AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (2) TMI 678
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....al Unit had specific intelligence that some of the passengers arriving by the said flight were smuggling foreign origin/marked gold bars/cut gold bars/jewellery and the same was meant to be handed over to unknown persons outside the airport, thereby clearing the gold of foreign origin without declaring and paying Customs Duty. Pursuant thereto, the Officers of DRI -CZU identified the passengers and followed them discreetly. The petitioner and six other passengers were intercepted in the presence of independent witnesses. While it is submitted by the Revenue that they were intercepted at/about the Green Channel, it is the case of the assessee that they were intercepted at the Airway Bridge. ii) There was also intelligence that some of the passengers had abandoned the Gold inside the Aircraft while dis-embarking. In view of the above intelligence the entire flight was rummaged and six packets containing gold which were covered with black adhesive tapes were found/ recovered. The seven passengers including the petitioner were escorted to the Air Intelligence Unit at Customs Arrival Hall and on enquiry it is stated that all the seven passengers including the petitioner accepted carry....
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....ld from Gold Aachari in Singapore and the same was brought to India for her personal and family use. It was submitted that she had also expressed her willingness to pay the Customs Duty to the officers, which was refused. (c). The gold which was seized were gold jewellery which was owned by the petitioner at the time of her interception and they were of 22 Carat purity and not 24 Carat purity as found/reported by the Appraiser. (d). It was also submitted relying upon the statement that a reading of the same would reveal that the petitioner had in fact declared that she had brought gold and thus the case of non-declaration was unfounded and contrary to facts. (e). It was further submitted that gold was not prohibited, mere non-declaration of the gold by itself would not render the same as being prohibited and thus invoking Section 111 (d) of the Act was clearly unjustified. (f). It was further submitted that in terms of Section 125 of the Act, the Authority ought to, grant the option of paying fine in lieu of confiscation in the case of goods other than prohibited gold, while in the case of prohibited goods the Officer may extend the above option exercising its discretion. I....
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.... the Act. The order also imposed penalty of Rs.7,20,000/- under Section 112 (a) & (b) of the Act. 6. Aggrieved by the same the petitioner filed an appeal before the 2nd Respondent in Order in Appeal.No.69/2018-(Try) Cus, inter alia raising the following grounds:- (a). That gold is not a prohibited item and thus the petitioner ought to have been extended the benefit of the option of paying fine in lieu of confiscation under Section 125 of the Act. That the Adjudicating Authority failed to appreciate the distinction between prohibition and restriction and distinguished the Judgment in Om Prakash Bhatia. (b). That she was intercepted at the Airway Bridge and not at the Green Channel as alleged by the Respondents and submitted that the point of interception is crucial. (c). That she had declared the gold to the Officers and the Respondents erred in assuming non-declaration of gold. (d). That in similar cases, the Commissioner of Customs Appeal had rejected the case filed by the Revenue and reliance was placed on the above to suggest that the department must be consistent. Reliance was also placed on the order of the revisional authority in similar circumstances wherein reexpor....
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....he appellant. However, I am inclined to reduce the penalty imposed by the LAA to Rs. 3,50,000/-, in the interest of justice. 9. In view of the above, I pass the following order." 8. The matter was carried by way of the revision to the Central Government under Section 129 (D) of the Act, reiterating the grounds raised before the First appellate authority. The 1st Respondent affirmed the orders of the lower authorities stating that the appellant had admitted to being a part of a smuggling plan and the submission/assertion that she has purchased the gold was only an afterthought. It was found that from the facts it was evident that the petitioner had no intent of declaring the gold and intended to evade the payment of Customs duty. The relevant portions of the First appellate order is extracted below:- "7. The Government has gone through the case records it observed that the seizure in this case was on the basis of specific intelligence of the Officers of DRI. The rummaging of the aircraft has resulted in the recovery six packets of gold in primary form totally weighing 1047.9 grams, examination of each the 6 Applicants resulted in the recovery of 1791.8 grams of gold in primary ....
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....grant the above option. There is no reason set out by both the 1st and the 2nd Respondents for refusal to exercise of discretion of granting the option to the petitioner. The orders of the 1st and the 2nd Respondents do not even deal with the petitioner's contention that under similar circumstances the option under Section 125 of the Act has been extended/granted by various authorities/ bodies/courts i.e., Commissioner Appeals, Tribunals as well as High Courts, non-application of mind to the above aspect would vitiate the entire proceedings for failure to take into account relevant factors. 10. To the contrary, it was submitted by the learned counsel for the Respondents by relying upon the counter and the written submissions and the typed set of papers filed, that the orders of the Respondents do not warrant interference as the appellate authorities have considered the grounds raised by the petitioner and emphasis was also placed on the fact that the petitioner had in her statement under Section 108 of the Act admitted and has chosen to come up with a different version after a lapse of six months vide letter dated 02.03.2017. That any import of gold against the regulations/conditi....
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....ason". The discretion has to be exercised in conformity with the purpose for which it has been conferred and the object which it seeks to achieve. Reasons must be recorded in support of it. In the exercise of discretion, non-consideration or non-application of the mind to the relevant factors would not only render the exercise manifestly erroneous, but would also warrant judicial interference. The power to give an option to the importer to redeem the prohibited goods upon payment of fine is a power coupled with the duty and in any event it should be exercised fairly and reasonably and not arbitrarily and capriciously, there must be at least an application of mind to the discretion in terms of Section 125 of the Act. 14. On a reading of the orders of the 1st and 2nd Respondents, it appears to me that there is non-application of mind to the discretion that ought to be exercised even assuming that the imported gold have to be treated as prohibited goods. 15. Secondly, I find that there is no reference whatsoever to any of orders which according to the petitioner was passed by the Respondents herein under similar circumstances wherein the benefit of the option under Section 125 of th....