TaxTMI 
TaxTMI 
2023 (8) TMI 1008
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....behalf of respondent no. 2 & 3 along with Mr. Dhruv, Mr. Mandal, Advs. 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. ....
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....el', she was found in possession of three gold metal bars and two gold cut pieces (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 A....
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....o Rs. 8,00,000/- (P-8). The department/respondent No. 2 preferred an appeal and the Revisional 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 ....
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.... was detained despite the fact that he had duly declared the said gold at Dubai Airport before boarding 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 g....
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.... Revision Application before the Central Government against the order dated 24 August 2018, which by the 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 sub....
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....Customs 1970(2) SCC 728; Om Prakash Bhatia v. Commissioner of Customs (2003) 6 SCC 161; Garg Woolen Mills v. Customs (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 ....
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....liance was placed on the decisions in the case of Sunshine International v. Collector of Customs 1993 (42) ECC 282; Mohini 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. (20....
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.... there was a specific Notification under Section 18 of the Foreign Exchange Regulations Act, 1972 [FERA] and such distinction was 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 '....
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....than Section 11(1) of the Act which gives power to the Central Government to issue notification prohibiting import or export of goods absolutely or subject 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 th....
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....nd upon the manner in which the authority approves the transaction. Section 7 of the Foreign Trade (Development and Regulation) Act clearly indicates that no person shall make any import 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 r....
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....h Bhatia v. Commissioner of Customs (supra);, Garg Woolen Mills v. Customs (supra) and Union of India v. Raj Grow Impex (supra) and lastly to the decision in Abdul Rajak v. UOI 2012 (275)ELT 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....
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....ia from a place outside India but does not include goods which have been cleared for home consumption; (26) '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 holding 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 impor....
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.... empowers the Central Government to issue notifications exempting either absolutely or subject to such conditions as specified in a notification, goods of any specified description from the whole or any part of the duty under the Customs Act leviable thereon "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 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 c....
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....rks and copyrights; (o) the prevention of deceptive practices; (p) the carrying on of foreign trade in any goods by the State, or by a Corporation owned or controlled by the State to the exclusion, complete or partial, or citizens of India; (q) the fulfilment of obligations under the Charter of the United Nations for the maintenance of international peace and security; (r) the implementation of any treaty, agreements 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 r....
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....ide India shall be liable to confiscation:- (a) any goods imported by sea or air which are unloaded or attempted to be unloaded at any place other than a customs port or customs airport appointed under clause (a) of section 7 for the unloading of such goods; (b) any goods imported by land or inland water through any route other than a route specified in a notification issued under clause (c) of section 7 for the import of such goods; (c) any dutiable or prohibited goods brought into any bay, gulf, creek or tidal river for the purpose of being landed at a place other than a customs port; (d) any goods which are imported or attempted to be imported or are brought within the 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 for....
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.... sub clauses (e) (f) (i) (j) & (m) to Section 111 of the Act clearly bring out that import of any 'dutiable'; or 'prohibited' goods which are not declared at the customs when imported, would be an act or omission amounting to smuggling, and would therefore subject the goods to confiscation. As much is canvassed as to whether 'smuggling' of goods can be read or not into the definition of "prohibited" goods, and further that its confiscation and release/redemption are severable course of actions, we reach to the crucial issue of interpreting Section 125 of the Act, which provides as under:- "125. Option to pay fine 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, w....
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....ual passenger coming from abroad to be free from levy of custom duty if carrying jewelry upto an aggregate value of Rs. 10,000/- in case of a gentleman and Rs. 20,000/- in case of a lady passenger. However, in a later Notification: 12/2012-Cus. dated 17 March 2012 the Government relaxed the conditions as to enable 'eligible passengers' to carry gold not exceeding 10 kgs provided declaration is filed in the prescribed form before the proper officer at Customs at the time of arrival in India but directing the customs officials to rigorously follow the following guidelines: (i) The engraved serial number of gold bars must be invariably mentioned in the baggage 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 ....
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....nd, sea or air". Chapter-II enables Central Government to make orders and announce Foreign Trade Policy and the relevant provisions go as under:- "3. Powers to make provisions relating to imports and exports.-(1) The Central Government may, by Order published in the Official Gazette, make provision for the development and regulation of foreign trade by facilitating imports and increasing exports. (2) The Central Government may also, by Order published in the Official Gazette, make provision for prohibiting, restricting or otherwise regulating, in all cases or in specified classes of cases and subject to such exceptions, if any, as may be made by or under the Order, the [import or export 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 u....
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....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. However, it again begs the question as to whether such relaxation would apply to importation of gold in the nature of smuggling? NOTIFICATIONS AND CIRCULARS BY THE GOVERNMENT DEPARTMENTS 48. In order to answer the above question, let us now scan through the various notifications/circulars issued by the Government regulating importation of gold into India. Firstly, it would be expedient to extract the relevant notifications and circulars issued by the DGFT issued from time to time, 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 ....
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....), 2017, Schedule-1 (Import Policy), which conditions are extracted as under: Exim Code Item Description Present Policy Revised Policy Existing Policy Condition Revised Policy Condition 71061000 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) 71069100 Unwrought 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) Silver dore can be imported by refineries against a licence with AU 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) (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 F....
