TaxTMI 
TaxTMI 
2016 (8) TMI 530
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....499 Kgs of smuggled 22 ct gold jewellery from the possession of one Mr.R.Mahaveer. He had given voluntary statements dated 19.03.2013 and 25.03.2013 respectively, confessing that he had smuggled Singapore gold jewellery. 3. Case of the appellant is that they used to receive gold jewellery through their sister concern, namely M/s.Focus Jewel Arcade Pvt. Ltd., Coimbatore and one Mr.Shameem, is the person in-charge of procuring gold jewellery for them. 4. Before the writ court, appellant also contended that the request to provisionally release the seized goods in terms of Section 110-A of the Customs Act, 1962 was not considered, despite appellant's assurance that they would cooperate in the investigation and therefore, they were constrained to file W.P.No.18833/2013, for a mandamus directing Additional Director General, Directorate of Revenue Intelligence, Chennai Zonal Unit, Chennai to release gold weighing 5541.92 Grams, seized vide Mahazar dated 27.03.2013. 5. On behalf of Directorate of Revenue Intelligence, Chennai (1st respondent herein), a counter affidavit has been filed contending inter alia that on specific intelligence, that Mr.R.Mahaveer has smuggled gold jew....
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....ngapore gold jewellery. 7. The Directorate of Revenue Intelligence, has further stated that, based on the voluntary statement of Mr.R.Mahaveer, corroborated with documents recovered from his residential premises, simultaneous searches were also conducted on various buyers stated supra, who have purhcased Singapore gold jewellery from Mr.R.Mahaveer. Search conducted at the business premises of M/s.Malabar Diamond Gallery Pvt. Ltd., the appellant herein, on 27.03.2013 led to the recovery of the smuggled gold jewellery of Singapore origin received from Mr.R.Mhaveer. On assaying the gold jewellery, Mr.Mohan Achari, a govt approved assayer certified that the said gold jewellery was 22 ct gold, totally weighing 5541.92 gms, having a market value of Rs. 1,54,28,705/-. Simultaneously, on 27.03.2013, during search operations conducted at the business premises of M/s.Focus Jewel Arcade Pvt. Ltd., Coimbatore, a total of 894 gms of Singapore gold jewellery valued at Rs. 24,88,896/- was seized by the officers of DRI, Coimbatore, as the same was admittedly the remanants of 1400 gms of smuggled gold jewellery of Singapore origin purchased from Mr.R.Mahaveer without bill. 8. The Directorate ....
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....nai; that as per his instructions, Mr.Saju N, Manager of M/s.Malabar Gold and Diamond Pvt. Ltd., Chennai, used to pay Mr.R.Mahaveer for the gold jewellery of Singapore origin in terms of refined gold bars; that during the previous week, they had received around 1400 gms of gold jewellery of Singapore origin without bill from Mr.R.Mahaveer, of which 894 grams came to be seized by the DRI officers; that he was aware that procuring/trading of gold jewellery of Singapore origin without proper documents was an offence, but did so due to their better quality and lower price. 10. The Directorate of Revenue Intelligence, Chennai has further submitted that Mr.Praveen Kumar, Burma Bazaar operator has been arrested and remanded to judicial custody. According to the first respondent, as per Customs Notification No.3/2012 dated 16.01.2012, only passengers of Indian origin or a passenger in possession of a valid passport issued under the Indian Passports Act, 1967, who have stayed abroad for six months and above, are eligible to import gold of foreign origin and clear the same on payment of Customs duty, at the rate prescribed. The said notification, thus imposes restriction on the import of ....
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....Commissioner of Customs (Import), Chennai-600001 and Commissioner of Customs (AIR), Chennai-600027, have been impleaded as respondents 2 and 3, in the writ petition. 13. On the above facts, when the writ petition came up for hearing, petitioner/appellant has submitted that gold jewels were purchased for valuable consideration, and that a reply dated 18.11.2013 to the show cause notice, has already been submitted. 14. On behalf of the department, submission has been made that the department is ready and willing, to adjudicate the claim, pursuant to the show cause notice, provided all the noticees, cooperate with the department. On the above submissions, the writ court in W.P.No.18833/2013 dated 17.11.2014 has ordered as, hereunder: " 5. From the copy of the show cause notice dated 16.9.2013, it is seen that there are 19 persons, against whom, notice has been issued. In such circumstances, no direction can be issued to the respondents, solely at the instance of the petitioner herein, who is one among 19 noticees. 6. Therefore, a direction is issued to the third respondent to adjudicate the claim made in the show cause notice dated 16.09.2013 subject to the con....
