TaxTMI 
TaxTMI 
TaxTMI 
2023 (8) TMI 1008
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....s. Mr. Satish Kumar, Sr. Standing Counsel for respondent no. 2 & 3 with Mr. Dhruv, Mr. Atul Mandal, Advs. Mr. Sanjay Kumar, Ms. Easha Kadiyan, Ms. Hemlata Rawat, Advs. for R-4 Mr. Akshay Amritanshu, Sr. Standing Counsel, Mr. Ashutosh Jain, Mr. Samyak Jain, Advs. For the Union of India : Mr. Dev Bhardwaj and Ms. Anubha Bhardwaj, Advs with Mr. Sachin Singh, Ms. Divyanshi Srivastava, Advs., DHARMESH SHARMA, J. 1. In our country, 'gold' has always been symbolized as a pious material embracing the powers of the divine. Perhaps no one prizes gold more than we Indians do. Such is the temptation to acquire and possess 'gold' that since it is much cheaper outside India in certain countries, people of our country travel to various foreign locations and attempt to bring 'gold' into India, albeit employing or deploying various kinds of clandestine and dubious measures, and inevitably landing up on the wrong side of the law in our country. Even foreign nationals are no exception. There is no gainsaying that bringing of 'gold' in an unauthorised or illegal manner causes a cascading effect on the economy of the country. As we shall discuss hereinafter, the customs authorities too have been de....
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....(hereinafter referred as the 'subject goods'), which as per the panchnama (P-1) was weighing 3100 grams with 995.0 purity valued at Rs. 76,44,011/-. She was detained and during investigation she in her statement recorded under Section 108 of the Act allegedly revealed that the 'subject goods' were handed over to her by a family friend, namely Deepak Bajaj, vide a Gift Deed, and to substantiate the same she provided a document dated 30.06.2015 (P-3). A Show Cause Notice dated 18 December 2015 was issued by the Additional Commissioner, Office of the Commissioner of Customs, calling upon her to justify why the subject goods should not be confiscated under Section 111 of the Act and why she should not be penalized under Section 112 read with Section 114AA of the Act (Annexure P-4). Such proceedings culminated in the Additional Commissioner of Customs/Adjudicating Officer passing an order dated 16 September 2016 whereby the subject goods were ordered to be confiscated under Section 111 of the Act with a further imposition of penalty of INR Rs. 15,00,000/- under Section 112 read with Section 114 AA of the Act (P-5). 4. The petitioner preferred an appeal (P-6) and the Commissioner of Cus....
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....sional Authority/ Additional Secretary, Government of India passed the impugned order dated 09 July 2021 thereby sustaining the original order dated 15 November 2017 (P-7) upholding confiscation of the 'subject goods' and declining its redemption. W.P. (C) No. 13131/2022 (Sudha Murthy v. Jt. Commissioner of Customs, IGI Airport, T-3, Delhi 6. The petitioner left for Canada on 07 December 2019 to join her daughters and arrived back in India having landing at T-3 IGI Airport from Toronto by Air India Flight AI-188 on 29 September 2020; and on search, was found to be carrying 420 grams of assorted gold jewellery. She claimed that she had originally bought the items in India, much before her departure and was carrying the same back to India and for that reason she proceeded to walk through the 'Green Channel' but was detained vide memo dated 30 September 2020 (A4). To cut a long story short, the subject goods, which were sealed vide detention memo dated 30 September 2020 were opened at CWC Warehouse on 07 October 2020 in her presence and the value of the gold items was assessed by the Jeweler Appraiser. It is, however, also borne out from the record that during the proceedings the pe....
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....rding the flight and while he was at the Aerobridge, Custom Officers approached him and made enquires, to which he truthfully replied acknowledging that he was carrying 2000 grams of gold and wanted to declare the same but was instead forced to sign multiple documents on the pretext that he would be released alongwith the 'subject goods', after such proceedings. 9. The grievance of the petitioner is that a Show Cause Notice dated 23 February 2015 was issued against him, and in order to show his bona fides he filed an application on the advice of his counsel on 03 June 2015 before the Settlement Commission, after depositing the amount of Rs. 18,47,202/- for the subject goods, which were valued to Rs. 51,24,000/- vide TR-6 challan (P-4). The said application was dismissed by the Settlement Commission vide order dated 21.06.2016 holding that such application was not maintainable under the third proviso to Section 127(B)(1) of the Act and the matter was automatically reverted to the Adjudicating Officer, and the latter on 30 March 2016 passed an order directing confiscation of the two gold bars weighing 2000 grams under Section 111(d), 111(i), 111(j), 111(i) and 111(m) of the Act also....
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....impugned order dated 14 July 2021 was dismissed (P-1), as per which the request for release of goods on payment of redemption fine under Section 125 of the Act was also rejected. The fines and penalties imposed were also found to be fair and just. COMMON CHALLENGE IN THE WRIT PETITIONS: 11. In a nutshell, the impugned orders passed by the respective Adjudicating Officers in the aforesaid five Writ Petitions whereby the subject goods have been confiscated and redemption has been disallowed apart from visiting each one of them with the levy of duty/fine, have been assailed on almost identical grounds in each of the Writ Petitions primarily to the effect that the authorities concerned failed to exercise the powers vested under Section 125 of the Act in a fair, reasonable and rational manner; and that the respective Adjudicating officers arbitrarily took extraneous factors into consideration while dismissing the application for release/redemption; and that there is 'patent unfairness' and 'lack of uniformity' in their decision making in as much as release/redemption of the subject goods have been allowed in other related cases having similar circumstances. It is further their grievan....
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....oms (1999) 9 SC 175; and Union of India v. Raj Grow Impex 2021 SCC Online SC 429. ARGUMENTS ADVANCED ON BEHALF OF THE PETITIONERS: 13. Mr. Sholab Arora, learned counsel for the petitioners vehemently urged that the authorities concerned while passing the impugned orders had completely overlooked the fact that release/redemption of the subject goods had been allowed in similar circumstances in other related cases. The main plank of the submissions was that the importation of the 'subject goods' i.e. gold, is not 'prohibited' under the scheme of the Act or any other analogous statute; and that being the legal position, the Adjudicating Authority had no discretion but to allow the release/redemption of the subject goods. Firstly, in reference to Writ Petition (C) 8902/2021, it was pointed out that on the same day i.e. 01 July 2015 another passenger Ms. Ridhima Bajaj had flown in from Dubai to New Delhi and was found in possession of two gold bars and three gold cut pieces weighing about 2600 grams and valued about INR 64,61,455/- and although the proceedings resulted in the Commissioner of Customs (Appeals)/ the Appellate Tribunal passing an order dated 19 February 2018 (P-7) dismis....
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....i Bhatia v. Commissioner of Customs 1999 (106) ELT 485 Tri.-Mumbai; Suresh Kumar Raisoni v. Commissioner of Customs 2004 SCC OnLine CESTAT 1116; Union of India v. Dhanak M. Ramji 2009 SCC OnLine Bom 2270; Commissioner of Customs v. Ashwini Kumar 2020 SCC OnLine CESTAT 333; Rajaram Bohra v. Union of India 2015 SCC OnLine Cal 6049, Commissioner of Customs (Air) v. P.Sinnasamy 2016 SCC OnLine Mad 22055; Gordhanbhai N. Patel v. Commissioner of Customs 1999 SCC OnLine CEGAT 359; Kader Mydeen v. Commissioner of Customs 2000 SCC OnLine CEGAT 1662, K. Baluchamy v. Commissioner of Customs 2007 SCC OnLine CESTAT 1873; Yakub Ibrahim Yusuf v. Commissioner of Customs [MANU/CM/0425/2010]; Vijay Kumar Chaudhery v. Commissioner of Customs 2015 SCC OnLine CESTAT 2000; Rex Printing Press v. Commissioner of Customs 2004 SCC OnLine CESTAT 553; Sai International v. Commissioner of Customs[MANU/CB/0059/2017]; FL Smidth Pvt. Ltd. v. Asst. Commissioner [MANU/TN/0970/2021]. Further, reliance was placed on the decision in the case of Commissioner of Customs v. Atul Automation (P) Ltd. (2019) 3 SCC 539. 16. At this juncture, it must be indicated that having regard to issues raised in the Writ Petition that ....
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....as brought out in the decisions of Commissioner v. Suresh Jhunjhunwala 2006 (203) E.L.T. 353 (S.C.); CC, New Customs House Mumbai v. Vishal Exports Overseas Ltd. 2007 (209) ELT 331 (SC), Gurcharan Singh v. DRI 2008 (224) ELT 497 (SC). 19. Mr. Gulati, learned senior counsel then invited our attention to various notifications issued by the Central Government Notification No. 1/34 dated 18.01.1964 and various departments viz., DGFT Notification No. 29/(RE-2004)/2002-2007 dated 28.01.2004; No. 45/2015-2020 dated 30.11.2018; No. 36/2015-2020 dated 18.12.2019; No. 49/2015-2020 dated 05.01.2022; DGFT Policy Circular No. 32/(RE-2004)/2002-2007 dated 16.04.2004; & No. 39 dated 19.08.2011, RBI Circular No. 107 dated 04.06.2013; No. 103 dated 13.05.2013; No. 15 dated 22.07.2013; No. 25 dated 14.08.2013; No. 82 dated 31.12.2013; No. 103 dated 14.02.2014; & No. 133 dated 21.05.2014 and Customs Notification No. 12/2012-Cus. dated 17.03.2012 from time to time besides referring to Chapter 71 of the ITC (HS) canvassing that import of gold had always been categorized as 'free goods' i.e., freely importable subject to the various RBI Regulations, and it was emphasized that there has never been impos....
