AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2022 (2) TMI 1081
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....ency. Upon finding the movement of the petitioner suspicious the customs officers posted at airport kept a vigil and in presence of panchas carried thorough search of his handbag upon which it was found that in his cover for glasses in two plastic bags he was carrying 6 and 4 gold biscuits of 10 tolas each. It was further found that he was carrying 60 more such gold biscuits of 10 tolas each in plastic bags covered by canon camera case. He was also carrying foreign currency in UAE Dirham valued at Rs. 16,02,232/-. The punchnama was drawn on 23.09.2012 which records all these details and further records that the passenger had submitted a declaration form to the custom authorities in which he had not made a declaration of any of these goods. 3. Based on these facts a show-cause notice came to be issued to the petitioner why the seized articles i.e. gold and currency should not be confiscated and fine should not be imposed upon him in terms of the provisions of the Customs Act, 1962. The adjudicating authority after giving opportunity of hearing to the petitioner passed an order dated 11.12.2013. In this order he made absolute confiscation of 70 gold biscuits weighing 8164.800 gms va....
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.... to the conclusion that petitioner had made a clear attempt of smuggling gold biscuits to evade payment of duty. As noted, as per the punchnama the petitioner had made a declaration to the customs officer however in which there was no indication of him carrying sizable quantity of gold. It was only when customs officer carried out a thorough search of his handbag that several gold biscuits were found concealed in spectacle case and camera case. These findings are thus supported by material on record. In writ jurisdiction the High Court would not interfere with findings of facts unless it is shown that the findings are perverse. 9. Proceeding on such basis, we may examine the legal position. Section 2(33) of the Customs Act defines the term 'prohibited goods' as to mean 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 would 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. No notification issued by the Government of India is produced or brought to our notice which either prohibits import....
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....ta Vs. Union of India and Ors. decided on 22.01.2018 reported in 2018(361) ELT 260 (Guj.) It was a case in which petitioner a Non Resident Indian had made imports declaring it to be zinc ingots. The cargo arrived at Mundra port. The customs department intercepted the cargo and on further search found that there was systematic attempt to smuggle gold concealed in such ingots. It was argued that the import of gold was not prohibited. It was not even restricted merely because an attempt to smuggle the gold was made the import of gold per se would not become prohibited. It was therefore contended that maximum penalty that could be imposed in terms of clause (2) of Section 112 was 10% of the duty sought to be evaded. This contention was negatived by the Division Bench making following observations:- "15. We may recall, the contention of the counsel for the petitioner in this respect was that the gold at the relevant time was freely importable. Import of gold was not prohibited. Case of the petitioner would therefore, fall under second clause of section 112 and penalty not exceeding 10% of the duty sought to be evaded would be the maximum penalty imposable. Such contention shall have t....
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....not been paid. We refer to this definition since section 112 makes the distinction in respect of goods in respect of which any prohibition is imposed and dutiable goods other than prohibited goods. When clause (ii) of section 112 therefore, refers to dutiable goods other than prohibited goods, it shall necessarily have the reference to the goods, import of which is not prohibited or of which import is permissible subject to fulfillment of conditions and such conditions have been complied with. Condition of declaration of dutiable goods, their assessment and payment of customs duties and other charges is a fundamental and essential condition for import of dutiable goods within the country. Attempt to smuggle the goods would breach all these conditions. When clearly the goods are sought to be brought within the territory of India concealed in some other goods which may be carrying no duty or lesser duty, there is clear breach of conditions of import of goods though per se import of goods may not be prohibited. 17. In an elaborate judgment, Division Bench of Madras High Court in case of Malabar Diamond Gallery Ltd. (supra) has taken such a view. Interpretation of section 112 of the....
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.... would be defeated. Going through the notifications, we are of the view that the abovesaid notifications do not confer any absolute right to the appellant, to seek for provisional release of gold, alleged to have been smuggled. At this juncture, it is relevant to extract Paragraphs 41 and 42 in the show cause notice, dated 16.09.2013, issued by the Directorate of Revenue Intelligence, as to how, the gold came to be seized and liable for confiscation...... " It was thus held that the authorities below were therefore justified in invoking powers under Section 111 and 112 of the Customs Act. 14. Having said that, there are two areas in which we find that revisional authority has committed an error. First is of enhancing personal penalty under Section 112 of the Customs Act to Rs. 40 lacs. We may recall that the adjudicating authority had imposed penalty under Section 112 of the Act which was reduced to Rs. 5 lacs by the Commissioner of Appeals. In a revision petition filed by the Government of India the revisional authority could have restored the order of adjudicating authority but could not have enhanced the penalty over and above what was imposed by the adjudicating authority wi....
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....h shall not be imported free of duty. Hence gold in the form other than ornaments is entitled to be imported on payment of duty. Attempt to import gold unauthorisedly will thus come under the second part of Section 125(1) of the Act where the adjudging officer is under mandatory duty to give option to the person found guilty to pay (fine) in lieu of confiscation. Section 125 of the Act leaves option to the officer to grant the benefit or not so far as goods whose import is prohibited but no such option is available in respect of goods which can be imported, but because of the method of importation adopted, become liable for confiscation........." 16. This view may seem incongruent with the view expressed by Gujarat High Court in case of Bhargavraj Rameshkumar Mehta (supra) which we have also followed in this judgment but flavours of Section 112 and 125 of the Customs Act are entirely different. Section 112 of the Act pertains to penalty for improper importation of goods. Section 125 on the other hand pertains to option to pay fine in lieu of confiscation. As noted sub-section (1) of Section 125 comes in two parts. Whenever confiscation of goods is authorized under the Act, as per....