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....000 Other Restricted Import is allowed only through nominated agencies as notified by RBI (in case of banks) and DGFT (for other agencies) Import is allowed only through nominated agencies as notified by RBI (in case of banks), DGFT (for other agencies) and IFSCA (for qualified jewelers through India International Bullion Exchange). RBI CIRCULARS 49. A careful perusal of the aforesaid DGFT notifications brings out that the government policy for import has been by and large in "restricted "category and import of gold has been highly regulated with it being allowed through nominated banks and agencies only. We then take cognizance of the various Circulars issued by the RBI from time to time regulating the import of gold into India, relied upon by the ld counsels for the respondents, the extracts of which read as under: (i). Circular No. 107 dated 04.06.2013 issued by the Government of India, Ministry 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 ....
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....Circular No. 133 RBI/2013-14/600 dated May 21, 2014 that import of gold beyond 100 kg was allowed only routed through Custom bounded warehouses only by nominated agencies and export houses or individuals. (viii). Further, Guidelines were given vide Circular No. 79 RBI/2014-45/474 dated Feb 18, 2015 under Section 10 (4) read with Section 11 (1) of FEMA vide which import of gold coin and medallions were no longer prohibited but restrictions on banks in selling gold coins and medallions were not removed. (ix). Circular No. 04 RBI/2022-2023/57 dated May 25, 2022 issued under Section 3 read with Section 5 of FTDR Act r/ w paragraph 1.02 and 2.01 of Foreign Trade Policy 2015-2020, allowed import of gold by qualified jewellers as notified by the International Financial Services Centres Authority (IFSCA). It provided detailed mechanism by the resident qualified jeweller to import gold through IIBX i.e., India International Bullion Exchange IFSC Ltd. or in terms of any other regulations 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....
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....smuggling of gold into India. As per Directorate of Revenue Intelligence annual report for 2019-2020^6, 120 tonnes of gold were smuggled into India whereas as per annual report for 2021-22, 836 kgs of gold were seized by the department during 2021-22. The report also reads as under: "Gold has proved to be an attractive vehicle for money laundering for criminals due to the reasons that it remains stable in value, is easily transformable and interchangeable for other assets. From mining to retailing, lucrative proceed generating opportunities are presented by this precious metal especially for those who are inclined to engage in illegal activities. Gold continues to offer opportunities for arbitrage due to differential prices internationally. It also remains vulnerable to be used in trade based money laundering operations as it permits high values to be moved across borders in a relatively convenient way with a product that can be transformed to be concealed easily. This quality of gold to move value 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 (IG....
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....tion 3(1) of the Imports and Exports (Control) Act, 1947, promulgated w.e.f. 07 December 1955, it was held that import of live stocks and animals was prohibited and the word 'any prohibition' in Section 111(d) of the Act meant complete as well as partial prohibition and merely because Section 3 of the Imports and Exports (Control) Act, 1947 used three different expressions "prohibiting", "restricting" or otherwise "controlling" was not to cut down the amplitude of the word "any prohibition" in Section 111(d) of the Act, and therefore, the decision by the Adjudicating Authority not permitting release/redemption was upheld. 56. In the case of Om Prakash Bhatia v. Commissioner of Customs (supra), the petitioner attempted to export prohibited goods under Section 113(d), who was found guilty of intentional over-invoicing of the exported goods in violation of Section 18(1) (a) of the FERA, 1973, Section 14 of the Act read with Rule 11 of the Foreign Trade (Regulation) Rule, 1993 read with Section 11(1) of the FT(D&R) Act, 1992. The crux of the matter is that the exporter failed to fully disclose the true sale consideration. Examining the scope and ambit of section 2(33) read with sect....
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....of the word 'any prohibition' in Section 111(d) of the Act. `Any prohibition' means every prohibition. In other words all types of prohibitions. Restriction is one type of prohibition. From Item (I) of Schedule I Part IV to Import Control Order, 1955, it is clear that import of living animals of all sorts is prohibited. But certain exceptions are provided for. But nonetheless the prohibition continues." {bold italics emphasized} 57. Thus, it was categorically held that wherever the conditions prescribed for import or export of goods are not complied with, such goods shall fall in the category of 'prohibited' goods withing the scope and meaning of section 2(33) of the Act. At this stage there is a twist in the tale since it is relevant to take note that the ratio in the aforesaid two cases (the latter decided by the two Hon'ble Judges of the Supreme Court) was not referred to or perhaps overlooked in a decision by three Hon'ble Judges of the Supreme Court in the cited case of Commissioner of Customs v. Atul Automation (P) Ltd. (supra). Atul Automation was a case where the appellant in October November, 2016 imported MFDs without requisite permission viz., Multi....
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....nment under the FTDR as also consequential trade notices issued by the DGFT restricting the import of certain beans, peas and pulses. The Hon'ble Judges of the Supreme Court relied on the decision in Sheikh Mohd. Omar v. Customs(supra) and it was observed that restrictions had been imposed not only due to increased quantities of imports but to also to prevent panic disposal by farmers since prices of grams would have come down. Primarily two questions were posed as to whether the goods were falling in 'prohibited category' and 'liable to absolute confiscation'. It was observed as under: "154. The present case is of an entirely different restriction where import of the referred peas/pulses has been restricted to a particular quantity and could be made only against a licence. The letter and spirit of this restriction, as expounded by this Court earlier, is that, any import beyond the specified quantity is clearly impermissible and is prohibited. This Court has highlighted the adverse impact of excessive quantity of imports of these commodities on the agricultural market economy in the case of Agricas (supra) whereas, it had not been the case in Atul Automations (supra) t....
