2016 (8) TMI 340 - AT - Customs

Appeal Dismissed, Penalties Imposed, Gold Redemption Allowed

Commissioner of Customs (Prev.), Lucknow Versus Shri Mazaharul Haq and Shri Azimul Haque

Commissioner of Customs (Prev.), Lucknow Versus Shri Mazaharul Haq and Shri Azimul Haque - 2016 (341) E.L.T. 450 (Tri. - All.) Issues Involved:1. Whether absolute confiscation of undeclared gold bars/biscuits was warranted.2. Whether the respondents were eligible to import gold under the Baggage Rules, 1998.3. Whether the penalties imposed under Sections 112 and 114AA of the Customs Act, 1962 were justified.4. Whether the respondents were involved in smuggling activities.Issue-wise Detailed Analysis:1. Absolute Confiscation of Undeclared Gold Bars/Biscuits:The primary issue was whether the absolute confiscation of the undeclared gold bars/biscuits weighing approximately 111 grams each, found in possession of the respondents, was warranted. The respondents were intercepted at Lucknow Airport while passing through the green channel without declaring the gold bars. The gold bars were seized under Section 111(i), (l), and (m) of the Customs Act, 1962, as they were not declared in the disembarkation card. The respondents argued that they were bringing the gold for personal use and were intercepted before they could make a declaration. The adjudicating authority held that the gold was liable to confiscation but allowed redemption on payment of duty and fine, rather than absolute confiscation, as the respondents were available and the gold was not concealed in a manner indicating smuggling.2. Eligibility to Import Gold under Baggage Rules, 1998:The respondents had returned to India after staying abroad for more than one year, making them eligible to import gold up to 1 Kg under the Baggage Rules, 1998. The adjudicating authority found that the quantity of gold imported (approximately 232 grams each) was permissible for import subject to declaration. The respondents failed to declare the gold, leading to its confiscation. However, the adjudicating authority and the Commissioner (Appeals) both found that the quantity of gold could not be termed as commercial and was otherwise permissible for import, thus supporting the respondents' eligibility under the Baggage Rules.3. Penalties under Sections 112 and 114AA of the Customs Act, 1962:The adjudicating authority imposed a penalty of Rs. 1,00,000 each under Section 112 and Rs. 10,000 each under Section 114AA of the Customs Act, 1962. The respondents contested the penalties, arguing that no serious offense was made out as they were intercepted before they could declare the gold and pay the duty. The Commissioner (Appeals) upheld the penalties, finding them proper and sustainable, as the respondents had failed to declare the gold and were involved in its illegal importation.4. Involvement in Smuggling Activities:The revenue argued that the respondents were carriers of gold for another person (Shri Wali) and attempted to smuggle the gold into India. The respondents admitted in their statements that they were promised money to carry the gold and deliver it to a person outside the airport. The adjudicating authority found that the respondents were involved in smuggling activities, as they had concealed the gold in their wallets and failed to declare it. The Commissioner (Appeals) also found that the respondents were involved in smuggling, but allowed redemption of the gold on payment of duty and fine, as the respondents were available and the gold was not concealed in a manner indicating absolute smuggling.Conclusion:The appeal by the revenue was dismissed, and the order of the Commissioner (Appeals) was upheld. The respondents were found to have committed a non-declaration offense, and the penalties imposed were deemed adequate. The respondents were entitled to redeem the confiscated gold on payment of duty and fine, and no absolute confiscation was warranted under the circumstances.