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....ect to such conditions as may be specified Section 2(33) applies to the goods prohibited absolutely or subject to conditions stipulated under Section 11 of the Act and also to import or export of goods subject to any prohibition under the Act or any other law for the time being in force. The expression "prohibited goods" is much broader and wider and is not confined merely to goods import and export of which is prohibited absolutely or subject to conditions by a notification issued under Section 11(1). In fact, the said aspect is no longer res integra, in view of the decisions of the Supreme Court in Sheikh Mohd. Omer v. Collector of Customs, Calcutta & Ors. - (1970) 2 SCC 728 = 1983 (13) E.L.T. 1439 (S.C.), Toolsidass Jewraj v. Addl. Collector of Customs - (1991) 2 SCC 443 = 1991 (53) E.L.T. 578 (S.C.) and Om Prakash Bhatia v. Commissioner of Customs, Delhi- (2003) 6 SCC 161 = 2003 (155) E.L.T. 423 (S.C.) As the first two decisions have been considered in the Om Prakash Bhatia's case (supra), we are referring to the facts of the said case. In the said case, the appellant engaged in export of garments and had substantially over invoiced the export consignment..... 19. In view....
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....port or export except under an importer-exporter code number granted by the Director General or the officer authorised by the Director General in that behalf and in accordance with the procedure specified. The rules also clearly prescribe the procedure under how the import or export is to be carried out by preparation of a Bill of Entry." 22. In the end, learned Senior Advocate referred to certain observations in the cited cases viz., in Sheikh Mohd. Omar v. Customs (supra), Om Prakash Bhatia v. Commissioner of Customs (supra), Garg Woolen Mills v. Customs (supra) and Union of India v. Raj Grow Impex (supra), and distinguishing such decision it was strenuously urged that import of gold in excess of Baggage Rules under the Customs Act was not prohibited but only restricted; and that the same can be brought or imported into India subject to fulfillment of certain conditions, and thus, it was urged that under section 125 of the Act the Adjudicating Authority has no option but to exercise the option of release/redemption of the 'subject goods' on payment of penalty and the exercise of power to confiscate the goods in entirety with penalty is arbitrary, harsh and not constitutionally p....
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....LT 300 (Ker.). 24. Mr. Satish Kumar, learned Senior Standing Counsel for the respondent/Customs by all means echoed the line of submissions advanced by Ms. Bhatnagar and additionally referred to the decision in the case of Commissioner of Customs (AIR) v. Samynathan Murugesan & CESTAT 2009 (4) TMI 77 - Madras High Court reciting the relevant paragraphs about legislative intent behind the promulgation of Section 125 of the Act. In this regard, it was vehemently urged that smuggling of gold by itself is a prohibited act and a conjoint reading of Section 2 (25) 11, 111 and 112 of the Act would amply demonstrate the intention of the Legislature in prohibiting 'smuggling' which has larger ramifications for the entire economy of the country, and thus, the discretionary part under Section 125 of the Act is not attracted in the case of smuggling of goods. 25. Suffice to state that Mr. Akshay Amritanshu, learned counsel for the respondent in W.P.(C) 13131/2022 also towed the same line of arguments in canvassing the plea that import of gold in the nature of smuggling was per se prohibited within the meaning of Section 125 of the Act. DECISION 26. We have given our thoughtful consideratio....
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....ding himself out to be the importer; *** 29. Chapter V of the Act provides provisions for levy of, and exemption, from customs duty besides refund of duty paid including the interest thereupon as also period of limitation for processing the claims. Chapter VA of the Act incorporating Section 28 (c) (d) provides for amount of duty in the price of goods, etc., for purpose of refund; while Chapter VAA provides for administration of rules of origin under trade agreement. Section 28E in Chapter VB of the Act provides for Advance Rulings meaning thereby a written decision on any question referred to in Section 28H by the applicant in his application in respect of goods prior to importation or exportation and a detailed mechanism in the nature of appeal and powers of Appellate Authority in respect thereof. Chapter VI in the Act lays down provisions relating to conveyance that is, carrying of imported and exported goods. It is pertinent to mention that Section 47 of the Act enables clearance of goods for human consumption provided the same are not prohibited goods and the importer has paid import duty, if any, assessed thereupon. Chapter VII of the Act provides for payment through elect....
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....if goods are brought into India, meaning thereby into the territory of India from outside, there is import of goods and the goods become imported goods and become chargeable to duty, up to the moment they are cleared for home consumption. The word 'importer' has been defined in the Act as importer in relation to any goods at any time between their importation and the time when they are cleared for home consumption and includes any owner or any person who holds himself out to be an importer. Section 2(33) of the Customs Act, 1962 needs to be re-produced that reads as under:- (33) "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; 32. A bare perusal of Section 2(33) of the Act would show that 'prohibited goods' are defined as goods, the import or export of which is prohibited by virtue of any prohibition under the Act or any other law for the time being in force. Though at first blush there appears to be a deviation ....
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....eements or convention with any country; (s) the compliance of imported goods with any laws which are applicable to similar goods produced or manufactured in India; (t) the prevention of dissemination of documents containing any matter which is likely to prejudicially affect friendly relations with any foreign State or is derogatory to national prestige; (u) the prevention of the contravention of any law for the time being in force; and (v) any other purpose conducive to the interests of the general public. (3) Any prohibition or restriction or obligation relating to import and export of any goods or class of goods or clearance thereof provided in any other law for the time being in force, or any rule or regulation made or any order or notification issued thereunder, shall be executed under the provisions of that Act only if such prohibition or restriction or obligation is notified under the provisions of this Act, subject to such exceptions, modifications or adaptations as the Central Government deems fit. 34. A meaningful perusal of Section 11 of the Act would show that the Central Government by notification may provide for goods the import or export of which is prohibi....
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....ulf, 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 Indian customs 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; (e) any dutiable or prohibited goods found concealed in any manner in any conveyance; (f) any dutiable or prohibited goods required to be mentioned under the regulations in an import manifest or import report which are not so mentioned; (g) any dutiable or prohibited goods which are unloaded form a conveyance in contravention of the provisions of section 32, other than goods inadvertently unloaded but included in the record kept under sub-section (2) of section 45; (h) any dutiable or prohibited goods unloaded or attempted to be unloaded in contravention of the provisions of section 33 or section 34; (i) any dutiable or prohibited goods found concealed in any manner in any package either before or after the unloading thereof; (j) any dutiable or prohibited goods removed or attempted to be removed from a customs area or a warehouse ....
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....in lieu of confiscation.- (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 1[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 to in sub-section (1) shall, in addition, be liable to any duty and charges payable in respect of such goods.] 38. During the course of arguments, much had been urged at the behest of the petitioners that if the importation or exportation of the goods is prohibited under this Act or any o....
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....aggage receipt issued by Customs. (ii) In case of gold in any other form, including ornaments, the eligible passenger must be asked to declare item wise inventory of the ornaments being imported. This inventory, duly signed and duly certified by the eligible passenger and assessing officer, should be attached with the baggage receipt. (iii) Wherever possible, the field officer, may, inter alia, ascertain the antecedents of such passengers, source for funding for gold as well as duty being paid in the foreign currency, person responsible for booking of tickets etc. so as to prevent the possibility of the misuse of the facility by unscrupulous elements who may hire such eligible passengers to carry gold for them. 42. The CBEC then brought the Customs Baggage Declaration Regulations, 2013 vide notification dated 10 September, 2013, whereby the customs duty-free allowance is made applicable to an individual passenger where such individual has been residing abroad for over a year bringing gold jewelry: for a gentleman upto Rs. 50,000/-and for a lady upto Rs. 1,00,000/-. 43. There came further Notification No. 520 of 2004/2014-Cus.VI dated 06 March 2014, whereby 'eligible passenger....
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....xport of goods or services or technology]: [Provided that the provisions of this sub-section shall be applicable, in case of import or export of services or technology, only when the service or technology provider is availing benefits under the foreign trade policy or is dealing with specified services or specified technologies.] (3) All goods to which any Order under sub-section (2) applies shall be deemed to be goods the import or export of which has been prohibited under section 11 of the Customs Act, 1962 (52 of 1962) and all the provisions of that Act shall have effect accordingly. [(4) Without prejudice to anything contained in any other law, rule, regulation, notification or order, no permit or licence shall be necessary for import or export of any goods, nor any goods shall be prohibited for import or export except, as may be required under this Act, or rules or orders made thereunder.] 1. Continuance of existing orders.-All Orders made under the Imports and Exports (Control) Act, 1947 (18 of 1947), and in force immediately before the commencement of this Act shall, so far as they are not inconsistent with the provisions of this Act, continue to be in force and shal....
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...., that go as under: (i) DGFT Notification No. 29/(RE-2004)/2002-2007 dated 28.01.2004 issued under Section 5 of the FTDR, Act read with para 2.1 of Export & Import Policy, 2002-2007, amended the ITC (HS) classification of certain goods, including gold. As per this Notification, and gold in all its forms, falling under the Tariff Item Head 7108 and 7118 was "Free" but 'subject to RBI regulations'. (ii) DGFT Policy Circular No. 32/(RE-2004)/2002/2007 dated 16.04.2004 notified that that import of gold was made free subject to RBI regulations vide Notification No. 29 dated 28.01.2004. It also stated that the policy of duty-free imports through Nominated Agencies and 15 Nominated Banks details in Chapter-4 of the EXIM Policy and Handbook of Procedures will continue to be operational. It was further mentioned in the said Circular that as gold and silver are used as currency and are surrogate for foreign exchange, and the RBI could regulate the import of gold as per the EXIM Policy from time to time. (iii). DGFT Policy Circular No. 39 dated 19.08.2011 formulated consolidated guidelines for import of precious metals by the Nominated Agencies. Further, the said Circular clearly stipul....