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....nableness, rationality, impartiality, fairness and equity are inherent in any exercise of discretion; such an exercise can never be according to the private opinion. 165. It is hardly of any debate that discretion has to be exercised judiciously and, for that matter, all the facts and all the relevant surrounding factors as also the implication of exercise of discretion either way have to be properly weighed and a balanced decision is required to be taken. 166. It is true that the statutory authority cannot be directed to exercise its discretion in a particular manner but, as noticed in the present case, the exercise of discretion by the Adjudicating Authority has been questioned on various grounds and the Appellate Authority has, in fact, set aside the orders-in-original whereby the Adjudicating Authority had exercised the discretion to release the goods with redemption fine and penalty. Having found that the goods in question fall in the category of 'prohibited goods' coupled with the relevant background aspects, including the reasons behind issuance of the notifications in question and the findings of this Court in Agricas (supra)^9, the question is as to wheth....
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....'s market, the entire purpose of the notifications would be defeated. The discretion in the cases of present nature, involving far-reaching impact on national economy, cannot be exercised only with reference to the hardship suggested by the importers, who had made such improper imports only for personal gains. The imports in question suffer from the vices of breach of law as also lack of bona fide and the only proper exercise of discretion would be of absolute confiscation and ensuring that these tainted goods do not enter Indian markets. Imposition of penalty on such importers; and rather heavier penalty on those who have been able to get some part of goods released is, obviously, warranted. {bold italics emphasized} 60. In the cited case of Commissioner of Customs (Prev) v. M. Ambalal & Co. (supra), the Customs department on receiving specific information, conducted search and seizure in the office of respondent firm unearthing a large quantity of rough diamonds regarding which partner of the Firm was neither able to afford any satisfactory explanation nor produced any documents in relation to import of diamonds. The said goods were seized, later confiscated and applica....
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....ithout any license and the Adjudicating Officer ordered absolute confiscation, imposed penalty without addressing the question of an option being given to the petitioners to redeem the goods on payment of fine. The petitioners urged that the import of Cassia had been going on in the same manner without any license for several years and in similar situations, the items had been allowed to be released/redeemed on payment of fine, and therefore, they had a legitimate expectation that the goods shall not be confiscated and would be released/redeemed on payment of fine but on the contrary, they have been arbitrarily singled out and meted out a different treatment. Upholding such plea, it was held that not releasing or /redeeming the item would offend Article 14 of the Constitution of India, and therefore, the Adjudicating Authority was held to have passed the order of confiscation with penalty contrary to the letter and spirit of Section 125 of the Act. In the case of Mohini Bhatia v. Commissioner of Customs (supra) CEGAT Mumbai (1999), the petitioner arrived from Singapore and when she attempted to pass through the 'Customs Green Channel', was asked if she was carrying any gold, to whi....
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....d its conclusion vide paragraph (34) as under:- 34. From Section 125, the Customs Manual, 2018 of the department and various case laws cited by both sides and discussed above, the following position is clear: (a) Allowing redemption of goods, which are not prohibited is mandatory and the adjudicating authority has to allow it under Section 125. (b) Allowing redemption of goods whose import is prohibited is discretionary and the adjudicating authority may or may not allow it. (c) Import of gold is not absolutely prohibited but is restricted. (d) The owner or the person from who the goods are seized cannot claim as a matter of right that the prohibited goods must be allowed to be redeemed as held by Hon'ble High Court of Madras in the case of Samyanathan Murugesan and by Hon'ble High Court of Kerala in case of Abdul Razak. Both these judgments were upheld by the Hon'ble Supreme Court. (e) Although, as per Section 2(33) of the Customs Act, 'prohibited goods' includes restricted goods in respect of which the conditions have not been fulfilled, a distinction was drawn by the Government of India in the case of Ashok Kumar ....
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.... Examining various provisions of law including the Customs Act and the FTDR Act and plethora of case law on question as to whether Adjudicating Authority has properly exercised its discretion, it was held that since the gold was not a prohibited item, the Adjudicating Authority i.e., Tribunal rightly exercised its power based on the twin tests of 'relevancy' and 'reasonableness'. 66. The cited case of Becker Gray & Company Ltd. v. Union of India 1970 (1) SCC 351 is a decision by three Hon'ble Judges of the Supreme Court wherein the issues came to be discussed in the context of Section 12 of the FERA as well as the Sea Customs Act, 1949. It was a case whereby the appellants claimed that they had exported Jute Carpet Baking Cloth and the Customs found that declarations given by them were not correct as the full export value of the goods was not shown and the declarations required to be made under the Rules in the prescribed form were also incorrect. It is in the said context that it was held that there was only a breach of restrictions imposed by Section 12(1) of the Sea Customs Act and a mere incorrect declaration was not in contravention of Section 19 of the Sea Customs Act^....
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.... any way involved in carrying, removing, concealing or in any other manner dealing with goods, which he knows or has reasons to believe liable to be confiscation under Section 111 or 113 of the Act"^16. Section 138 of the Act further raises the presumption of "culpable mental state" in the matter of prosecution under this Act and it is upon the accused to prove that he had no such mental state with respect to the act charged as an offence in any prosecution. The explanation to Section 138 of the Act further provides that 'culpable mental state' "includes intention, motive, knowledge of a fact and belief in, or reason to believe, a fact". As we noted at the beginning this judgment, smuggling of gold into India causes a cascading effect on the economy of the country, and we cannot overlook the fact that smuggling of gold into India is obviously preceded by payment of consideration either in Indian or foreign currency, which is another aspect of alarming levels of actionable money laundering, venturing into generation of black money and other unlawful activities including financing terrorism. 70. In view of the foregoing discussion, we answer the issues framed to the effect that Se....