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....pecified, in the subsequent paragraphs procedure set out in Section 110 of the Act. 17. Referring to the Notification No.72/97-Cus.(NT) dated 22.12.1997, learned counsel for the appellant submitted that as per schedule 4A to the said notification, gold in all forms, including bulliion, ingot, coin, ornament, crude jewellery, has been included as goods of perishable nature, depreciation in the value in the passage time, and therefore, the same can be disposed of, in such a manner as the Central Government may specify from time to time, by the proper officer. Inviting attention of this court to Circular No.22/2004-Cus. dated 03.03.2004, learned counsel for the appellant further submitted that even in the case of provisional assessment/clearance of disputed or offending consignments, Central Board of Excise & Customs, New Delhi has issued the aforesaid circular, by taking adequate bank guarantee/security to safeguard revenue (possible fine and penalty), gold seized can be released. He further submitted that though, the appellant has submitted their reply dated 18.11.2013 to the Commissioner of Customs (Seaport - Import), Chennai, and also assured cooperation, one of the 19 noticees....
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....cating Authority, on 23.06.2014, the appellant had also appeared and cooperated with the adjudication but then, the proceedings have been stayed by this court. Though the writ court in W.P.No.18833/2013 dated 17.11.2014 directed the respondents to complete the proceedings as expeditiously as possible, preferably within six months from the date of receipt of a copy of the order and accordingly, adjudication proceedings also commenced, because of the stay of the proceedings, the appellant could not effectively implement the orders. 20. Referring to Section 125 of the Customs Act, 1962, learned counsel for the appellant submitted that whenever confiscation of any goods is authorised by the Customs Act, 1962, the officer adjudging it, may, in the case of any goods, the importation or exportation thereof is prohibited under this Act or under any other law for the time being in force, and shall, in the case of any other goods, give to the owner of the goods or, where such owner is not known, the person from whose possession or custody such goods have been seized, an option to pay in lieu of confiscation such fine as the said officer thinks fit. 21. Reiterating that import of gold i....
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....h seizure is made from the possession of any person, - (i) on the person from whose possession the goods were seized; and (ii) if any person, other than the person from whose possession the goods were seized, claims to be the owner thereof, also on such other person; (b) in any other case, on the person, if any, who claims to be the owner of the goods so seized. Referring to sub-section (2) of Section 123 of the Customs Act, 1962, he further submitted that the said section shall apply to all the goods including gold. According to him, unless the appellant satisfies that they are not smuggled goods and discharged their burden, they cannot seek for release of goods. In this context, he also referred to section 2(39) of the Customs Act, 1962, which defines "smuggling" and the said section reads "smuggling", in relation to any goods, means any act or omission which will render such goods liable to confiscation under section 111 or section 113 of the Customs Act. Learned counsel for the 2nd respondent submitted that when the act or omission of the appellant renders the goods liable to be confiscation under Section 111 or 113 of the Act, as the case may be, ....
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....counsel for the 2nd respondent submitted that whether on the conclusion of the adjudication proceedings, the adjudicating authority would give right of redemption or not, is not a matter to be decided at the stage of provisional release and it can be done only on the conclusion of the adjudication proceedings by the adjudicating authority and in such circumstances, as on today, there is no right, much less absolute right, to claim release of gold, which according to the department is smuggled in to the country. In this context, he also referred to the relevant paragraphs in Lexus Exports case. At this juncture, he also submitted that when Lexus Exports P Ltd's case was decided in 1994 when Section 110-A of the Customs Act, 1962 was not there in the statute book. According to him, at that point of time, power to provisionally release the seized goods was exercised under Rule 206 of the Central Excise Rules, 1944 and in that context of the matter, drew the attention of this court to the judgment in Southern Springs and wire products vs Collector of Central Excise reported in 1990 (48) ELT 335 (Mad). 27. Placing reliane on Om Prakash Bhatia vs. Commissioner of Customs, Delhi re....
