TaxTMI 
TaxTMI 
2023 (3) TMI 900
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....e to be decided herein is whether the learned Chief Commissioner is justified in rejecting the application for compounding of offence as not maintainable in terms of proviso to Section 137(3) of the Customs Act, 1962 by resorting to the definition of 'prohibited goods' as prescribed under Section 2(33) ibid? 3. The facts leading to the filing of the instant appeal are stated in brief as follows. According to Directorate of Revenue Intelligence, Mumbai (hereinafter referred to as 'DRI') three consignments of Air conditions, imported in the name of M/s. Anmol Trading, M/s. Vinayak Enterprises & Royal Trading, were examined by the officers of DRI, Mumbai on 29th & 30th December, 2017 at JNPT and a total of 57 kgs. gold bars concealed in the....
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....in abeyance till the appellant has paid the duty, fine and penalty as determined by the department which the appellant undertook to pay. 5. The learned Chief Commissioner vide impugned order dated 8.1.2019 rejected the application filed by the appellant for Compounding of Offence by referring to sub-clause (ii) of clause (c) of proviso to Section 137(3) ibid and concluded that the offence in respect of which the compounding application has been made involves smuggling of goods that answer the description of 'prohibited goods' in terms of provisions of the Customs Act thereby rendering the application for compounding not maintainable in terms of the aforesaid provision i.e. subclause (ii) of clause (c) of proviso to Section 137(3) ibid. ....
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....the matter of Bhargav B. Patel vs. Commr. of Customs; 2015(9) TMI 1197- CESTAT; in which in the context of Section 125 of the Customs Act, it has been held that u/s. 125 ibid unless the importation or exportation of goods is expressly 'prohibited', the adjudicating authority is obliged to offer to the owner of the goods an option to pay fine in lieu of confiscation. Per contra learned Authorised Representative appearing on behalf of Revenue supported the findings recorded in the impugned order and submits that any goods, imported in violation of the conditions imposed for their import, attract the mis-chief of the definition of 'prohibited goods' as mentioned in Section 2(33) ibid and has to be treated as such. In support of his submission ....
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....involved in smuggling of goods falling under any of the following, namely :- (ii) goods which are specified as prohibited items for import and export in the ITC (HS) Classification of Export and Import Items of the Foreign Trade Policy, as amended from time to time, issued under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992);" 8. For compounding the offence under Customs Act, 1962 an application to that effect has been filed by the appellant u/s. 137 ibid, sub-section (3) whereof specifically provides that any offence under this Chapter may, either before or after the institution of prosecution, be compounded by the Principal Chief Commissioner of Customs or Chief Commissioner of Customs on pa....
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....tion is maintainable. According to me, learned Chief Commissioner has misdirected himself by looking into the definition of 'prohibited goods' as prescribed u/s. 2(33) of Customs Act, 1962 because Section 137(3)(ii) ibid only talks about prohibit items and specifically mentioned that it has no application if the goods involved are prohibited items for import and export in the ITC (HS) Classification of Export and Import Items of the Foreign Trade Policy. A perusal of the list of prohibited items for import & export in India nowhere mentions gold or gold bar. For the applicability or otherwise of section 137 ibid one has to look only into the list of prohibited items and the word 'prohibited goods', as has been relied upon by the learned Chi....
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....olved herein becomes prohibited goods by importing in violation of the conditions imposed for their import, therefore the application is not maintainable which, in my considered view, is totally contrary to the legal position and the language of the statute. The Hon'ble High Court of Judicature at Bombay in the matter of Imran Latif Shirgawkar vs. DRI, Mumbai; 2019(368) ELT 1052 (Bom.) has held that there is no bar on filing an application for compounding before issuance of show cause notice or adjudication thereof as contemplated in the Act. Therefore this ground is also not available to the authority below for not entertaining the application filed by the appellant for compounding and in my view there is no bar in filing or considering th....