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....eclaring anything in respect of the seized items, which were non- bonafide baggage and were concealed by the Noticee." 73. Although there is no denying the fact that 80:20 policy stood withdrawn by the RBI, at the same time as discussed in this judgment earlier it was never the policy of the Government to allow unconditional import of gold into India. Further, perusal of the record reflects that the learned Adjudicating Authority placed reliance on decisions in Sheikh Mohd. Omer v. Collector of Customs (supra) as also in the case of Om Prakash Bhatia v. Commissioner of Customs, Delhi (supra) in reaching the conclusion that the subject goods constituted "prohibited goods" and were therefore liable to confiscation under Section 111 of the Customs Act, 1962. The decision by the learned Adjudicating Authority to absolutely confiscate the gold items and imposing penalty without any option to the petitioner of its release/redemption was also upheld by the Appellate Authority. On challenge by the petitioner, the Revisional Authority after hearing the parties vide the impugned order dated 08 January 2020 came to the conclusion that the burden to prove ownership of the subject goods was ....
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....violated provisions of Section 77 of the Customs Act, 1962. 3.3 Gold is not allowed to be imported freely in baggage. Gold is permitted to be imported by passenger subject to fulfillment of certain conditions. The Noticee does no fulfill the conditions set out in the proviso to Rule 3(1)(h) of the Foreign Trade (Exemption from Application of Rules in certain cases) Rules, 1993 and hence, she is not entitled to import the gold. 3.7 The imported goods in the instant case have been concluded to be non-bonafide baggage and as prohibited goods. The same was being attempted to be removed from the customs area and would have been successful lest the Customs Officers would have not intercepted the Noticee... 6. I find that in the instant case, the Noticee failed to satisfy the customs authorities regarding purpose and intention of the importing gold to India. She also failed to provide the documentary evidence regarding licit possession of recovered gold." 76. In arriving at such findings, the learned Adjudicating Authority inter alia relied on the decision in Sheikh Mohd. Omer v. Collector of Customs (supra) as also in the case of Om Prakash Bhatia v. Commiss....
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....t was a precedent not worth its salt. Two wrong precedents cannot create a right. Learned Revisional Authority was therefore correct on facts and law to hold that the claim of the petitioner in gold items weighing about 3000 grams was dubious and the documents with regard to ownership were found to be plainly fabricated. Hence, the impugned order dated 9 July 2021 passed by the learned Revisional Authority does not warrant any interference. Accordingly, the present Writ Petition is devoid of any merit and is liable to be dismissed. W.P. (C) No. 13131/2022 (Sudha Murthy v. Jt. Commissioner of Customs, IGI Airport, T-3, Delhi 78. In the present Writ Petition, learned Adjudicating Authority vide order-in-original dated 01 January 2021 decided to absolutely confiscate the gold items besides imposing penalty without any option to the petitioner for its release/redemption. The findings recorded are reproduced as under: "7.1.... The imported goods in the instant case have been concluded to be non-bonafide baggage as the same were being attempted to be removed from the customs area without declaration and the pax would have been successful in evading applicable customs duty ....
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.... W.P.(C) No.531/2022 (Mr. Jasmeet Singh Chadha v. Commissioner of Customs, IGI Airport, New Delhi) 82. In the instant Writ Petition, the learned Adjudicating Authority ordered for absolute confiscation of the subject goods and imposed a penalty upon the petitioner, which was affirmed by the appellate authority and thereafter a revision application was preferred by the petitioner. The grounds taken before the learned Revisionary Authority were mainly that the goods in question were not 'prohibited items' and that their redemption should have been allowed; and that the panchnama dated 09 September 2014 was invalid as it did not bear his signature; and that the conclusion pertaining to the goods being recovered from the shoes of the petitioner was incorrect. The learned Revisional Authority vide the impugned order dated 22 September 2022 affirmed the order-in-original holding that: "6..... Hence, the burden of proving that the subject gold bars, were not smuggled, is on the applicant who had brought the gold into the country. The manner of concealment, in this case clearly shows that the applicant had attempted to smuggle the seized gold to avoid detection by the Custom....
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....on-bonafide baggage' per Section 79 of the Act read with Rule 3 of the Baggage Rules of 2003. The following findings were arrived at in the order in original: "3.8 The goods imported were found/lying/kept in secret manner at the duty free shop waiting to be cleared by the accomplices of the Noticee, which were finally recovered per the revelation of the Noticee. She, as admitted in her statement, intended to cross the Green Channel without payment of duty, tried to smuggle the goods with connivance of staff of M/S. AISATS. Thus being an organized nature of crime and involving mens rea to smuggle the goods, the plea that she was not given a chance to declare the gold does not come to our rescue especially in view of the fact that second packet had already been cleared by her with the help of her accomplices out of the airport without declaration and payment of Customs Duty. Thus the seized goods are liable to confiscation. Further the mis declaration under Section 77 has been discussed and established earlier. Hence, the confiscation as proposed under Section 111 (l) and (m) is warranted and liable to be upheld in view of facts and sequences of events in para 3.2. ....
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....by brother Sharma J. thus commend acceptance and affirmation and which I do formally in terms of this concurring opinion so record. However, bearing in mind the significance of the questions which stood raised, I deem it apposite to record the following reasons independently in support of the determination and verdict formulated. 88. These writ petitions raise the question whether gold is liable to be viewed as falling in the category of "prohibited goods" and consequentially its redemption and release being subject to a discretionary exercise of power conferred upon the Adjudging Officer under Section 125 of the Customs Act, 1962. The petitioners would contend that since the article is not specifically prohibited for import, it becomes mandatorily liable to be released in the hands of the person from whose possession or custody the gold had been seized. The said issue itself arises in the context of the discretion which stands vested in the Adjudicating Authority in terms of Section 125 of the Act which postulates that such an officer "may" in the case of prohibited goods release the same by providing an option to pay redemption fine in lieu of confiscation as opposed to the st....