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.... (for other agencies) (vi) DGFT Notification No. 49/2015-2020 Dated: 5th January, 2022, brought out amendment in import policy conditions of gold under Chapter 71 of Schedule - I (Import Policy) of ITC (HS), 2017 in exercise of powers conferred by Section 3 read with Section 5 of FT (D&R) Act, 1992, read with paragraph 1.02 and 2.01 of the Foreign Trade Policy, 2015-2020, as amended from time to time. In addition to nominated agencies as notified by RBI (in case of banks) and by DGFT, qualified jewellers as notified by International Financial Services Centres Authority (IFSCA) were permitted to import gold under specific ITC(HS) Codes through India International Bullion Exchange IFSC Ltd. (IIBX). The relevant conditions are extracted as follows: ITC (HS) Code Item Description Policy Existing Policy Revised Policy Condition 71061000 Powder Restricted Import is allowed only through nominated agencies as notified by RBI (in case of banks) and DGFT (for other agencies). No change in existing Policy Condition 71069100 Unwrought Grains Restricted Import is allowed only through nominated agencies as notified by RBI (in case of banks) and DGFT (f....
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....of Finance (Department of Revenue), CBEC permitting import of gold on consignment basis by banks for genuine needs of the exporters of gold jewellery simultaneously extended the benefit to all nominated agencies / premier / star trading houses who have been permitted by the Government of India to import gold. The said Circular was issued under Section 10 (4) read with Section 11 (i) of the FEMA. (ii). RBI Circular No. 103/2012-13/499 dated May 13, 2013 by the Foreign Exchange Department reiterated that nominated banks / agencies were permitted to import gold on loan basis. (iii). Circular No. 7 by the Exchange Control Department, RBI dated March 6, 1998 whereby certain nominated agencies had been permitted to import gold viz. MMTC, HHEC, STC, SBI and other agencies authorized by the Reserve Bank for sale of jewellery manufacturers, exporters, NRIs, holders of Special Import Licences and domestic users. There were detailed guidelines for import of gold on loan / credit basis providing for period of loan, rate of interest and quantity besides consignment basis as also outright purchase basis which were issued in terms of Section 73 (3) of the Foreign Exchange Regulations Act, 197....
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....ons issued by IFSCA and DGFT. 50. The aforesaid circulars leave no iota of doubt that the RBI has also been stepping in from time to time regulating the importation of gold. While winding up this part of the narrative, there is no gainsaying that the rate of customs duty on import of gold has been modified from time to time under Customs Tariff Act, 1975, and it is but obvious that smuggling of gold is undertaken not only to profit from the price difference in gold items as also to avoid payment of customs duty. 51. Without further ado, we have no hesitation in holding that smuggling of gold is per se restricted by virtue of Section 111 as also in terms of various notifications issued under the FTDR Act and under the RBI Act discussed herein above. The aforesaid discussion raises a strong disposition to the effect that the importation of gold into India is highly regulated and bulk importation of gold item could only be affected by the nominated banks, agencies or business houses in the manner laid down by various DGFT regulations as well as the RBI circulars or by the "eligible passengers" in the manner provided by the relevant Regulations discussed hereinabove. There is no gain....
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....e quickly and easily, renders it also susceptible to be used in funding terrorism." 53. It would further be relevant to refer to the report by the Indian Gold Policy Centre (IGPL)7 that reads as under: "It is estimated that up to one-fourth of the total volume of gold entering India arrives here through illicit trade. India imports around 800-900 tonnes of gold every year while the annual consumption is around 1,000 tonnes. This suggests that up to 200 tonnes of gold is being smuggled into the country. This illicit trade represented over $1 billion in value and at least $20 million in lost tax revenue to governments. The World Gold Council (WGC) estimates 65-75% of smuggled gold comes by air, 20-25% by sea, and 5-10% by land. One important factor that encourages the smuggler is the customs duty levied on the gold import. History shows that there is a considerable percent increase in the customs duty. PR Somasundaram, Managing Director for the region at the WGC said that the propensity to smuggle now is very high because every time you increase the tax rate, you give that much more incentive to smugglers. As per the present market value of gold in India, 1 kg of the smuggled yell....
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....e true sale consideration. Examining the scope and ambit of section 2(33) read with section 11 & 113 of the Act, it was observed as under: 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 he 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 g....
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....ported MFDs without requisite permission viz., Multi-Function Device, Digital Photocopiers and Printers, which incidentally were also classified as 'other wastes' under Rule 3 (1) (23) of the Hazardous Waste Management Rules, and the goods were confiscated with penalty imposed, declining relief of release/redemption. The challenge was upheld observing that: - "8. Unfortunately, both the Commissioner and the Tribunal did not advert to the provisions of the Foreign Trade Act. The High Court dealing with the same has aptly noticed that Sections 11(8) and (9) read with Rule 17(2) of the Foreign Trade (Regulation) Rules, 1993 provide for confiscation of goods in the event of contravention of the Act, Rules or Orders but which may be released on payment of redemption charges equivalent to the market value of the goods. Section 3(3) of the Foreign Trade Act provides that any order of prohibition made under the Act shall apply mutatis mutandis as deemed to have been made under Section 11 of the Customs Act also. Section 18-A of the Foreign Trade Act reads that it is in addition to and not in derogation of other laws. Section 125 of the Customs Acts vests discretion in the authority to le....
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....e case in Atul Automations (supra) that the import was otherwise likely to affect the domestic market economy. In contrast to the case of Atul Automations, where the goods were permitted to be imported (albeit with authorisation) for the reason that they were not manufactured in the country, in the present case, the underlying feature for restricting the imports by quantum has been the availability of excessive stocks and adverse impact on the price obtainable by the farmers of the country. The decision in Atul Automations (supra), by no stretch of imagination, could be considered having any application to the present case. 155. Thus, we have no hesitation in holding that the goods in question, having been imported in contravention of the notifications dated 29.03.2019 and trade notice dated 16.04.2019; and being of import beyond the permissible quantity and without licence, are 'prohibited goods' for the purpose of the Customs Act. 156. The unnecessary and baseless arguments raised on behalf of the importers that the goods in question are of 'restricted' category, with reference to the expression 'restricted' having been used for the purpose of the notifications in question o....
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.... the exercise of discretion by the Adjudicating Authority in these matters, giving option of payment of fine in lieu of confiscation, could be approved? It is true that, ordinarily, when a statutory authority is invested with discretion, the same deserves to be left for exercise by that authority but the significant factors in the present case are that the Adjudicating Authority had exercised the discretion in a particular manner without regard to the other alternative available; and the Appellate Authority has found such exercise of discretion by the Adjudicating Authority wholly unjustified. In the given circumstances, even the course adopted in the case of Hargovind Das K. Joshi10 (of remitting the matter for consideration of omitted part of discretion) cannot be adopted in the present appeals; and it becomes inevitable that a final decision is taken herein as to how the subject goods are to be dealt with under Section 125 of the Customs Act. 176. As noticed, the exercise of discretion is a critical and solemn exercise, to be undertaken rationally and cautiously and has to be guided by law; has to be according to the rules of reason and justice; and has to be based on relevant....
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....elease was declined under Section 125 of the Act. On being challenged, the High Court allowed the redemption/release but on challenge by the department, the decision of the High Court was set aside. It was held that the goods which had been seized in the matter could not have been imported into India without a license under Import Control Act and same did not amount to imported goods within the meaning of Section 2(25) of the Act, and therefore, importation of such goods i.e., rough diamonds were prohibited by law and the respondent firm was not entitled to its redemption/release. 61. The case of Abdul Razak v. Union of India (supra) was one where an attempt was made to smuggle gold by concealing the same in emergency lights, mixie-grinders and car horns weighing about 8 kg. It was held that "although gold as such is not a prohibited item and can be imported, such import is subject to a lot of restrictions including necessity to declare the goods on arrival at the customs station and make payment of duty at the rate prescribed". It was further held that "goods brought by indulging in smuggling would amount to importation of prohibitary goods and the appellant was not entitled as a....
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....e. However, on searching her, 40 gold bars, each weighing 10 tolas were found stitched with her undergarments. The long and short of the story is that later on when the petitioner applied for release/redemption of gold items, same were ordered to be confiscated instead with heavy penalty. It was held that import policy in force at the relevant time made a distinction between 'prohibited goods' and 'restricted goods' and the gold was not a prohibited item, and thus, the Adjudicating Authority was bound to offer an option to the importer to redeem the items on payment of fine, which was not to exceed the market price of the goods less duty payable thereupon. 64. The case of Suresh Kumar Raisoni v. Commissioner of Customs (supra) CSTA Mumbai 2004, was one where on personal search of one Jabbar Singh Thakur at the premises of a party at Jhaveri Bazar, Mumbai on 19.08.1997, led to recovery of 42 foreign marked gold biscuits valued at Rs. 22,26,000/-, which were seized under the Customs Act. The proceedings led to the passing of the impugned order for confiscation of gold under Section 111(D) of the Act besides imposition of penalty under Section 112 of the Act. In a nutshell, the Court....