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....ant cannot, at the matter of right, claim provisional release of goods on payment in redemption of duty and in the reported case, the court has held that even false declaration of goods and violation of the conditions would make the goods, fall within the ambit of section 2(33) of the Customs Act, 1962 (prohibited goods). 31. Placing reliance on a decision in Ashish Kumar Chaurasia vs. Commissioner, CESTAT reported in 2015 (325) ELT 250 (All)(DB), learned counsel for the respondents further submitted that when the appellant has not produced any valid documents and discharged the burden under Section 123 of the Customs Act, 1962, goods seized are to be treated as smuggled goods and hence prohibited. 32. By way of reply, Mr.Joseph Prabhakar, learned counsel for the appellant submitted that Section 11A of the Customs Act, has no application to the case on hand, as the said Section defines, illegal import , as import of any goods in contravention of the provisions of the Customs Act, 1962 or any other law for the time being in force. 33. Referring to Sections 111 and 125 of the Customs Act, which deal with confiscation of imported goods, etc., and option to pay fine in lieu of....
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....date of receipt of passing of the order. However, at the instance of one of the noticees, adjudicatory proceedings have been stayed. 38. Before adverting to the rival contentions of both parties, it is relevant to have a cursory look at the provisions of the Customs Act, 1962. As per Section 2(33) of the Customs Act, prohibited goods means, any goods the import or export of which is subject to any prohibition under this Act or any other law for the time being in force but does not include any such goods in respect of which the conditions subject to which the goods are permitted to be imported or exported have been complied with. 39. Positively, prohibited goods are defined, as goods, import or export of which, should be subject to any prohibition under this Act or any other law for the time being in force. Negatively, Section 2(33) of the Act, also states that goods are not prohibited goods, when import or export of which, does not include any such goods, in respect of which, the conditions subject to which the goods are permitted to be imported or exported have been complied with. The expression subject to any prohibition under this Act or any other law for the time being in....
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.... words and phrases used by the Legislature shall be given their ordinary meaning and shall be constructed according to the rules of grammar. When the language is plain and unambiguous and admits of only one meaning, no question of construction of a statute arises, for the Act speaks for itself. It is a well recognized rule of construction that the meaning must be collected from the expressed intention of the Legislature." (vi) In Namamal v. Radhey Shyam reported in AIR 1970 Rajasthan 26, the Court held as follows: "11. Maxwell in his book on Interpretation of Statutes (11th Edition) at page 226 observed thus:-- "The rule of strict construction, however, whenever invoked, comes attended with qualifications and other rules no less important, and it is by the light which each contributes that the meaning must be determined. Among them is the rule that that sense of the words is to be adopted which best harmonises with the context and promotes in the fullest manner the policy and object of the legislature. The paramount object, in construing penal as well us other statutes, is to ascertain the legislative intent and the rule of strict construction is not violated b....
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.... contextual. A statute is best interpreted when we know why it was enacted. With this knowledge, the statute must be read, first as a whole and then section by section, clause by clause, phrase by phrase and word by word. If a statute is looked at, in the context of its enactment, with the glasses of the statute-maker, provided by such context, its scheme, the sections, clauses, phrases and words may take colour and appear different than when the statute is looked at without the glasses provided by the context. With these glasses we must look at the Act as a whole and discover what each section, each clause, each phrase and each word is meant and designed to say as to fit into the scheme of the entire Act. No part of a statute and no word of a statute can be construed in isolation. Statutes have to be construed so that every word has a place and everything is in its place." (xi) In Balram Kumawat v. Union of India reported in 2003 (7) SCC 628, the Supreme Court held that, Contextual reading is a well-known proposition of interpretation of statute. The classes of a statute should be construed with reference to the context vis-a-vis the other provisions so as to make a consistent ....