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....o the import and export of goods. 91. It would be pertinent to note at this juncture that insofar as Section 18 of FERA is concerned, the prohibition which was put in place related to the obligation of the exporter to comply with the export conditions applicable. This is evident from the language of Section 18 which read as follows: - "18. Payment for exported goods.-(1)(a) The Central Government may, by notification in the Official Gazette, prohibit the taking or sending out by land, sea or air (hereafter in this section referred to as export) of all goods or of any goods or class of goods specified in the notification from India directly or indirectly to any place so specified unless the exporter furnishes to the prescribed authority a declaration in the prescribed form supported by such evidence as may be prescribed or so specified and true in all material particulars which, among others, shall include the amount representing- (i) the full export value of the goods; or (ii) if the full export value of the goods is not ascertainable at the time of export, the value which the exporter, having regard to the prevailing market conditions, expects to rece....
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....was the distinctive features that the Board also found that the declarations were further incorrect inasmuch as the goods were declared to have been sold, while they were being exported on consignment basis as unsold goods, and it was further stated in the declarations that the full export value of the goods is the value shown instead of stating that it was the fair valuation of unsold goods. The finding recorded by the Board, no doubt, shows that the declarations required to be made under the Rules in Form GRI contained incorrect information; but that incorrect information related to points on which Section 12(1) does not require a declaration. A declaration, which is in contravention of the Rules or the Forms prescribed under the Rules, may be penalised under Section 23 of the Act, but such contravention will not attract the provisions of the Sea Customs Act. Under Section 23-A of the Act, only a breach of restrictions imposed by Section 12(1) of the Act is to be deemed a contravention of restrictions imposed by Section 19 of the Sea Customs Act. An incorrect declaration in contravention of the Rules made under Section 27 of the Act is not to be deemed a contravention of any rest....
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....ontrol) Appellate Tribunal, West Zonal Bench at Mumbai in Appeal No. C/195V/2000-Bom. whereby the Tribunal has arrived at the conclusion that it has taken consistent view that Clause (d) of Section 113 of the Customs Act would apply in cases of prohibited goods and would not apply to the facts of the present case. Admittedly, goods in question are not prohibited for export and no export duty is leviable on the said goods. In this view of the matter, no interference is called for with the impugned judgment and order. Hence, this appeal is dismissed." 98. It was in the aforesaid backdrop that Mr. Gulati submitted that the decisions rendered earlier in point of time had taken the consistent view that in the absence of any specific proscription, no prohibition could be assumed. It was however pointed out that Om Prakash Bhatia which was rendered in the context of Section 18 of the FERA, had observed as follows: - "7. Next - as the order for confiscation of goods is passed by referring to Section 113(d) of the Act, we would refer to the same. It reads as under: "113. Confiscation of goods attempted to be improperly exported etc.-The following export goods shall be l....
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....ction 111(d) must be considered as a total prohibition and that the expression does not bring within its fold the restrictions imposed by clause (3) of the Import Control Order, 1955." 99. The learned amicus pointed out that unlike the facts which obtain in the present batch, Om Prakash Bhatia was concerned with a case where a specific notification under Section 18 of the FERA had been issued. Our attention was then invited to the judgment in Commissioner vs. Suresh Jhunjhunwala (2007) 12 SCC 391 where again, according to Mr. Gulati, the distinction between a prohibition and a restriction was duly highlighted as would be evident from the following passages of that decision: - "14. The definition of prohibited goods is a broad one. The said provision not only brings within its sweep an import or export of goods which is subject to any prohibition under the said Act, but also any other law for the time being in force. 15. The Tribunal does not appear to have considered the matter from this angle. Power to confiscate, thus, would arise under both the situations. 16. In Prayag Exporters (P) Ltd. v. Commr. of Customs [(2000) 121 ELT 819 (cegat)] the Tribuna....
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....Exchange Regulation Act were analysed and the law was laid down stating: (SCC p. 169, para 18) "18. (a) The exporter has to declare the full export value of the goods (sale consideration for the goods exported). (b) The exporter has to affirm that the full export value of the goods will be received in the prescribed manner. (c) If the full export value of the goods is not ascertainable, the value which the exporter expects to receive on the sale of the goods in the overseas market. (d) The exporter has to declare the true or correct export value of the goods, that is to say, the correct sale consideration of the goods. Criterion under Section 14 of the Act is the price at which such or other goods are ordinarily sold or offered for sale in the course of international trade where the seller and the buyer have no interest in the business of each other and the price is the sole consideration for sale or offer for sale." 20. This Court did not stop there, but also took into consideration the provision of Rule 11 of the Foreign Trade (Development and Regulation) Rules, 1993, holding: (SCC p. 170, para 20) "20. Hence, in cases where t....
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....iated in the peculiar facts of those cases coupled with the aspect that they had come to be rendered prior to Section 3(4) of the FTDR being inserted by virtue of Act 25 of 2010. Section 3(4) stipulates that no permit or license shall be necessary for the import or export of any goods nor shall any goods be prohibited for import except as may be required by a rule or order made under the aforesaid statute. According to the learned amicus, the aforesaid provision which is of seminal import has clearly been lost sight of in the various decisions rendered on the subject and the issue must, therefore, be authoritatively ruled upon by this Court. 101. The learned amicus further commended for our consideration, the decision of the Supreme Court in Commissioner of Customs vs. Atul Automations (P) Ltd. (2019) 3 SCC 539, where the legal position was explained as under: - "6. We have considered the submissions on behalf of the parties. MFDs were imported in October-November 2016. They were detained by the Customs Authorities opining that the imports had been made in violation of the Foreign Trade Policy, 2015-2020 framed under Sections 3 and 5 of the Foreign Trade Act and the Was....