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....by the appellant passenger ingeniously concealing it in the stroller of the bag. It has also been indicated in this order that Government of India has consistently held the view in many cases that gold is not prohibited but restricted and allowed redemption of confiscated gold. (f) The Apex Court has also drawn a distinction between goods whose import is absolutely prohibited and those whose import is restricted under the Foreign Trade (D&R) Act and redemption was allowed in the case of restricted goods. (g) Thus, while Section 125 allows the adjudicating authority the discretion to allow or not to allow redemption of prohibited goods. As far as gold, which is smuggled, is concerned, there appears to have been a gradual change in the approach of the Government. In the case of Ashok Kumar, Government of India allowed redemption of gold that was not only NOT Declared but ingeniously concealed in strolley bags. It has also been declared in this Revision order that GOI had consistently held the view that smuggled gold can be redeemed. 65. We are unpersuaded to countenance the aforesaid conclusions for reasons which follow. The case of Rajaram Bohra v. Union of India (supra) [Calcu....
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....o not see as to how referred provision, namely, Section 19 of the Sea Customs Act is in any way analogous to Section 111 of the Act and in any case, the cited case was not about smuggling of goods but a case of mis-declaration of its value so as to seek levy of lesser customs duty. 67. The cited case of Commissioner v. Prayag Exporters Ltd. 2003 (155) ELT 4 (SC) also has no application since it was a case where the goods in question were not prohibited for export and at the same time there was no provision for levy of export duty on the consignment. The decision in the case of Commissioner v. Suresh Jhunjhunwala (supra) was also one where the export consignment was held to be a case of over invoicing and the issue regarding redemption of goods was not considered with regard to violation of FERA. 68. The plea by the learned counsel for the appellants that RBI has never issued any circular under Section 58 of RBI Act12, 1934 regulating import of gold goes down the drain as it has been amply demonstrated that import of gold into India has been subject to various restrictions and mandatory requirements. It is no argument that restrictions to bring gold in a certain quantity falls und....
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....gory' with regard to which the mandatory condition under the Act as also in other relevant notifications/circulars issued by the DGFT, the RBI or the any other authority have not been complied with, or in other words the restrictions imposed by the concerned authorities have not been adhered to. We further have no hesitation in holding that the importation of the gold is a prohibited item within the meaning of Section 2(33) of the Act; and that redemption in case of importation of gold which is brought into India illegally in the form of "smuggling" does not entitle the owner or importer for automatic release/redemption of such item, and therefore, as a necessary corollary a decision to allow release/redemption of the goods confiscated with or without imposition of fine in addition to payment of requisite duty is vested in the discretion of the Adjudicating Officer, who needless to state is duty bound to exercise his discretionary powers not only after considering the facts and circumstances of each case before it, but also in a transparent, fair and judicious manner under Section 125 of the Act. 71. In view of the aforesaid proposition of law, we proceed to deal with each of the ....
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.... pronouncements in the case of Commissioner of Customs (AIR) Chennai-1 v. Samynathan Murugesan [2009 (247) E.L.T. (Mad.)] which was upheld by the Apex Court, as well as the decision of the High Court of Bombay in the case of Union of India v. Aijaj Ahmad - 2009 (244) ELT 49 (Bom.). The decision of the Adjudicating Authority to deny the redemption of the goods and order of absolute confiscation were ultimately upheld. Lastly, the plea that another passenger on the same day was apprehended with huge commercial quantity of gold, namely, Ridhima Bajaj but let off by the Custom Authorities in as much as release/redemption was allowed, is hardly of any legal consequence. By all means it is manifest that such decision was contrary to the law but then one bad precedent does not legally entitle the petitioner to claim similar benefit. 74. Therefore, without further ado, we have no hesitation in holding that the discretionary powers were properly exercised by the Adjudicating Authority under Section 125 of the Act in passing the order-in-original dated 16 September 2016. The plea of the petitioner that she had been gifted the gold items of such huge quantity weighing about 3100 grams was co....
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....alty without option of its release/redemption. Although, the said order was set aside in appeal by the Appellate Authority vide order dated 18 July 2018, the Revisional Authority vide the impugned order dated 09 July 2021, upheld the order-in-original and held as under:- "7.3 The original authority has correctly brought out that, in this case, the conditions subject to which gold could have been legally imported have not been fulfilled. Thus, following the ratio of the aforesaid judgments, there is no doubt that the subject goods are 'prohibited goods'. As such, the Commissioner (Appeals) has erred in holding that the impugned gold is not a prohibited item. 9. In view of the findings above, the Government holds that the Commissioner (Appeals) has proceed to allow redemption on the erroneous finding that the impugned gold bars are not a prohibited item. The Commissioner (Appeals) has also incorrectly interfered with the discretion exercised by the original authority by permitting redemption of these gold bars." 77. Finally, the Ld. Revisionary Authority, after considering the blameworthy conduct of the petitioner as well as the value of the subject goods held that she deserved....
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....f free allowance is not available to the pax." 79. In arriving at such findings, the learned Adjudicating Authority took note of Section 7 of the FTDR Act as well as Rule 3 (1) (h) of the Foreign Trade (Exemption from application of rules in certain cases) Amendment Order, 2017. It was concluded that the petitioner was not an eligible passenger and her intention was to evade payment of customs duty and it was a clear case of mis-declaration under Section 77 of the Act. It was further held as under:- "8.3 I observe that gold once confiscated can be redeemed under Section 125 of the Customs Act, 1962. In the instant case, I am not inclined to give an option to the pax for redemption of the said goods as the passenger not only violated the Green Channel but also attempted an act of theft of goods detained by the Department. The intention of the pax was not to clear the goods on payment of applicable duty, fine and penalty but to clear the goods through Green Channel without payment of duty and then to clear the same by way of theft. Hence, the instant case is fit for absolute confiscation." 80. In short, the order-in-original dated 01 January 2021 was upheld in the appeal vide ord....
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....original authority has correctly brought out that in this case, the conditions subject to which gold could have been legally imported, have not been fulfilled. Thus following the law laid down as above, there is no doubt that the subject goods are prohibited goods." 83. While denying the release/redemption of the goods, reliance was placed by the Ld. Adjudicating Authority on the decisions in Sheikh Mohd. Omer (supra), Om Prakash Bhatia (supra), M/s Raj Grow Impex (supra), Malabar Diamonds (supra), Garg Woollen Mills (supra), P. Sinnaswamy (supra), Raju Sharma (supra) and Mangalam Organics (supra). Hence, in the instant Writ Petition, we find that the decision of the learned Revisional Authority vide order dated 22 September 2021 whereby the goods weighing about 2000 grams were absolutely confiscated and penalty of Rs. 11 Lacs was imposed without an option of release or redemption does not suffer from any legal infirmity, perversity or incorrect approach in law. At the cost of repetition, the petitioner had failed to discharge the burden under Section 123 of the Act that he was the owner of the subject goods, and he had admitted his signatures on the panchnama as also statement ma....
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....l after crossing the Green Channel and the value of dutiable goods carried by her was not deliberately filled up in Indian Customs Declaration Slip and knowingly and intentionally did not make true and proper declaration before Customs officer as required under Section 77 of the Customs Act, 1962.... Hence find she is liable for penal action under Section 112 and Section 114AA of the Customs Act, 1962." 85. The above referred determination was made in keeping with various judicial pronouncements, which were held to have a bearing on the present case, viz., Sheikh Mohd. Omer (supra), Om Prakash Bhatia (supra), Jasvir Kaur [2009 (241) ELT 0521 (Tri.)], Alfred Menezes (supra) and Nine Star Exports (supra). The petitioner in the revision application assailed the aforesaid order-in-original as also in appeal on the ground that import of gold was not prohibited and should have been allowed to be released on payment of redemption fine. We have no hesitation in holding that the decision of the learned Adjudicating Authority ordering absolute confiscation of gold and imposing fine without option to the petitioner of its release/redemption suffers from no illegality. We further have no hes....
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....inition of prohibited goods and the various other provisions contained in the Act as well as the Foreign Trade (Development and Regulation) Act, 1992 [FTDR]. 89. Learned counsels appearing for the petitioners as well as Mr. Tarun Gulati, learned senior counsel and amicus, would urge that in the absence of gold having been placed in the negative list, either in terms of a notification issued under Section 11 of the Act or Section 3(2) of the FTDR, it cannot be treated as falling in the category of prohibited goods. Mr. Gulati, the learned amicus, has laid stress upon the language employed in Section 11 which speaks of a prohibition, absolute or otherwise, being recognized to exist only if a notification indicative of the said intent had been duly published in the Official Gazette as contemplated under the statute. According to the learned amicus, the aforesaid position also stands fortified upon a reading of Section 3(2) of the FTDR which too contemplates an order being passed by the Union Government prohibiting, restricting or otherwise regulating the import of goods and such an order being published in the Official Gazette. 90. The learned amicus further submitted that Section 3....
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......" 92. As would be evident from a perusal of Section 18, the Union Government stood empowered to prohibit the export of all or any goods including a class of goods specified in a notification issued in that respect, unless the exporter had furnished to the prescribed authority a declaration in terms as contemplated in that provision. Section 18 is thus structurally clearly distinct and distinguishable from the regime of prohibited goods which stands embodied in Section 2(33) of the Act. In fact, FERA did not even incorporate a defining provision for prohibited goods. 93. Reverting then to the submissions addressed by the learned amicus, we note that Sheikh Mohd. Omar was principally dealing with the provisions of Section 3 of the Imports and Exports Control Act 1947 [The 1947 Act] which employed the expressions "prohibiting, restricting or otherwise controlling". Sheikh Mohd. Omar was a decision in which an order referable to Section 3 had been duly promulgated. This is evident from paragraph 6 of the report where the Supreme Court had noticed the promulgation of the Imports (Control) Order, 1955 [The 1955 Order] in exercise of powers conferred by Section 3 of the 1947 Act. In t....