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....d have effect. The legislature is deemed not to waste its words or to say anything in vain and a construction which attributes redundancy to the legislature will not be accepted except for compelling reasons. It is not a sound principle of construction to brush aside words in a statute as being in apposite surplusage, if they can have appropriate application in circumstances conceivably within the contemplation of the statute. 41. In the light of the decisions and in the context of what is observed above, the expression, in section 2(33) of the Act, "prohibition under this Act" or any other law for the time being, has to be examined with the other provisions in the Customs Act, 1962. Section 2(39) of the Act, defines Smuggling in relation to any goods, which means, any act or omission which will render such goods liable to confiscation under section 111 or section 113. Chapter IV of the Act, deals with prohibition on importation and exportation of goods. Section 11 deals the power to prohibit importation or exportation of goods and the said Section is extracted hereunder: "(1) If the Central Government is satisfied that it is necessary so to do for any of the purposes s....
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...." 42. Chapter IV-A deals with detection of illegally imported goods and prevention of the disposal thereof. Section 11A speaks about illegal import, intimated place, notified date and notified goods. Section 11A(a) of the Act, defines, illegal import and the same is extracted hereunder: "illegal import" means the import of any goods in contravention of the provisions of this Act or any other law for the time being in force." 43. Chapter XIII deals with searches, seizure and arrest. Section 110 of the Act, deals with seizure of goods, documents and things and the same reads as follows: "SECTION 110. Seizure of goods, documents and things. - (1) If the proper officer has reason to believe that any goods are liable to confiscation under this Act, he may seize such goods: Provided that where it is not practicable to seize any such goods, the proper officer may serve on the owner of the goods an order that he shall not remove, part with, or otherwise deal with the goods except with the previous permission of such officer. (1A) The Central Government may, having regard to the perishable or hazardous nature of any goods, depreciation in the value ....
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....nts or things seized under section 110, may, pending the order of the adjudicating authority, be released to the owner on taking a bond from him in the proper form with such security and conditions as the adjudicating authority may require." 45. Chapter XIV deals with the confiscation of goods and conveyances and imposition of penalties. Section 111, dealing with confiscation of improperly goods, etc., read as follows: "The following goods brought from a place outside India shall be liable to confiscation: - (a) any goods imported by sea or air which are unloaded or attempted to be unloaded at any place other than a customs port or customs airport appointed under clause (a) of section 7 for the unloading of such goods; (b) any goods imported by land or inland water through any route other than a route specified in a notification issued under clause (c) of section 7 for the import of such goods; (c) any dutiable or prohibited goods brought into any bay, gulf, creek or tidal river for the purpose of being landed at a place other than a customs port; (d) any goods which are imported or attempted to be imported or are brought within the I....
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....s the non-observance of the condition was sanctioned by the proper officer; (p) any notified goods in relation to which any provisions of Chapter IVA or of any rule made under this Act for carrying out the purposes of that Chapter have been contravened." 46. Section 112 deals with the penalty for improper importation of goods, etc., and the same is extracted hereunder: "SECTION 112. Penalty for improper importation of goods, etc.- Any person, - (a) who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under section 111, or abets the doing or omission of such an act, or (b) who acquires possession of or is in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing, or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation under section 111, shall be liable, - (i) in the case of goods in respect of which any prohibition is in force under this Act or any other law for the time being in force, to a penalty not exceeding the value of the goods or five thousand r....
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....ply to gold, and manufactures thereof, watches, and any other class of goods which the Central Government may by notification in the Official Gazette specify." 49. Section 125 of the Act, speaks about the option to pay fine in lieu of confiscation and the said Section is extracted hereunder: "(1) Whenever confiscation of any goods is authorised by this Act, the officer adjudging it may, in the case of any goods, the importation or exportation whereof is prohibited under this Act or under any other law for the time being in force, and shall, in the case of any other goods, give to the owner of the goods or, where such owner is not known, the person from whose possession or custody such goods have been seized, an option to pay in lieu of confiscation such fine as the said officer thinks fit : Provided that, without prejudice to the provisions of the proviso to sub-section (2) of section 115, such fine shall not exceed the market price of the goods confiscated, less in the case of imported goods the duty chargeable thereon. (2) Where any fine in lieu of confiscation of goods is imposed under sub-section (1), the owner of such goods or the person referred ....
