NRIs. The Tribunal concluded that the appellant was the owner of the gold, and the NRIs' failure to declare the gold at the airport further supported this conclusion.

3. Penalty Imposed on the Appellant:
The Commissioner initially imposed a penalty of Rs. 50 lakhs, which was reduced to Rs. 5 lakhs by the Tribunal. The Tribunal found this reduction reasonable and upheld the penalty of Rs. 5 lakhs, considering the appellant's involvement in carrying the gold without proper declaration and compliance with customs regulations.

4. Redemption of Confiscated Gold:
The Tribunal allowed the appellant to redeem the gold on payment of a fine, despite the Department's contention that the gold was a prohibited item and could not be redeemed. The Tribunal clarified that the gold did not fall under the category of absolutely prohibited items like arms or drugs, and its import was permitted under certain conditions. The Tribunal directed the Department to return the sale proceeds of the gold after deducting the fine and penalty, emphasizing that duty was not deductible from the sale proceeds.

5. Confiscation of Foreign Currency:
The Tribunal set aside the confiscation of foreign currency, noting that the appellant had declared it. There was no ground for confiscation, and the foreign currency was ordered to be returned to the appellant.

Conclusion:
The Tribunal modified the Commissioner's order, allowing the redemption of gold on payment of a fine and reducing the penalty to Rs. 5 lakhs. The confiscation of foreign currency was set aside. The case was remitted to the Commissioner for quantification of the redemption fine, and the Department was directed to return the sale proceeds of the gold after deducting the fine and penalty. The appeal was disposed of accordingly.

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