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....djudicating Officer, and the Board imposing the penalties under Section 167(8) of the Sea Customs Act are set aside. Penalties, if recovered, shall be refunded." 95. It must, however, be observed that Becker Gray was rendered in the context of Section 19 of the Sea Customs Act, 1878, and which was framed in the following words: - "19. Power to prohibit or restrict importation or exportation of goods.-The Central Government may from time to time, by notification in the Official Gazette, prohibit or restrict the bringing or taking by sea or by land goods of any specified description into or out of [India] [across any customs frontier as defined by the Central Government]." 96. Significantly, Section 19 of the Sea Customs Act, 1878 was couched in terms distinct from Section 2(33) since it specifically alluded to the power to either "prohibit or restrict". Mr. Gulati had also drawn our attention to the decision of the Tribunal in Prayag Exporters Pvt. Ltd. vs. CommissionerOrder dt. 18.08.2000, Appeal No. C/195-V/2000-Bom (CEGAT, West Zonal Bench, Mumbai) where while dealing with the validity of a confiscation order passed by the Adjudicating Authority on the basis of over-inflating....
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....y goods attempted to be exported contrary to any "prohibition" imposed by or under the Act or any other law for the time being in force. Hence, for application of the said provision, it is required to be established that attempt to export the goods was contrary to any prohibition imposed under any law for the time being in force. 9. Further, Section 2(33) of the Act defines "prohibited goods" as under: "2. (33) '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;" 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....
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....GAT)] . **** **** **** 18. However, it appears, the same Bench considered the matter at some length in Om Prakash Bhatia [(2003) 6 SCC 161 : (2003) 155 ELT 423] and opined that the exporters were obliged to declare the value of the goods. In a detailed judgment, this Court not only took into consideration the provisions of the Customs Act, but also the provisions of Section 15 of the Foreign Exchange Regulation Act and the rules framed thereunder, as also the notifications issued by the Central Government from time to time. The Court opined that for determining the export value of the goods, it is necessary to refer to the meaning of the word "value" as defined in Section 2(41) of the Act, and the same must be determined in accordance with the provision of sub-section (1) of Section 14, stating: (SCC p. 169, para 16) "16. ... Section 14 specifically provides that in case of assessing the value for the purpose of export, value is to be determined at the price at which such or like goods are ordinarily sold or offered for sale at the place of exportation in the course of international trade, where the seller and the buyer have no interest in ....
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....n illegal/irregular transactions in foreign currency." **** **** **** 21. It may be true that the said decision related to a matter concerning a drawback scheme, but a decision of this Court interpreting a different section by itself cannot, in our opinion, be brushed aside, only on the ground that the decision of the same Bench in Prayag Exporters [(2007) 12 SCC 401 : (2003) 155 ELT 4 (SC)] is applicable being related to the DEPB Scheme. The question, in our opinion, has to be considered having regard to the provisions of the definition of the "prohibited goods", "entry of goods" together with the provisions of the Foreign Exchange Regulation Act. **** **** **** 25. In view of the order proposed to be passed by us, we do not intend to enter into the factual controversy of this matter any further. The Tribunal, in our opinion, should have considered the matter from another angle, namely, as to whether the respondents have violated the provisions of the Foreign Exchange Regulation or not. As regards the finding arrived at by the Tribunal that the respondents had not overvalued the goods, inter alia, on t....
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.... for their import. The Customs Authorities therefore prima facie cannot be said to be unjustified in detaining the consignment. Merely because earlier on more than one occasion, similar consignments of the respondent or others may have been cleared by the Customs Authorities at the Calcutta, Chennai or Cochin Ports on payment of redemption fine cannot be a justification simpliciter to demand parity of treatment for the present consignment also. The defence that DGFT had declined to issue such authorisation does not appeal to the Court. 8. Unfortunately, both the Commissioner and the Tribunal did not advert to the provisions of the Foreign Trade Act. The High Court dealing with the same has aptly noticed that Sections 11(8) and (9) read with Rule 17(2) of the Foreign Trade (Regulation) Rules, 1993 provide for confiscation of goods in the event of contravention of the Act, Rules or Orders but which may be released on payment of redemption charges equivalent to the market value of the goods. Section 3(3) of the Foreign Trade Act provides that any order of prohibition made under the Act shall apply mutatis mutandis as deemed to have been made under Section 11 of the Customs Act also.....
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....ortunately, the Act does not define the expression "Restricted Goods". But the definition of the expression "Prohibited Goods" itself contains an indication as to how the expression "Restricted Goods" has to be understood. 14. A careful look at Section 2(33) would show that even prohibited goods could be permitted to be imported or exported subject to some terms and conditions. The moment those conditions are complied with, those goods would cease to be prohibited goods. This is why the exclusion clause contained in the second part of Section 2(33) uses the expression "any such goods". Therefore, it appears that the Customs Act recognizes only two types of goods namely: (1) those that are prohibited; and (2) those that are not prohibited. The Act also recognizes the fact that even prohibited goods could be imported or exported subject to certain conditions. If those conditions are fulfilled, prohibited goods would automatically become non-prohibited goods. 15. Section 11 of the Act empowers the Central Government, by Notification in the official gazette, to prohibit either absolutely or subject to such conditions to be fulfilled before or after clearance of the import or export....
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....ection 111(d) of the Customs Act includes restrictions. This Court further underscored that "any prohibition" means every prohibition; and restriction is also a type of prohibition. **** **** **** 155. Thus, we have no hesitation in holding that the goods in question, having been imported in contravention of the notifications dated 29.03.2019 and trade notice dated 16.04.2019; and being of import beyond the permissible quantity and without licence, are 'prohibited goods' for the purpose of the Customs Act. ***** **** **** 158. A bare reading of the provision aforesaid makes it evident that a clear distinction is made between 'prohibited goods' and 'other goods'. As has rightly been pointed out, the latter part of Section 125 obligates the release of confiscated goods (i.e., other than prohibited goods) against redemption fine but, the earlier part of this provision makes no such compulsion as regards the prohibited goods; and it is left to the discretion of the Adjudicating Authority that it may give an option for payment of fine in lieu of confiscation. It is innate in this provision that if the Adjudi....
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....ideration by the Adjudicating Authority, in the orders-in-original dated 28.08.2020 and by the High Court, in the impugned order dated 15.10.2020 while directing release of goods. We have already disapproved the orders so passed by the Adjudicating Authority and the High Court. Therefore, no leniency in the name of equity can be claimed by these importers. In fact, any invocation of equity in these matters is even otherwise ruled out in view of specific rejection of the claim of bona fide imports by this Court in Agricas (supra). Once this Court has reached to the conclusion that a particular action is wanting in bona fide, the perpetrator cannot claim any relief in equity in relation to the same action. Absence of bona fide in a claimant and his claim of equity remain incompatible and cannot stand together. 185. The overt suggestions on behalf of the interveners that demand and supply of pulses is dynamic and not static in nature have only been noted to be rejected. In our view, meeting with the requirements of demand and supply is essentially a matter for policy decision of the Government. No equity could be claimed with such submissions by the importers. Similarly, if, for wha....
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....ission of Mr. Gulati that the various circulars and notifications which have been alluded to by the respondents cannot be equated with the requirements placed by Section 11 of the Act or Section 3(2) of the FTDR, since those circulars cannot be recognized to be notifications issued in accordance with the procedure as contemplated in those provisions. Mr. Gulati submitted that for a restriction to legally apply, it would have been imperative for the RBI to introduce the same by way of a statutory regulation made in exercise of powers conferred by Section 58 of the Reserve Bank of India Act, 1934 [The 1934 Act]. According to the learned amicus, a circular cannot be countenanced to be a valid substitute for a notification or a regulation. 110. It was then submitted that more fundamentally, it must be borne in mind that RBI is essentially concerned with the discharge of central banking functions pertaining to payments made to and from India and regulation of monetary policy. The learned amicus submitted that the RBI does not have the jurisdiction or authority to either allow, regulate or restrict imports. For the purposes of highlighting the functions discharged by the RBI and it not ....
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....at amendments to the Foreign Trade Policy can be made by the Central Government under Section 5 of the Act or by DGFT by issuing a Notification under Para 2.07 of the Foreign Trade Policy. The change in categorization from free to restricted can be made in respect of import of goods, only by an amendment and the same cannot be done by DGFT by issuing a Circular. **** **** **** 9. Thus on the date, the gold medallions were imported i.e. 3-72017 there was no restriction and the restriction was imposed by the Central Government vide Notification dated 25-8-2017 subsequently, which has been quoted supra. In other words, there was no restriction with regard to import of gold medallion on the date the same was imported by the respondent. 10. Similarly, the gold granules were imported on 21-9-2017 and thereafter DGFT issued a Notification dated 18-12- 2019 by which import policy was amended and gold in any form was allowed only to be imported through nominated agencies as notified by the Reserve Bank of India in case of Banks and for other agencies by the DGFT. Thus, it is evident that on the date when the gold granules were imported i.e., on 21-9....
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....red the same in the following terms:- "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 clause (ii) 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 to be examined in the light of the statutory provisions noted above. As noted, Section 111 of the Act provides for various eventualities in which the goods brought from a place outside India would be liable for confiscation. As per clause (d) of Section 111, goods which are imported or attempted to be imported or are brought within the Customs quarters for import contrary to any prohibition imposed by or under the Act or any other law for the time being in force, would be liable for confiscation. Similarly, for dutiable or prohibited goods found concealed in any manner in any conveyance would also be liable to confiscation. As per Section 2(39) the term 'smuggling' would mean in relation to any goods, any act or omission which will render such goods liable to c....