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....by the High Court that the respondent was entitled to redemption of the consignment on payment of the market price at the reassessed value by the Customs Authorities with fine under Section 112(a) of the Customs Act, 1962. ***** ****** ****** 11. Rule 15 of the Waste Management Rules dealing with illegal traffic, provides that import of "other wastes" shall be deemed illegal if it is without permission from the Central Government under the Rules and is required to be re-exported. Significantly the Customs Act does not provide for re-export. The Central Government under the Foreign Trade Policy has not prohibited but restricted the import subject to authorisation. The High Court therefore rightly held that MFDs having a utility period, the extended producer responsibility would arise only after the utility period was over. In any event, the E-waste Rules, 2016 certificate had since been issued to the respondents by the Central Pollution Control Board before the goods have been cleared." 102. Mr. Gulati submitted that Atul Automations constitutes the first judgment rendered by the Supreme Court which had noticed the interplay between the Act and....
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....n; or (2) in terms of Section 11(9) of the Foreign Trade (Development and Regulation) Act, 1992 upon payment of redemption charges." 104. Emphasis was laid on the conclusions which that High Court ultimately came to record when it held that even prohibited goods could be imported subject to the applicable conditions being fulfilled. The said High Court had then proceeded to observe that if those conditions were fulfilled, the prohibited goods would automatically become "non-prohibited goods". 105. Turning then to the decision of the Supreme Court in Union of India vs. Raj Grow Impex 2021 SCC Online SC 429, the learned amicus laid stress upon the following passages from that decision: - "146. As noticed, only the particular restricted quantity of the commodities covered by the said notifications could have been imported and that too, under a licence. Therefore, any import within the cap (like that of 1.5 lakh MTs) under a licence is the import of restricted goods but, every import of goods in excess of the cap so provided by the notifications, is not that of restricted goods but is clearly an import of prohibited goods. **** ****&nb....
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.... **** *** *** 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 considerations. The quest has to be to find what is proper. Moreover, an authority acting under the Customs Act, when exercising discretion conferred by Section 125 thereof, has to ensure that such exercise is in furtherance of accomplishment of the purpose underlying conferment of such power. The purpose behind leaving such discretion with the Adjudicating Authority in relation to prohibited goods is, obviously, to ensure that all the pros and cons shall be weighed before taking a final decision for release or absolute confiscation of goods. **** **** **** 178. It needs hardly any elaboration to find that the prohibition involved in the present matters, of not allowing the imports of the commodities in question beyond a particular quantity, was not a prohibition simpliciter. It was provided with reference to the requirements of balanc....
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....ay down the correct position in law and consequently in the absence of a product being covered under a notification issued either under Section 11 of the Act or one referable to Section 3(2) of the FTDR, it must be recognised to fall outside the ambit of prohibited goods. 107. Mr. Gulati further submitted that, undisputedly, gold and gold articles are classified under Chapter 71 of the Indian Trade Classification based on Harmonized System [ITC(HS)]. It was submitted that during the relevant period all that the ITC (HS) prescribed was that the import of gold would be subject to Reserve Bank of India [RBI] regulation. The learned amicus submitted that significantly the ITC(HS) itself has classified gold as falling in the category of "Free". According to the learned amicus, once the ITC(HS) had placed gold in the category of articles which could be freely imported, there would be no justification to treat the said article as falling in the category of prohibited goods. 108. The learned amicus also invited our attention to the following parts of the Foreign Trade Policy [FTP], 2015-20 and which clearly evidences the intent of the Union Government to declare all imports to be fre....
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....nt and regulation of foreign trade by facilitating imports into, and augmenting exports from, India and for matters connected therewith or incidental thereto. Section 3 of the Act deals with Powers of the Central Government to make provisions relating to imports and exports. Section 3(2) empowers the Central Government to make a provision for prohibiting, restricting or otherwise regulating, in all cases or in a specific class of clauses and subject to such exceptions, if any, as may be made by or under the order the import or export of goods or services of technology, by an order published in the Official Gazette. Section 3(4) of the Act provides that without prejudice to contained in any other law, rules, regulation, notification or order, no permit or licence shall be necessary for import or export of 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. Section 5 of the Act provides that Central Government may from time to time formulate and announce by notification in the Official Gazette, the Foreign Trade Policy and may also amend the same. Thus, the Foreign Trade Policy which has been iss....
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.... of India apply where the gold is imported by nominated banks as notified by Reserve Bank of India and nominated agencies as notified by DGFT. The gold medallions as well as the gold granules fall under CTH 7114 19 10 and 7108 13 00 respectively. It is pertinent to mention here that the Circulars issued by the Reserve Bank of India apply in case the Banks nominated by it import the gold. At this stage, it is pertinent to refer to the relevant extract of communication dated 18-6-2019 sent by State Bank of India to the office of Principal Commissioner of Customs, regarding regulations of Reserve Bank of India for import of gold policy, which reads as under: Custom's query Central Office's reply (a) Whether RBI can regulate import/export of goods in general and more particularly, the import of gold granules. If yes, inform the modalities of regulations. Regulation of imports/exports of any item (including import of gold granules) is in the domain of Ministry of Commerce/DGFT and is governed by the Export-Import Policy/Foreign Trade Policy as prevalent during relevant points in time. Attention is drawn to relevant paras of Foreign Trade Policy 2015-20 (notably Para 2.07, Pa....
