Passenger baggage imports and customs confiscation: freely importable goods cannot be confiscated absent a valid restriction or misdeclaration.

Paragraph 5.2 of the Export Import Policy 1997-2002 was read as permitting a passenger to import goods that were otherwise freely importable without a licence, and paragraph 5.6 was not treated as imposing a contrary restriction. Confiscation under Section 111(d) of the Customs Act, 1962 was not sustainable for the freely importable goods, though confiscation was maintained for the remaining goods covered by the order. The redemption fine was to be determined under Section 125(2) on the basis of sale price less duty payable, and the penalty was confirmed in view of the attempted import without a licence and the nature of the goods.

---

---

Issues: (i) Whether the Export Import Policy permitted a passenger to import as baggage goods that were otherwise freely importable without a licence; (ii) whether confiscation under Section 111(d) of the Customs Act, 1962 was sustainable for the goods found to be freely importable or otherwise restricted; (iii) whether the redemption fine had to be fixed on the basis of sale price less duty payable and whether the penalty deserved interference.

Issue (i): Whether the Export Import Policy permitted a passenger to import as baggage goods that were otherwise freely importable without a licence.

Analysis: Paragraph 5.2 of the Export Import Policy 1997-2002 allowed import of goods importable without restriction by any person. Paragraph 5.6, which referred to such goods as part of passenger baggage, was held not to create a restriction inconsistent with paragraph 5.2. The policy was read as not barring a passenger from importing goods that were otherwise freely importable.

Conclusion: The policy did not restrict a passenger from importing goods that were otherwise freely importable without a licence.

Issue (ii): Whether confiscation under Section 111(d) of the Customs Act, 1962 was sustainable for the goods found to be freely importable or otherwise restricted.

Analysis: Since freely importable goods could be imported by a passenger, their confiscation was not justified. The Court also noted that the goods had not been declared as baggage and that clause (m) of Section 111 had not been invoked for misdeclaration. Confiscation was therefore sustained only for the goods found to be covered by the order of confiscation and not for the freely importable goods.

Conclusion: Confiscation of the freely importable goods was set aside, while confiscation of the remaining goods was upheld.

Issue (iii): Whether the redemption fine had to be fixed on the basis of sale price less duty payable and whether the penalty deserved interference.

Analysis: Considering the attempt to import the goods without a licence, their value and quantity, the redemption fine was directed to be determined under Section 125(2) of the Customs Act, 1962 on the basis of sale price less duty payable. On the same reasoning, the penalty was not found fit for interference.

Conclusion: The redemption fine was to be fixed under Section 125(2) of the Customs Act, 1962, and the penalty was confirmed.

Final Conclusion: The appeal succeeded only to the extent that confiscation of the freely importable goods was removed, while the confiscation of the remaining goods, the redemption fine mechanism, and the penalty were maintained.

Ratio Decidendi: A passenger may import goods that are otherwise freely importable without a licence, and confiscation cannot be sustained merely because such goods were carried as baggage when no valid restriction under the policy or misdeclaration under the Customs Act is established.

---