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....s a matter of right. This will prevent congestion at ports and warehouses. Adequate B.G./security may be taken to safeguard revenue (including possible fine and penalty). In case where it is decided to detain the consignment action should be taken to shift the same to a Customs Warehouse under Section 49 of the Customs Act, 1962 [Board's Circular No.84/95-Cus., dated 25.07.1995 may be referred to 1995(79) ELT T12]. 3. Kindly, bring the above instructions to the knowledge of all concerned." 52. Though the learned counsel for the appellant submitted that gold is included as one of perishable items in Schedule 4A to the Notification, dated 22.12.1997, issued under Section 110(1A) of the Customs Act, 1962 and also referred to the Circular, dated 03.03.2004, dealing with the issue of delay in release of consignments, due to classification disputes, seizure and provisional release thereof, reading of the above Circular, makes it clear that it mainly deal with the delay in classification disputes and therefore, it is the considered view of this Court, that the circulars do not mandate that smuggled goods seized and liable for confiscation, also should be mandatorily releas....
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.... Act or any other law for the time being in force are liable to be confiscated. As per Section 111(1) of the Customs Act, 1962, any dutiable or prohibited goods which are not included or are in excess of those included in the entry made under this Act, or in the case of baggage in the declaration made under Section 77 are also liable for confiscation. While this being the legal position, several carriers operated by 'Burma Bazaar' agents of Shri Mahaveer have smuggled gold jewellery from Singapore while arriving at various airports and have neither declared them to Customs nor they paid any duty on them. Hence, they are liable to confiscation as per section 111(d) and 111(1) of the ibid Act. Further, as per Section 79 of Customs, only bona fide baggage of a passenger is exempted from payment of duty, subject to the limits prescribed under Baggage Rules, 1998. As per Section 77 of the Customs Act, 1962, the owner of any baggage shall for the purpose of clearing the same has to make a declaration of its content to the proper officer. Further, according to Customs Notification No.3/2012 dated 16.01.2012, only passengers of Indian origin or a passenger in possession of a valid ....
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.... the Customs Act and Section 2(39), which defines, Smuggling , the Hon'ble Apex Court held that, "The third point made by Sri Sen is that once goods are cleared by the customs authorities, they are not liable to confiscation unless the order granting clearance is reversed in appropriate proceedings. He places reliance for this proposition on Union of India v. Jain Shudh Vanaspathi [1992 (1) Scale 34], affirming the decision of the Delhi High Court in Jain Shudh Vanaspati Ltd., and Anr. v. Union of India & Ors., [1982] 10 E.L.T. 43 (Del.) (to which one of us was a party). There was some discussion before us as to whether this Court has confirmed the decision of the High Court on the above point or left it open in para 4 of the judgment. We do not think it is necessary for for us to enter into this controversy. That was a case where the goods had been completely cleared accepting the plea of the importer that their import was not prohibited. The High Court held that so long as this acceptance stood the goods were not liable to confiscation. We are here concerned with the question whether the goods are liable to confiscation under s.111(j) and this question has to be answ....
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....Writ Petition before the High Court deserves to be and is hereby dismissed. The interest of the respondents will be adequately protected, if we direct the statutory adjudication to be completed within 45 days from 1st February, 1994. The first date of hearing before the statutory authority shall be 1st February, 1994, and the respondents shall appear before the authority without further notice. The authority shall call the matter on that date for further proceedings in the matter. The claim of the respondents to entitlement to redeem the goods by payment of fine in lieu of confiscation may be considered by the authority at the appropriate stage and in accordance with law. If the goods are so returned to the respondents, then respondents may become entitled to export them. Against the adjudication the respondents shall, of course, be entited to pursue their statutory appeals etc." 58. Reverting to the facts on hand, as rightly contended by Mr.A.P.Srinivas, learned counsel for the respondents that in Lexus Exports' Pvt. Ltd.,'s case (cited supra), when submissions were made by the Lexus Exports Pvt. Ltd., that the respondents therein would in any event be entitled to have ....
