Tribunal Allows Redemption of Confiscated Gold Bars with Fine; Sets Aside Penalty for False Declarations; Upholds Packing Confiscation.

The Tribunal modified the Commissioner's order, allowing the appellant to redeem confiscated gold bars upon payment of a Rs. 5,00,000/- redemption fine and applicable duty, citing lack of restriction on gold except for duty payment. The penalty under Section 114AA was set aside due to absence of false declarations. Confiscation of packing materials and the penalty under Section 112(b) were upheld.

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Issues Involved:
1. Absolute confiscation of gold bars.
2. Confiscation of packing material.
3. Imposition of penalty under Section 112(b) of the Customs Act.
4. Imposition of penalty under Section 114AA of the Customs Act.

Summary:

1. Absolute Confiscation of Gold Bars:
The Commissioner ordered the absolute confiscation of 15 gold bars weighing 1749.60 grams valued at Rs. 48,37,644/- under Section 111(i), (l) & (m) of the Customs Act, 1962. The appellant argued that the gold, not being prohibited goods, should have been allowed an option for redemption fine. The Tribunal held that the reliance on a 1993 Circular was misplaced as the gold is not subject to any restriction except for duty payment. The Tribunal cited various cases, including *Yakub Ibrahim Yusuf* and *Mohini Bhatia*, supporting the option for redemption fine. The Tribunal modified the order to allow the appellant to redeem the gold on payment of a redemption fine of Rs. 5,00,000/- along with the applicable baggage rate of duty.

2. Confiscation of Packing Material:
The Commissioner ordered the confiscation of packing materials (shoes and socks) used for concealing the gold under Section 119 of the Customs Act, 1962. This part of the order was not challenged by the appellant and was upheld by the Tribunal.

3. Imposition of Penalty under Section 112(b):
The Commissioner imposed a penalty of Rs. 5,00,000/- on the appellant under Section 112(b) of the Customs Act, 1962. The appellant did not challenge this part of the order, and it was upheld by the Tribunal.

4. Imposition of Penalty under Section 114AA:
The Commissioner imposed a penalty of Rs. 4,00,000/- under Section 114AA of the Customs Act, 1962. The Tribunal found that the appellant did not make any false declaration or use any false document, which is a prerequisite for invoking Section 114AA. The Tribunal cited cases like *Ismail Ibrahim* and *Jitender Singh*, which held that penalties under Section 114AA are not justified if no false declaration or document is used. Consequently, the penalty under Section 114AA was set aside by the Tribunal.

Conclusion:
The appeal was allowed to the extent of modifying the order to permit the redemption of the confiscated gold bars on payment of a redemption fine and setting aside the penalty under Section 114AA. The confiscation of packing materials and the penalty under Section 112(b) were upheld.

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