Passenger wins appeal against gold chains confiscation, gets redemption option for Rs.3 lakh fine

CESTAT Ahmedabad set aside absolute confiscation of gold chains and foreign currency seized from passenger. Court held gold is not prohibited item but restricted, distinguishing between prohibited goods (arms, drugs) and restricted goods subject to import conditions. Passenger given option to redeem gold chains for Rs.3,00,000 redemption fine. Foreign currency confiscation overturned as revenue failed to prove improper importation under Section 111 Customs Act. Penalties under Sections 112(a) and 114AA reduced to Rs.1,00,000 and Rs.50,000 respectively. Appeal partly allowed.

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Issues Involved:
1. Maintainability of the appeal before the Tribunal.
2. Absolute confiscation of gold chains.
3. Confiscation of foreign currency.
4. Imposition of penalties under Section 112(a) and Section 114AA of the Customs Act, 1962.

Summary:

1. Maintainability of the Appeal:
The Tribunal examined whether the appeal was maintainable under Section 129A of the Customs Act, 1962. The proviso to Section 129A restricts the Tribunal from deciding appeals related to goods imported or exported as baggage. However, since the appeal was filed against the order of the Principal Commissioner of Customs and not the Commissioner (Appeals), the Tribunal held that the appeal was maintainable.

2. Absolute Confiscation of Gold Chains:
The appellant argued that the gold chains were personal effects and should be allowed duty-free entry under the Baggage Rules, 1998. The Tribunal found that the appellant had not made a clear declaration of the goods but noted that gold is not a prohibited item and can be imported under certain conditions. The Tribunal cited several judgments where redemption of absolutely confiscated gold was allowed and concluded that absolute confiscation was not warranted. The Tribunal set aside the order of absolute confiscation and allowed the appellant to redeem the gold chains on payment of a redemption fine of Rs. 3,00,000/-.

3. Confiscation of Foreign Currency:
The Tribunal noted that Section 111 of the Customs Act provides for the confiscation of improperly imported goods. However, there was no evidence to prove that the foreign currency was improperly imported. Citing relevant case law, the Tribunal held that mere improper procurement in contravention of FEMA does not attract Section 111 of the Customs Act. Consequently, the Tribunal set aside the confiscation of the foreign currency and ordered its release to the appellant.

4. Imposition of Penalties:
The Tribunal considered the penalties imposed under Section 112(a) and Section 114AA of the Customs Act. Given the totality of the circumstances, the Tribunal reduced the penalty under Section 112(a) to Rs. 1,00,000/- and under Section 114AA to Rs. 50,000/-.

Conclusion:
The appeal was partly allowed. The Tribunal set aside the absolute confiscation of the gold chains and allowed their redemption on payment of a fine. The confiscation of the foreign currency was also set aside, and the penalties were reduced.

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