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....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..................." 112. In Mohd. Haroon v. Additional Director General, DRI Judgment dt. 26.04.2021 in WP(MD) Nos. 3917 & 3918 of 2020 & WMP(MD) No. 5459 of 2021 (Mad. HC), the Madras High Court (Madurai Bench) significantly observed that while gold would not be a prohibited item of import it would fall in the category of a regulated or restricted article. Md. Haroon while following an identical view which was expressed by the Madras High Court in Malabar Diamond Gallery v. Additional Director General, DRI 2016 SCC OnLine Mad 19597 observed as under:- "7. Initially, a submission was made that since the petitioners had brought prohibited goods into India, they cannot be permitted to be re-exported. They can only be confiscated. As already pointed out, the petitioners were carrying gold as well as electronic goods. Electronic goods are obviously not prohibited items. They can be cleared after making declaration and paying the applicable customs duty. Gold is also not a prohibit....
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....of Export and Import Items 19972002:- Gold : 710812 00 Other unwrought forms." 12. The same was further amended by a Public Notice No. 54 dated 4th November, 1997 which is to the following effect :- "Attention is invited to Public Notice No. 51/(PN)/9702 dated 27th October, 1997 on the above subject. In partial modification of the above Public Notice, it is hereby notified that the imprt of gold and silver shall be permitted to the nominated and authorised agencies by the Reserve Bank of India (RBI)/Ministry of Finance. It is further notified that payment of Customs duty for import of gold and silver by such agencies without surrender of Special Import Licence (SIL) and by other importers against surrender of SIL shall also be made in Indian Rupees on payment of such Customs duties as may be notified by the Deptt. Of Revenue from time to time. This issues in public interest." 13. It is, therefore, evident that the gold could be imported only against a Special Import Licence or by the agencies authorised by the Reserve Bank of India. 14. The entire case of the writ petitioner/respondent is that they have purchased gold from Standard Chartered Bank which was meant for sale.....
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....ion of the assessable income of the assessee under the head 'Business Income'. It was rightly pointed out by the learned Solicitor General that legal fictions are created only for a definite purpose and they should be limited to the purpose for which they are created and should not be extended beyond their legitimate field. But, as indicated earlier, the fiction under Section 41(2) is created for the purpose of computation of assessable income of the assessee under the head 'Business Income' and under Section 80-E(1), in order to compute and allow the permissible special deduction, computation of total income in accordance with the other provisions of the Act is required to be done and after allowing such deduction the net assessable income chargeable to tax is to be determined; in other words, the legal fiction under Section 41(2) and the grant of special deduction in case of specified industries are so closely connected with each other that taking into account the balancing charge (i.e. deemed profits) before computing the 8% deduction under Section 80-E(1) would amount to extending the legal fiction within the limits of the purpose for which the said fiction has been created." ....
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....has held as follows:-. "7. Section 11 empowers the Central Government to prohibit either absolutely or subject to such conditions to be fulfilled before or after clearance the import or export of the goods of any specified direction by issuing a notification in this behalf. **** **** **** 8. Relevant portion of The Exemption Notification 31/2003 under Section 25 of the Customs Act reads thus : "G.S.R. (E).- In exercise of the powers conferred by subsection (1) of Section 25 of the Customs Act, 1962 (52 of 1962) and in supersession of the notification of the Government of India in the erstwhile Ministry of Finance (Department of Revenue) No. 171/94-Customs, dated the 30th September, 1994, published in the Gazette of India, vide number G.S.R. 733(E), dated the 30th September, 1994, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts goods of the description specified in column (2) of the Table below and falling under Chapter 71 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), when imported into India by an eligible passenger, from so much of the duty of customs leviable thereon which is sp....
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....part of his baggage as an eligible passenger. 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." 115. In Malabar Diamond Gallery, the Division Bench of the Madras High Court dealt with the issue which arises in some detail. The High Court was dealing with an appeal directed against the judgment of a learned Single Judge of that Court who had declined a prayer for release of gold. While answering the issue which arose, the Madras High Court observed as follows:- "41. 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 e....
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....held as follows: "The fundamental and elementary rule of construction is that the 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 legi....
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....h are important. That interpretation is best which makes the textual interpretation match the 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 co....
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....rted every part thereof for a purpose and the legislative intent is that every of the statute should 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." **** ***** ***** 70. From the decisions in Samyanathan Murugesan's case (cited supra), Abdul Razak's case (cited supra) and Brinda Enterprises's case (cited supra), it is manifestly clear that the adjudicating authorities/Courts have to consider two aspects, viz., (1) eligibility of the passengers to import the goods; and (2) whether such passengers had fulfilled the conditions of import or export, any restriction on import or export, which is also to be treated as prohibition. **** ***** ***** 78. No sooner goods are brought from outside, into the territorial waters of the country, they ....
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....the statute, dealing with prohibition/restriction, the same are to held as, "prohibited goods" and liable for confiscation. 81. As rightly contended by Mr. A.P. Srinivas, learned counsel for the respondents that under Section 123 of the Customs Act, 1962, if the importer fails to discharge the burden that the goods seized from him, were not smuggled, then there is a strong reason for the proper officer to seize such goods. Smuggling is nothing but importing goods clandestinely, without payment of duty and such goods would squarely fall within the definition of "Prohibited goods", under Section 2(33) of the Act. **** **** **** 92. 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 Excha....
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....the prayer sought for, under Section 110A of the Act, on the presumption that such rights are likely to be granted in future, under Section 125 of the Act, by the competent authority, then we would be exceeding in our jurisdiction. At the stage, when provisional release is either ordered or denied, discretion exercised by the authority, is administrative in nature. 96. Objective satisfaction, at the stage of provisional release, casts a duty on the authority, to consider, as to whether, there are prohibitions/restrictions in the Customs Act, 1962, or any other law for the time being in force and whether he is bound 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. 97. 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 seiz....
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....y act or omission which will render such goods liable to confiscation under Section 111 or Section 113; 12. Dutiable goods are goods whose import is permitted by the Act or any other law in force. Duty is the tax leviable on the goods occasioned by their import into India or their export out of India. The dutiability of the goods is covered by Section 12 of the Act which is the charging section. Under this section, all goods imported into or exported from India are liable to customs duty unless the Customs Act itself or any other law for the time being in force provides otherwise. The rate of duty is fixed by the Customs Tariff Act, 1975. "Import" and "imported goods" mean that if goods are brought into India, meaning thereby into the territory of India from outside, there is import of goods and the goods become imported goods and become chargeable to duty up to the moment they are cleared for home consumption. The word "importer" has been defined in the Act as importer 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 who holds himself out to be an importer. The word "smuggling"....
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....omy. In the light of these findings, it would be antithetical to consider that "smuggled goods" could be read within the definition of "imported goods" for the purpose of the Act. In the same light, it would be contrary to the purpose of exemption notifications to accord the benefit meant for imported goods on smuggled goods." 118. In Amba Lal, the Supreme Court significantly observed that goods which have been smuggled would not fall within the definition of "imported goods" at all. Their Lordships underlined the distinction which must be recognised to exist between imported and smuggled goods. It was in this context that learned counsels representing Customs had submitted that since all the petitioners in the present batch had attempted to smuggle in gold, the article was liable to be confiscated absolutely and no prayer for redemption was liable to be entertained. 119. It may be appropriate to observe at this juncture that a facile reading of Amba Lal would seem to suggest that smuggled goods were held to be outside the meaning of the expression imported goods as employed in the Act. This was the line which was also advocated for our consideration by learned counsels represent....
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....no question of giving an option to pay the fine in lieu of the confiscation. In this regard, the appellate authority seems to have relied on a decision of the Madras High Court in the case of Commissioner of Customs (Air) v/s. Samynathan Murugesan. In the said case, it was the Commissioner of Customs (Air), Customs House, Chennai, who was the petitioner before the High Court. The question before the High Court was, "whether in the facts and circumstances of the case, the Tribunal was right in remanding the matter with a direction to the Commissioner to invoke the power under Section 125 of the Customs Act for redemption of the goods on payment of fine ? The facts of the said case are almost identical to the facts of the case in hand. **** **** **** 51. 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....
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....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. 56. In Om Prakash Bhatia v. Commissioner of Customs, Delhi reported in 2003 (155) ELT 423 (SC), the Supreme Court held hat 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 therefore, those goods, would also fall under the definition of prohibited goods, in terms of Section 2(33) of the Customs Act, 1962. 57. If there is a fraudulent evasion of the restrictions imposed, under the Customs Act, 1962 or any other law for the time being in fo....
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....ion must necessarily be prefaced with the observation that undisputedly there is no specific notification issued either under Section 11 of the Act or Section 3(2) of the FTDR relating to the import of gold. 122. To enable us to have a broad overview of the statutory scheme which prevails, our attention was invited firstly to the Baggage Rules 2016. It may however be noted that Rules 3, 4 and 5 essentially deal with the permissible limit of gold and jewellery which may be carried or brought in by passengers arriving from different countries including foreigners. Those Rules essentially deal with the limits up to which such articles may be carried by passengers. We were further informed that subsequently the Central Board of Excise and Customs has promulgated the Customs Baggage Declarations Regulations 2013 and which embodies the Customs Declaration Form specifically requiring passengers to make an appropriate declaration with respect to gold jewellery being carried above the free allowance as well as gold bullion. The duty free allowance is also specified in those Regulations. 123. From the various Notifications and Circulars issued by the CBEC as well as the RBI, the following ....