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.... 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. This definition therefore, comes in two parts. The first part of the definition explains the term 'prohibited goods' as to mean those goods, import or export of which is subject to any prohibition under the law. The second part is exclusionary in nature and excludes from the term 'prohibited goods', in respect of which the conditions subject to which the goods are permitted to be imported or exported have been complied with. From the definition of term 'prohibited goods', in case of goods, import of which is permitted would be excluded subject to satisfaction of the condition that conditions for export have been complied with. By necessary implication therefore in case of goods, import of which is conditional, would fall within the definition of prohibited goods if such conditions are not complied with. 16. Further clarity in this respect would be available when one refers to the term 'dutiable goods' as to mean any goods which are chargeable to duty and on which duty has not been paid. We refer to this d....
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....th the conditions subject to which goods are to be imported, they are liable for confiscation. "Prohibited goods" has been defined in Section 2(33) of the Customs Act, 1962. The Division Bench held that the provision cannot be narrowly interpreted so as to hold that gold is not an enumerated prohibited goods to be imported into the country. Section 11A(a) defined "illegal import" as meaning the import of any goods in contravention of the provision of the Customs Act or any other law for the time being in force. The Division Bench held that Section 11A cannot be thrown to winds while interpreting Section 2(33) of the Act. If the restrictive conditions set out in the notifications are found to have been breached, the authorities are bound to proceed on the premise that prohibited goods have been imported." 113. The Calcutta High Court in Commissioner vs. Uma Shankar Verma Judgment dt. 10.05.1999 in A.P.O.T No. 105 of 1999 (Cal H.C) has however held that gold is a prohibited item. The relevant extracts from that decision are reproduced hereinbelow:- "11. The principal question which, thus, arises for consideration is as to whether gold is a prohibited item? A Public Notice....
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....n terms of Section 3(3) of the said 1992 Act, there cannot be any doubt whatsoever, that gold would come within the purview of a prohibited item. A legal fiction as is well known must be giving its full effect. In Gajraj Singh & Ors. v. State Transport Appellate Tribunal & Ors. reported in 1997 (1) SCC 650 it has been held as under - "Legal fiction is one which is not an actual reality and which the law recognises and the court accepts as a reality. Therefore, in case of legal fiction the court believes something to exist which in reality does not exist. It is nothing but a presumption of the existence of the state of affairs which in actuality is non-existent. The effect of such a legal fiction is that a position which otherwise would not obtain is deemed to obtain under the circumstances." 16. In Commissioner of Income Tax, Madras v. Urmila Ramesh reported in 1998 (3) SCC 6 the Apex Court observed :- "Even though the word "deemed" is not used in Section 41(2) of the Act, as has been used in Section 10(2) (vii) second proviso of the 1922 Act, nevertheless this provision creates a legal fiction whereby an amount received in excess of the written-down valu....
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....the 1922 Act and Section 41(2) of the Act both create a legal fiction, difference in language notwithstanding." 17. In Aluminium Industries Ltd. v. Collector of Central Excise reported in 1998 (99) E.L.T. 486 (S.C.) = (1998) 9 SCC 404, it has been held as under: - "4. By virtue of this proviso a legal fiction has been created. The price fixed under any law for time being in force has to be taken as the normal price of the goods. In that view of the matter, in the instant case, the price fixed by the notification dated 18-10-1978 will have to be taken as the normal price of the aluminium rods manufactured by the appellant." 18. In this view of the matter the definition of prohibited goods contained in sub-section 2(33) of the said Act pales into insignificance. 19. For the reasons aforementioned there cannot be any doubt whatsoever that gold is a prohibited item which comes within the first part of Section 125 of the Customs Act. 20. Reliance placed by Mr. Kapur upon a decision of the Full Bench of the CEGAT, West Regional Bench, Bombay in Hasmukh Dalpatrai Ganatra & Anr. v. Collector of Customs, Bombay reported in 1987 (30) E.L.T. 782 ha....
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....iff Act. ... (2) The exemption is subject to the following conditions, namely:- the duty shall be paid in convertible foreign currency; the quantity of gold imported in any form shall not exceed ten kilograms per eligible passenger, and the gold is either carried by the eligible passenger at the time of his arrival in India or is imported by him within fifteen days of his arrival in India.... "Explanation : For the purpose of this notification, "eligible passenger" means a passenger of Indian origin or a passenger holding a valid passport, issued under the Passports Act, 1967 (15 of 1967), who is coming to India after a period of not less than six months of stay abroad; and short visits, if any, made by the eligible passenger during the aforesaid period of six months shall be ignored if the total duration of stay on such visits does not exceed thirty days and such passenger has not availed of the exemption under this notification or under the notification being superseded at any time of such short visits." Therefore, the gold brought in could be cleared on payment of a concessional rate of duty if the respondent is an eligible passenger. The respondent is....
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....factors, to understand and to give effect to the meaning of the words, "prohibited goods". 42. Literal interpretation of the words, "prohibited goods" and the contention that gold is not notified and therefore, to be released, would cut down the wide ambit of the inbuilt prohibitions and restrictions in the Customs Act, 1962 and any other law for the time being in force. (i) In Poppatlal Shah v. State of Madras reported in AIR 1953 SC 274, the Supreme Court held that, "It is settled rule of construction that to ascertain the legislative intent all the constituent parts of a statute are to be taken together and each word, phrase and sentence is to be considered in the light of the general purpose and object of the Act itself." (ii) It is well settled that a statute must be read as a whole and one provision of the Act should be construed with reference to other provisions in the same Act, so as to make a consistent enactment of the whole statute. Such a construction has the merit of avoiding any inconsistency or repugnancy either within the statute or between a Section or other parts of the statute. [Ref. Raj Krishna v. Bonod Kanungo reported in AI....
