Prohibited goods require a valid statutory ban, but baggage-rule breaches can still justify confiscation and penalty.

Gold jewellery imported as baggage could not be treated as prohibited goods because no prohibition under the Customs Act or a valid order under the Foreign Trade (Development and Regulation) Act was shown, so confiscation under section 111(d) was not sustainable. However, baggage imports remained subject to declaration and quantity limits, and the excess jewellery was liable to confiscation for breach of baggage requirements; penalty under section 112(a) was therefore justified in principle, though the consequence was moderated. The result was partial relief: the prohibition-based confiscation was set aside, while penalty liability was maintained.

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Issues: (i) Whether the gold jewellery imported as baggage was prohibited goods so as to sustain confiscation under section 111(d) of the Customs Act, 1962. (ii) Whether the goods were liable to confiscation for breach of baggage import requirements and whether penalty under section 112(a) of the Customs Act, 1962 was warranted.

Issue (i): Whether the gold jewellery imported as baggage was prohibited goods so as to sustain confiscation under section 111(d) of the Customs Act, 1962.

Analysis: There was nothing on record to establish that import of gold jewellery was prohibited under the Customs Act, 1962 or any other law in force. Under section 33 of the Foreign Trade (Development and Regulation) Act, 1992, goods become prohibited only if an order under section 32 of that Act is issued by the Central Government. No such order was shown to exist. The imported jewellery therefore could not be treated as prohibited goods.

Conclusion: Confiscation under section 111(d) of the Customs Act, 1962 was not sustainable and the finding on prohibition was set aside in favour of the assessee.

Issue (ii): Whether the goods were liable to confiscation for breach of baggage import requirements and whether penalty under section 112(a) of the Customs Act, 1962 was warranted.

Analysis: The baggage rules permitted only a limited quantity free of duty, and the quantity carried was far in excess of what was allowable. The record did not establish concealment or a deliberate smuggling design, but the failure to comply with declaration requirements made the goods liable to confiscation. In those circumstances, penalty was justified, though the facts warranted a moderated consequence rather than full endorsement of the confiscatory order.

Conclusion: Confiscation for breach of baggage requirements under section 111(1) of the Customs Act, 1962 was not sustained as ordered, while penalty under section 112(a) of the Customs Act, 1962 was upheld in principle.

Final Conclusion: The appeal succeeded in part, with the prohibition-based confiscation disapproved and relief granted against the confiscation order, while penalty liability was maintained and the appellant was directed to take the jewellery out of India in compliance with the order.

Ratio Decidendi: Goods can be confiscated as prohibited only when a valid statutory prohibition is shown, but baggage imports remain subject to declaration and duty-compliance requirements, breach of which may attract confiscation and penalty.

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