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....ee import of gold. The said Policy Circular provided as follows:-. "2. It is hereby reiterated that the Policy of duty-free imports through the nominated agencies and 15 nominated banks detailed in Chapter 4 of the EXIM Policy and Handbook of Procedures will continue to be operational. Exporters will continue to have the option to import duty free gold and silver for exports through the nominated agencies or directly under the Advance Licensing Scheme. 3. RBI reserves the right to regulate the import of gold as laid down in Notification No. 29 dated 28.1.2004 as gold and silver are also used as currency and are surrogate for foreign exchange. All such change in the RBI regulations are deemed to be covered by the EXIM Policy in terms of the Notification No. 29 dated 28.1.2004. This issues with the approval of the DGFT." 126. From the material placed on the record it is evident that the import of gold was duly controlled at least from 1996 and envisaged to be channelised only through certain categories of nominated agencies. Those agencies were identified in a Circular dated 14 October 2009 and which reads thus:- "2. In order to address the difficulties in supply of gold, si....
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....f the exporter not fulfilling his export obligation within the prescribed period; (iii) the Nominated Agencies may be permitted to give a general bond for an estimated amount of duty worked out at the effective rate involved in their monthly import or may give a revolving bond starting with a bond equal to the duty estimated at the effective rate on quantity of precious metal likely to be imported in a month; (iv) the Nominated Agencies (other than designated banks nominated by RBI and public sector undertakings) shall also furnish a bank guarantee equal to 25% of the estimated amount of duty involved on import of precious metals in a month or the bonds executed by them. The exemption from bank guarantee to the designated banks nominated by RBI and public sector undertakings shall be admissible subject to the following conditions: (a) the nominated agency has not defaulted in following the procedure and condition specified by DGFT, (b) in case of default in export of jewellery manufactured out of precious metal supplied by nominated agency within the prescribed period, the nominated agency have not defaulted in payment of duty within the specified period; (c) the nominated ....
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....r-wise and the duty involved which will be worked on the basis of effective rate of duty; (xi) the Nominated Agencies shall maintain an account of the goods released to the exporters (exporter-wise) on day-to-day basis. This account shall be liable for inspection by any Customs Authorities as the account of a bonded warehouse; (xii) the exporter shall furnish the EP copy of the shipping bill and Bank certificate of realization in Appendix 22A to the nominated agencies as a proof of having exported the jewellery made from the duty free goods released to them within the period prescribed in the Foreign Trade Policy; (xiii) wherever such proof of export is not produced within the period prescribed in the Foreign Trade Policy, the Nominated Agencies shall (without waiting for its recovery from the exporter) deposit the amount of duty calculated at the effective rate leviable on the quantity of precious metal not exported, within 7 days of expiry of the period within which the jewellery manufactured out of the said precious metal was supposed to be exported. The duty so paid by the Nominated Agency shall be reflected in the monthly statement prescribed in para (x) above. The No....
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.... bar has a weight of 5 kg or above; (b) the goods are imported in accordance with the packing list issued by the mining company by whom they were produced; (c) the importer produces before the Deputy Commissioner of Customs or the Assistant Commissioner of Customs, as the case may be, an assay certificate issued by the mining company or the laboratory attached to it, giving detailed precious metal content in the dore bar; (d) the gold dore bars are imported by the actual user for the purpose of refining and manufacture of standard gold bars of purity 99.5% and above; and (e) the silver dore bars are imported by the actual user for the purpose of refining and manufacture of silver bars of purity 99.9% and above. Condition 35 If, - 1. (a) the duty is paid in convertible foreign currency; (b) the quantity of import does not exceed ten kilograms of gold and one hundred kilograms of silver per eligible passenger; and 2. the gold or silver is,- (a) carried by the eligible passenger at the time of his arrival in India, or (b) imported by him within fifteen days of his arrival in India, or (c) is taken delivery of from a customs bonded warehouse of the State Bank o....
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....ls of the supplier should also be ascertained before opening the LCs. The financial standing, line of business and the net worth of the importer customer should be commensurate with the volume of business turnover. Apart from the above, in case of such transactions banks should also make discreet enquiries from other banks to assess the actual position. Further, in order to establish audit trail of import/export transactions, all documents pertaining to such transactions must be preserved for at least five years. v. AD Category- I bank should follow up submission of the Bill of Entry by the importers as stipulated. vi. Head Offices/International Banking Divisions of AD Category -I banks shall henceforth submit the following statements to the Chief General Manager, Reserve Bank of India, Foreign Exchange Department, Central Office, Trade Division, Amar Building, Fort, Mumbai-400001: a) Statement on half yearly basis (end March / end September) showing the quantity and value of gold imported by the nominated banks/ agencies/ EOUS/ SEZs in Gem & Jewellery sector, mode of payment-wise, as per Annex-'3'; b) Statement on monthly basis showing the quantity and value of gol....
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....(4) and Section 11(1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999) and are without prejudice to permissions/approvals, if any, required under any other law." 130. On 04 September 2013, CBEC issued another Circular setting out the various regulatory measures with respect to import of gold and gold dore bars. The relevant parts of that Circular are extracted hereinbelow:- "Subject: Import of Gold and Gold Dore Bars - Procedure and Guidelines. Reference is invited to Board's Circular No. 28/2009 dated 14-10-2009 regarding procedure to be followed by the Nominated Agencies for supplying duty free gold to exporters. RBI has now issued fresh guidelines for import of gold and gold dore bars vide circular RBI/2013-14/187, AP (DIR Series) Circular No. 25 dated 14-8-2013, as revised (copy enclosed). In order to operationalize the same, the following procedure shall be followed for import of gold. This circular shall supersede the customs circular no. 28/2009-Cus., dated 14-10-2009 insofar as the import of gold is concerned. The import of silver and platinum shall continue to be governed by the customs circular dated 14-10-2009. 2. Henceforth, gold shall be permi....
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....20% quantity shall be for supply to the exporters only and remaining can be cleared on payment of duty in accordance with RBI circular dated 14-8-2013, as revised; iv. the Nominated Agencies shall furnish a bond to the satisfaction of the said officer undertaking to properly account for the warehoused gold and also to discharge the duty liability at the prescribed effective rate of duty; v. the Nominated Agencies may be permitted by the jurisdictional Commissioner of Customs to give a general bond for an estimated amount of duty worked out at the effective rate involved in their monthly import or a revolving bond starting with a bond equal to the duty estimated at the effective rate on quantity of gold likely to be imported in a month; vi. the Nominated Agencies (other than designated banks nominated by RBI and public sector undertakings) shall also furnish a bank guarantee equal to 25% of the estimated amount of duty involved on import of gold in a month or the bonds executed by them. The exemption from bank guarantee to the designated banks nominated by RBI and public sector undertakings shall be permissible subject to the following conditions: a. the said entity has not ....
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....e customs authorities under the provisions of circular 28/2009- Cus., dated 14-10-2009 need not take a fresh registration under this circular. This certificate has to be produced to the Nominated Agencies while taking gold. The units shall submit an undertaking to the Deputy/Assistant Commissioner without bank guarantee to follow the conditions of notification under which they are receiving duty free gold and export the jewellery made therefrom within the period stipulated in the Foreign Trade Policy. The same procedure will be followed by the EOU/SEZ units intending to receive gold from nominated agencies; xii. the customs officer shall permit clearance of the gold for export production under the relevant exemption notification after submission of the documents stated above and shall make necessary entries in the Register in the form prescribed in Annexure-I. This register shall be maintained by the customs officer separately for each of the nominated agency importing gold under his/her jurisdiction; xiii. the Nominated Agencies shall also maintain an account of the goods released to the exporters (exporter-wise) on day-to-day basis. This account shall be liable for inspection....
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....orted shall ensure that the quantity of gold imported by the license-holder, in the third consignment onwards from the date of notification of the RBI Circular dated 14-8-2013 as revised, does not exceed five times the quantity of gold contained in the exported products for which proof of export in accordance with Para 4A.8 (a) of HBP Volume 1 has been submitted to the customs officer; iv. the customs officer at the port from where gold dore bars are imported shall maintain a license-holder-wise record of the gold imported as per Register prescribed in Annexure-II. He/she shall also maintain a record of proof of export of the goods manufactured out of gold supplied by the license-holder to exporters from the refined gold. The proof of export, duly certified by the central excise officer in whose jurisdiction the refinery is registered, shall be submitted to the customs officer by the license holder. v. the license holder shall ensure that at least 20% of the gold manufactured out of each consignment of gold dore bars is supplied to the exporters and the remaining is supplied for domestic use in accordance with the RBI circular dated 14-8-2013, as revised; vi. entities/units ....
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....ms Free Subject to RBI Regulations. Subject to RBI Regulations. However, import policy of Gold Dore is "Restricted" 132. The aforesaid notification was followed by a notification issued by that Ministry dated 18 December 2019. The relevant parts of that notification are reproduced below:- "Subject: Amendment in import policy conditions of gold and silver under Chapter 71 of lTC (HS), 2017, Schedule -I (Import Policy). S.O. (E): In exercise of powers conferred by Section 3 of FT (D&R) Act, 1992, read with paragraph 1.02 and 2.01 of the Foreign Trade Policy, 2015-2020, as amended from time to time, the Central Government hereby amends the import policy with conditions of gold in any form, other than monetary gold and silver in any form under Chapter 71 of ITC(HS), 2017, Schedule -I (Import Policy). Exim Code Item Description Present Policy Revised Policy Existing Policy Condition Revised Policy Condition 71081100 Powder Free Restricted Subject to RBI Regulations Import is allowed only through nominated agencies as notified by RBI (in case of banks) and DGFT (for other agencies). 71081200 Other unwrought forms Free Restricted Subject to RBI R....