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....lied with, it would be considered to be prohibited goods. This would also be clear from Section 11 which empowers the Central Government to prohibit either 'absolutely' or 'subject to such conditions' to be fulfilled before or after clearance, as may be specified in the notification, the import or export of the goods of any specified description. The notification can be issued for the purposes specified in sub-section (2). Hence, prohibition of importation or exportation could be subject to certain prescribed conditions to be fulfilled before or after clearance of goods. If conditions are not fulfilled, it may amount to prohibited goods. This is also made clear by this Court in Sheikh Mohd. Omer v. Collector of Customs, Calcutta and others [(1970) 2 SCC 728], wherein it was contended that the expression 'prohibition' used in Section 111(d) must be considered as a total prohibition and that the expression does not bring within its fold the restrictions imposed by clause (3) of the Import Control Order, 1955. The Court negatived the said contention and held thus: " What clause (d) of Section 111 says is that any goods which are imported or attempted t....
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....on of the words prohibited goods was considered inOm Prakash Bhatia Vs. Commissioner of Customs (2003 (6) SCC 161) and in paragraph No.10 of the said judgment the Supreme Court held as follows: 10. From the aforesaid definition, it can be stated that (a) if there is any prohibition of import or export of goods under the Act or any other law for the time being in force, it would be considered to be prohibited goods; and (b) this would not include any such goods in respect of which the conditions, subject to which the goods are imported or exported, have been complied with. This would mean that if the conditions prescribed for import or export of goods are not complied with, it would be considered to be prohibited goods. This would also be clear from Section 11 which empowers the Central Government to prohibit either 'absolutely' or 'subject to such conditions' to be fulfilled before or after clearance, as may be specified in the notification, the import or export of the goods of any specified description. The notification can be issued for the purposes specified in Sub-section (2). Hence, prohibition of importation or exportation could be subject to certain ....
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.... the quantity of gold imported shall not exceed 10 Kg, per passenger import duty on gold shall be paid in convertible foreign currency; there will be no restriction on sale of such imported gold. A person shall be deemed to be of Indian origin, if he held an Indian passport at any time, or he or either of his parents or any of his grand parents, was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955); provided that the national of Pakistan or Bangladesh shall be deemed to be not of Indian origin. A spouse (not being a national of Pakistan or Bangladesh) of a person of Indian origin shall also be deemed to be of Indian origin. 8. ............ 9. In view of meaning of the word prohibition as construed laid down by the Supreme Court in Om Prakash Bhatia case we have to hold that the imported gold was prohibited goods since the respondent is not an eligible passenger who did not satisfy the conditions. The impugned order deserves to be set aside. 10. In 1992 (61) ELT 372(cited supra), the Supreme Court directed the Collector to consider the exercise of discretion. In this case....
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....even though gold is not an enumerated prohibited item and thus, can be imported, but when such import is subject to restrictions, including the necessity to declare the goods on arrival at the Customs Station and make payment of duty at the rate prescribed, release of the smuggled goods cannot be ordered. 64. Dictum of the Hon'ble Supreme Court and the High Courts makes it clear that gold, may not be one of the enumerated goods, as prohibited goods, still, if the conditions for such import are not complied with, then import of gold, would squarely fall under the definition, prohibited goods , in Section 2(33) of the Customs Act, 1962, which states that, any goods the import or export of which is subject to any prohibition under this Act or any other law for the time being in force but does not include any such goods in respect of which the conditions subject to which the goods are permitted to be imported or exported have been complied with. When there is a violation of statutory prohibitions, mentioned in Sections 11 and 11A of the Customs Act, 1962 or any other law, for the time being in force or restrictions imposed, such restrictions would also encompass the expression, ....
