Undisclosed gold import and absolute confiscation under customs law, with redemption denied and one penalty provision set aside.

Undisclosed import of gold bars by passengers was treated as import in violation of customs restrictions and therefore as prohibited goods, supporting absolute confiscation without any right of redemption on payment of fine. The findings rested on nil declaration, an unchallenged mahazar, and no effective rebuttal of the seizure record. Penalty under Section 112(a) was considered sustainable because the goods were liable to confiscation, but Section 114AA was held inapplicable as the case did not involve short levy. The penalty under Section 112(a) was reduced to a nominal amount, while the other penalty was deleted.

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Issues: (i) whether the gold bars imported by the passengers were liable to absolute confiscation as prohibited goods and whether redemption on payment of fine was required; (ii) whether the penalties imposed under Sections 112(a) and 114AA of the Customs Act, 1962 were sustainable.

Issue (i): whether the gold bars imported by the passengers were liable to absolute confiscation as prohibited goods and whether redemption on payment of fine was required.

Analysis: The disembarkation slips showed nil declaration, the mahazar was not challenged, and the passengers did not cross-examine the witness or effectively displace the seizure record. On those facts, the import was treated as undisclosed and not covered by the claimed entitlement. Once the goods were held to be not importable in the manner attempted, they were treated as prohibited goods. In such circumstances, the Commissioner had discretion to order absolute confiscation and was not bound to permit redemption on payment of fine.

Conclusion: The gold bars were rightly ordered to be absolutely confiscated and no right to redemption on payment of fine was established.

Issue (ii): whether the penalties imposed under Sections 112(a) and 114AA of the Customs Act, 1962 were sustainable.

Analysis: Penalty under Section 112(a) was considered maintainable because the goods had been rendered liable to confiscation. However, penalty under Section 114AA was found inappropriate because the case did not involve short levy and the absolute confiscation had already been upheld. In view of the circumstances, the penalty under Section 112(a) was reduced to a nominal amount.

Conclusion: The penalty under Section 114AA was set aside, and the penalty under Section 112(a) was sustained only to the extent of Rs. 1,00,000 each.

Final Conclusion: The confiscation of the gold and the currency was sustained, the redemption claim failed, the Revenue's appeals were rejected, and only the penal consequence was moderated by deleting one penalty provision and reducing the other.

Ratio Decidendi: Goods imported in undisclosed violation of customs restrictions can be treated as prohibited goods, justifying absolute confiscation, while penalty provisions must be applied according to the specific statutory ingredients proved on the facts.

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