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....is allowed only through nominated agencies as notified by RBI (in case of banks) and DGFT (for other agencies) and IFSCA (for qualified jewelers through India International Bullion Exchange). Gold dore can be imported by refineries against a license with AU conditions. 71081300 Other semi-manufactured forms Restricted Import is allowed only through nominated agencies as notified by RBI (in case of banks) and DGFT (for other agencies). No change in existing Policy Condition." **** **** **** Effect of the Notification: In addition to nominated agencies as notified by RBI (in case of banks) and nominated agencies notified by DGFT, qualified jewellers as notified by International Financial Services Centres Authority (IFSCA) will be permitted to import gold under specific ITC(HS) Codes through India International Bullion Exchange IFSC Ltd. (IIBX). However, Import of gold/silver under Advance Authorisation and supply of gold/silver directly by foreign buyers to exporters under para 4.45 of FTP against export orders would continue to be governed by the relevant FTP provisions. This issues with the approval of Minister of Commerce & ....
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....stances in which the imported goods may become liable for confiscation, the provision firstly speaks of dutiable or prohibited goods. Section 111, apart from speaking of dutiable or prohibited goods also brings within its net goods which have come to be imported either in violation of conditions prescribed or goods which have been concealed as well as imported articles which may have otherwise not complied with the conditions prescribed under the Act. 137. What thus clearly appears to flow from Section 111 is of the power of confiscation being extendable not just in the case of dutiable or prohibited goods but also to goods whose import may have been effected in violation of the conditions prescribed by the Act. This is clearly evident from a reading of Clauses (e), (f), (g), (h), (i), (j), (m), (n), (o) and (p) of Section 111. 138. Section 3 of the FTDR empowers the Union Government to publish an order encapsulating provisions for the development and regulation of foreign trade. In terms of Section 3(2), the Union Government is further conferred with the authority to prohibit, restrict or otherwise regulate the import or export of goods or services by way of an order duly publis....
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.... prejudice to anything contained in any other law" must be given its full effect. It was the submission of the learned amicus that the principles enunciated in Sheikh Md. Omar and Om Prakash Bhatia must be understood and appreciated bearing in mind the indubitable fact that they came to be rendered prior to the introduction of sub-section (4) in Section 3 of the FTDR. According to the learned amicus, the various decisions and precedents which have proceeded to adopt the line of reasoning which weighed upon the Supreme Court while deciding Sheikh Md. Omar and Om Prakash Bhatia have clearly failed to notice or appreciate the impact of Section 3(4). 141. We however find ourselves unable to countenance the said submission since it fails to take into consideration the prescriptions in relation to gold as embodied in the FTP as well as the ITC(HS). Undisputedly, both the FTP as well as the ITC(HS) while declaring that the import of gold would be free parallelly also stipulate that it would be subject to RBI regulation. Undoubtedly, both the FTP as well as the ITC(HS) owe their genesis to the provisions of the FTDR and the Act. The FTP is formulated and announced in terms of the specific....
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....et all goods in respect of which a prohibitory notification or order may have been issued. That order could be one promulgated either under Section 11 of the Act, Section 3(2) of the FTDR or any other law for the time being in force. However, a reading of the latter part of Section 2(33) clearly leads us to conclude that goods which have been imported in violation of a condition for import would also fall within its ambit. If Section 2(33) were envisaged to extend only to goods the import of which were explicitly proscribed alone, there would have been no occasion for the authors of the statute to have spoken of goods imported in compliance with import conditions falling outside the scope of "prohibited goods". 146. Our conclusion is further fortified when we move on to Section 11 and which while principally dealing with the power to prohibit again speaks of an absolute prohibition or import being subject to conditions that may be prescribed. It is thus manifest that a prohibition could be either in absolutist terms or subject to a regime of restriction or regulation. It is this theme which stands reiterated in Section 3(2) of the FTDR which again speaks of a power to prohibit, re....
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....statutory regime which currently prevails. The decision of the Tribunal in Prayag Exporters as well as Atul Automations of the Supreme Court fail to either notice or consider the judgment in Sheikh Mohd. Umer. Though Atul Automations is a judgment rendered by a Bench of a larger coram, the same has been duly noticed in Raj Grow Impex which had reaffirmed the view expressed in Sheikh Mohd. Umer. The discordant line which came to be drawn in the decision of the Supreme Court in Prayag Exporters was ultimately explained away in Suresh Jhunjunwala. 149. Turning then to the decisions rendered by some of the other High Courts, we find ourselves unable to countenance the line of reasoning as adopted by the Madras High Court in City Office Equipment when it held that if prohibited goods are imported in compliance with applicable conditions, they become "non-prohibited" goods. The view expressed in that decision to the effect that the Act contemplates a regime where either an absolute embargo operates and in the absence of such a stipulation, the goods are to be viewed as "non-prohibited", in our considered opinion, fails to bear in mind the nuanced meaning which Section 2(33) and the othe....
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....ort of any item would fall within the domain of the Ministry of Commerce/DGFT and additionally, governed by the Export Import Policy/Foreign Trade Policy. 153. In our considered opinion, the response of the SBI can by no stretch of imagination be construed as diluting the rigour of a regulatory measure operated by RBI in relation to the import of gold. Quite apart from the fact that the response was not of the RBI itself, we find that SBI correctly responded to the query which stood posed by asserting that the regulation of imports or exports is principally a subject which falls within the remit of the Ministry of Commerce/DGFT. It had further while replying to the query stated that the regulation of imports/exports would be governed by the EXIM Policy and the FTP as prevalent at the relevant time. 154. The submission addressed by the learned amicus does not commend acceptance when one bears in mind the admitted position that the stipulation with respect to the import of gold being subject to RBI regulatory control is a prescription which stands incorporated in and introduced by the FTP itself. It is the FTP formulated in terms of Section 5 of the FTDR which makes the import of g....
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....orce under this Act or any other law for the time being in force, to a penalty 216 [not exceeding the value of the goods or five thousand rupees], whichever is the greater; (ii) in the case of dutiable goods, other than prohibited goods, to a penalty 217 [not exceeding the duty sought to be evaded on such goods or five thousand rupees], whichever is the greater; (iii) in the case of goods in respect of which the value stated in the entry made under this Act or in the case of baggage, in the declaration made under section 77 (in either case hereafter in this section referred to as the declared value) is higher than the value thereof, to a penalty 219 [not exceeding the difference between the declared value and the value thereof or five thousand rupees], whichever is the greater;] (iv) in the case of goods falling both under clauses (i) and (iii), to a penalty 220 [not exceeding the value of the goods or the difference between the declared value and the value thereof or five thousand rupees], whichever is the highest;] (v) in the case of goods falling both under clauses (ii) and (iii), to a penalty 221 [not exceeding the duty sought to be evaded on such goods or the differenc....
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.... of doubts, it is hereby declared that- (i) the provisions of this section shall also apply to cases in which the order determining the duty or interest under sub-section (2) of section 28 relates to notices issued prior to the date on which the Finance Act, 2000 receives the assent of the President*; (ii) any amount paid to the credit of the Central Government prior to the date of communication of the order referred to in the first proviso or the fourth proviso shall be adjusted against the total amount due from such person.] 3. 81. Regulations in respect of baggage.-The Board may make regulations,- (a) providing for the manner of declaring the contents of any baggage; (b) providing for the custody, examination, assessment to duty and clearance of baggage; (c) providing for the transit or transhipment of baggage from one customs station to another or to a place outside India. 4. 77. Declaration by owner of baggage.-The owner of any baggage shall, for the purpose of clearing it, make a declaration of its contents to the proper officer. 5. 79. Bona fide baggage exempted from duty.-(1) The proper officer may, subject to any rules made under sub-section (2), pass free of ....
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.... goods were confiscated imposing penalty and no option was given to the appellants for redeeming the goods on payment of such fine as may be determined by the Collector of Customs in lieu of confiscation. It is not clear from the reading of the Judgment as to what the alleged violation was. However, the matter was remanded back to the Collector of Customs for a limited purpose to decide whether to give an option to the appellants to redeem the confiscated goods on payment of fine. 11. The President of the Union may from time to time, by notification in the Gazette, prohibit or restrict the bringing or taking by sea or by land goods of any specified description into or out of the Union of Burma or any specified part thereof, either generally or from or to any specified country, region, port or place beyond the limits of the Union of Burma. 12. 58. Power of the Central Board to make regulations.- (1) The Central Board may, with the previous sanction of the 1[Central Government], 2[by notification in the Official Gazette,] make regulations consistent with this Act to provide for all matters for which provision is necessary or convenient for the purpose of giving effect to the provi....
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....l Government and that Government shall cause a copy of the same to be laid before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the regulation, or both Houses agree that the regulation should not be made, the regulation shall, thereafter, have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that regulation.] 8[(5)] Copies of all regulations made under this section shall be available to the public on payment. 13. 123. Burden of proof in certain cases.-1[(1) Where any goods to which this section applies are seized under this Act in the reasonable belief that they are smuggled goods, the burden of proving that they are not smuggled goods shall be- (a) in a case where such seizure is made from the possession of any person,- (i) on the person from whose po....