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.... fulfilled the conditions of import or export, any restriction on import or export, which is also to be treated as prohibition. 68. In Fast Track Traders v. Commissioner of Customs (Seaport Imports), Tuticorin reported in 2012 (286) ELT 681 (Mad.), there was mis-declaration of goods. Finding that there was a false declaration, a Hon'ble Division Bench of this Court held that when the condition is violated, the authorities can definitely have the recourse under law. 69. In Ashish Kumar Chaurasia v. Commissioner, CESTAT reported in 2015 (325) ELT 250 (All.), 79 silver ingots of foreign orgin, were recovered from the premises of the appellant therein. On the facts and circumstances of the case, the Allahabad High Court held that the appellant therein has failed to prove that the seized silver ingots were not smuggled goods and in such circumstances, upheld the levy of penalty, and ordered for confiscation. In the instant case, adjudicatary proceedings are pending. 70. In Sheik Mohammed Rafique Ahmed v. Joint/Additional C.C., Airport, Chennai reported in 2016 (331) ELT 337 (Mad.), a learned single Judge considered a case, where a passenger was carrying gold chains of 18 ca....
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....and as to how, the words, smuggled goods should be read within the definition of `imported goods' for the purpose of the Customs Act, 1962. At Paragraphs 6 to 8, 10, 13 and 14, the Hon'ble Supreme Court held as follows: "6) We may now briefly notice the scheme of the Act. The expression `dutiable goods', `duty', `import', `imported goods', `importer' and `smuggling' are defined in the following manner :- `Dutiable Goods' means any goods which are chargeable to duty and on which duty has not been paid. `Duty' means a duty of Customs and leviable under this Act. `Import', with its grammatical variations and cognate expressions, bring into India from a place outside India. `Imported goods' means any goods brought into India from a place outside India but does not include goods which have been cleared for home consumption. `Importer' means in relation to any goods at any time between their importation and the time when they are cleared for home consumption, includes any owner or any person holding himself out to be the importer. `Smuggling', in relation to any goods, means any ....
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.... conveyances and imposition of penalties. Section 111(d) of the Act provides that any goods which are imported or attempted to be imported or are brought within Indian Custom Waters for the purpose of being imported, contrary to any prohibition imposed by or under this Act or any other law for the time being in force, shall be liable for confiscation. Section 112 of the Act provides for penalties for improper importation of goods. ........... 10) It is settled law that the notification has to be read as a whole. If any of the conditions laid down in the notification is not fulfilled, the party is not entitled to the benefit of that notification. The rule regarding exemptions is that exemptions should generally be strictly interpreted but beneficial exemptions having their purpose as encouragement or promotion of certain activities should be liberally interpreted. This composite rule is not stated in any particular judgment in so many words. In fact, majority of judgements emphasize that exemptions are to be strictly interpreted while some of them insist that exemptions in fiscal Statutes are to be liberally interpreted giving an apparent impression that they are c....
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.... Judge held that while considering the prayer for provisional release, the following factors have been considered, viz., (i) whether the goods are prohibited goods; (ii) whether the goods require specific licence; and (iii) whether the goods are contraband, held that, if these three factors are not available, in a case, which comes up for consideration, then, this court has to safeguard the interest of the revenue and the interest of the importer can be considered by imposing conditions. On the facts and circumstances of the instant case before us to consider the prayer for provisional release of gold, Clauses (1) and (3) of the Conditions, stated supra, require consideration. 73. In City Office Equipments v. Commissioner of Customs (Seaport-Import), Chennai-I reported in 2015 (316) ELT 199 (Mad.), a Writ of Mandamus was sought for, directing the respondents therein to assess and permit the clearance of 129 packages of the so called second hand Digital Multifunction Print and Copying Machines, forming the subject matter of the Bill of Entry dated 26.5.2014, upon payment of applicable duties of customs. Insofar as the second hand goods are concerned, Paragraph 2.17 of the Foreign....
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....to or exported outside India, is spelt out in Chapter XIV. Section 111, which makes certain goods liable for confiscation, states that any prohibited goods brought into any bay or any goods which are imported contrary to any prohibition imposed or under the Customs Act, 1962 or any other law for the time being in force, are liable for confiscation. Under Section 112, the person guilty of improper importation of goods is also made liable for a penalty. But before confiscation, an adjudication is to take place in terms of the procedure prescribed under Section 122A." 74. No sooner goods are brought from outside, into the territorial waters of the country, they become imported goods. At this juncture, it has to be seen, as to whether, such goods are legally or illegally imported, whether they fall within Section 11 of the Customs Act, 1962, which defines, an illegal import as, import of any goods in contravention of the provisions of the Customs Act, 1962 or any other law for the time being in force. Goods imported, contrary to the enumerated subject matters in chapters IV and IV-A of the Customs Act, 1962, which deal with prohibition on importation and exportation goods and detect....
