Confiscation, Duty, Interest & Penalties Upheld under Customs Act

The court upheld the confiscation of undeclared memory cards and handbags used for concealing goods under the Customs Act, along with the imposition of customs duty, education cess, interest on duty, and a penalty on the applicant. The judgment affirmed the applicability of Section 28 for duty demand, interest under Section 28AB, and penalties under Section 112. The Revision Application challenging the interest imposition was rejected, affirming the original decision on confiscation, duty, interest, and penalties.

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Issues Involved:
1. Confiscation of goods under Section 111 (l) & (m) of the Customs Act, 1962.
2. Confiscation of baggage used for concealing goods under Section 118 read with Section 119 of the Customs Act, 1962.
3. Demand of customs duty and education cess under Section 28 of the Customs Act, 1962.
4. Imposition of interest on duty under Section 28AB of the Customs Act, 1962.
5. Imposition of penalty under Section 112 of the Customs Act, 1962.

Issue-wise Detailed Analysis:

1. Confiscation of Goods:
The applicant arrived from Hong Kong carrying undeclared memory cards. Upon inspection, 6714 pieces of 4 GB memory cards were found in his luggage. The goods were seized under Section 110 of the Customs Act, 1962, as they were believed to be smuggled and liable for confiscation under Section 111 (l) & (m). The Additional Commissioner of Customs ordered the confiscation of these goods with an option to redeem them on payment of a redemption fine of Rs. 2,50,000 and appropriate duty and interest.

2. Confiscation of Baggage:
The two hand bags used for concealing the seized goods were also confiscated under Section 118 read with Section 119 of the Customs Act, 1962. The applicant was given the option to redeem the bags on payment of a redemption fine of Rs. 3,000.

3. Demand of Customs Duty and Education Cess:
Customs duty and education cess amounting to Rs. 3,90,290 were demanded under Section 28 of the Customs Act, 1962. The applicant argued that Section 28 is not applicable as no order for clearance under Section 47 was passed. However, it was held that the duty was rightly demanded under Section 28 since the goods were chargeable to duty under Section 12 read with Section 78 of the Act.

4. Imposition of Interest on Duty:
The applicant contended that interest under Section 28AB is not applicable as the goods were seized and not cleared under Section 47. The judgment clarified that interest is chargeable on the duty amount where duty has not been paid, as per Section 28AA (now 28AB). The interest was rightly held to be payable on the duty demanded.

5. Imposition of Penalty:
A penalty of Rs. 2,00,000 was imposed on the applicant under Section 112 of the Customs Act, 1962, for various acts of omission and commission. The Commissioner (Appeals) modified the penalty to Rs. 1,00,000.

Conclusion:
The Revision Application was filed challenging the applicability of Section 28AB for charging interest. The judgment upheld the demand for duty and interest, stating that the goods were chargeable to duty at the time of import, and interest is applicable on unpaid duty. The confiscation of goods and baggage, as well as the penalties imposed, were also upheld. The Revision Application was rejected as being devoid of merits.

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