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....quarely fall within the definition of Prohibited goods , under Section 2(33) of the Act. 78. The expression, subject to the prohibition under the Customs Act, 1962 or any other law for the time being in force, in Section 2(33) of the Customs Act, has to be read and understood, in the light of what is stated in the entirety of the Act and other laws. Production of legal and valid documents for import, along with payment of duty, determined on the goods imported, are certainly conditions to be satisfied by an importer. If the conditions for import are not complied with, then such goods, cannot be permitted to be imported and thus, to be treated as prohibited from being imported. 79. In Om Prakash Bhatia v. Commissioner of Customs, Delhi reported in 2003 (155) ELT 423 (SC), the Hon'ble Apex Court held that if there is intentional over-invoicing of the goods imported, then such goods imported, fall under the category, prohibited goods , as per Section 2(33) of the Customs Act, 1962. Smuggling under the Customs Act, 1962, in relation to any goods, means any act or omission which will render such goods liable to confiscation, under section 111 or section 113 of the Act and ther....
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....e are prima facie material to arrive at the conclusion that gold has been smuggled into the country by the method, stated in the foregoing paragraphs and thus, the goods seized are liable for confiscation under Section 125 of the Act, for which, notices have been issued to 19 persons, including the appellant. 83. On the contention of the learned counsel for the appellant that though the appellant had co-operated in the adjudication proceedings, by filing a reply and also appeared in person, the adjudication proceedings had been stayed, at the instance of one of the noticees and in the said circumstances, gold should not be under the custody of the respondents endlessly, and therefore, provisional release to be ordered, this Court is not inclined to accept the said contention. 84. Reading of Sections 110(1A) and 110A of the Act, also makes it clear that the language employed by the Legislature is only, may . Few decisions on the aspect of usage of words, shall or may , in the context, in which, such words appear in an enactment, are reproduced hereunder: (i) In P.T.Rajan v. T.P.M.Sahir reported in 2003 (8) SCC 498, the following conclusions are relevant, "45. A sta....
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....d to be imported into the country. If such narrow construction and meaning have to be given, then the object of the Customs Act, 1962, would be defeated. 88. Provisions in the Customs Act, 1962, dealing with prohibition/restriction or any other law for the time in force, have to be read into Section 2(33) of the Act. Section 11A of the Act, as to what is illegal import , cannot be thrown to winds, while interpreting, what is prohibited goods , in terms of Section 2(33) of the Customs Act, 1962. To add, while interpreting Section 2(33) of the Customs Act, 1962, as to what is prohibition, imposed in other laws, for the time being in force, one cannot ignore, the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974, rules framed by way of delegated legislation, like the Baggage Rules, 1998, framed in exercise of the powers conferred under Section 79 of the Customs Act, 1962 or for the matter, Section 77 of the Customs Act, 1962, which mandates, the owner of the baggage for the purpose of clearing the goods, to make a declaration of the contents of the baggage to the proper office and also the customs Notification No.3/2012, dated 16.01.2012, that only p....
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.... to exercise his discretion, satisfying principles of fairness, reasonableness and whether, it is in accordance with the objects sought to be achieved. At the time of provisional release, it is also to be seen as to whether subjective satisfaction is based on valid materials, and not on whims and fancies of the authority. 93. Keeping in mind, the objects and purpose for which, Customs Act, 1962, is enacted, dealing with prohibition/restriction, this Court is of the considered view that the competent authority, has to arrive at a satisfaction, as to whether, goods seized and liable for confiscation, can be released provisionally, pending adjudication, and in that context, the role of the Courts, in exercise of the powers, under Article 226 of the Constitution of India, should be confined only to test such satisfaction, arrived at, by the competent authority, with regard to the objects of the Customs Act, 1962 and any other law for the time being in force. When the competent authority, under the Customs Act, 1962, makes a plea that there is a prima facie case of smuggling and that the appellant has failed to discharge the burden, in terms of Section 123 of the Customs Act and when....