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.... of two meanings, when best effectuating the intention. They are indeed frequently taken in the widest sense, sometimes even in a sense more wide than etymologically belongs or is popularly attached to them, in order to carry out effectually the legislative intent, or, to use Sir Edward Cole's words, to suppress the mischief and advance the remedy." (vii) In Commissioner of Sales Tax v. Mangal Sen Shyamlal reported in (1975) 4 SCC 35 = (1975) 4 SCC 35 : AIR 1975 SC 1106, the Apex Court held that, "A statute is supposed to be an authentic repository of the legislative will and the function of a court is to interpret it "according to the intent of them that made it". From that function the court is. not to resile. It has to abide by the maxim, "ut res magis valiat quam pereat", lest the intention of the legislature may go in vain or be left to evaporate into thin air." (viii) If the words are precise and unambiguous, then it should be accepted, as declaring the express intention of the legislature. In Ku. Sonia Bhatia v. State of U.P., reported in (1981) 2 SCC 585 = (1981) 2 SCC 585 : AIR 1981 SC 1274, the Supreme Court held that a legislature does not ....
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....ke a consistent enactment of the whole statute relating to the subject-matter. The rule of "ex visceribus actus" should be resorted to in a situation of this nature." (xii) In State of Gujarat v. Salimbhai Abdulgaffar Shaikh reported in (2003) 8 SCC 50, the Supreme Court held that,- "Broadly speaking, therefore, an appeal is a proceeding taken to rectify an erroneous decision of a Court by submitting the question to a higher Court....... ........It is well settled principle that the intention of the legislature must be found by reading the Statute as a whole. Every clause of Statute should be construed with reference to the context and other clauses of the Act, so as, as far as possible, to make a consistent enactment of the whole Statute. It is also the duty of the Court to find out the true intention of the legislature and to ascertain the purpose of Statute and give full meaning to the same. The different provisions in the Statute should not be interpreted in abstract but should be construed keeping in mind the whole enactment and the dominant purpose that it may express." (xiii) In A.N. Roy Commissioner of Police v. Suresh Sham Singh reported....
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....y, they become imported goods. At this juncture, it has to be seen, as to whether, such goods are legally or illegally imported, whether they fall within Section 11 of the Customs Act, 1962, which defines, an illegal import as, import of any goods in contravention of the provisions of the Customs Act, 1962 or any other law for the time being in force. Goods imported, contrary to the enumerated subject matters in chapters IV and IV-A of the Customs Act, 1962, which deal with prohibition on importation and exportation goods and detection of illegally imported goods prevention and disposal thereof, more fully described in Sections 11 and 11A of the Act, are also to be treated as prohibited. Goods imported from outside of the territory waters of the country, against any prohibition or restriction under the Customs Act, 1962 or any other law, time being in force, are to be treated as prohibited goods. 79. There is one thing to state that gold is not one of the enumerated prohibited goods and another, to state that goods are not permitted to be brought into the country, by smuggling, which, means any act or omission which would render such goods liable to confiscation under sect....
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....e cannot ignore, the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974, rules framed by way of delegated legislation, like the Baggage Rules, 1998, framed in exercise of the powers conferred under Section 79 of the Customs Act, 1962 or for the matter, Section 77 of the Customs Act, 1962, which mandates, the owner of the baggage for the purpose of clearing the goods, to make a declaration of the contents of the baggage to the proper office and also the customs Notification No. 3/2012, dated 16.01.2012, that only passengers of Indian origin or a passenger in possession of a valid passport, issued under the Passport Act, 1967, who have stayed abroad for six months and above alone are eligible to import gold of foreign origin and clear the same on payment of customs duty, at the rate prescribed." 116. Proceeding then to deal with the prayer for provisional release, the Madras High Court pertinently observed as under:- "93. While considering a prayer for provisional release, pending adjudication, whether all the above can wholly be ignored by the authorities, enjoined with a duty, to enforce the statutory provisions, rules and notifications, i....
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....hat the competent authority, has to arrive at a satisfaction, as to whether, goods seized and liable for confiscation, can be released provisionally, pending adjudication, and in that context, the role of the Courts, in exercise of the powers, under Article 226 of the Constitution of India, should be confined only to test such satisfaction, arrived at, by the competent authority, with regard to the objects of the Customs Act, 1962 and any other law for the time being in force. When the competent authority, under the Customs Act, 1962, makes a plea that there is a prima facie case of smuggling and that the appellant has failed to discharge the burden, in terms of Section 123 of the Customs Act and when the adjudication proceedings are pending, we are of the considered view that it would be appropriate to direct provisional release? **** **** **** 100. Going through the material on record, and in the light of the decisions considered, in particular, Om Prakash Bhatia's case (cited supra), we are of the considered view that the discretion exercised by the competent authority, considering the objects of the Customs Act, 1962, or any other l....
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....etween 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", in relation to goods, means any act or omission which will render such goods liable to confiscation under Section 111 or Section 113 of the Act. **** **** **** 17. The notification issued by the Central Government in exercise of the powers conferred by Section 25(1) of the Act exempts the articles enumerated in the Table annexed when imported into India from payment of duty under the Act. The language used in the notification is plain and unambiguous. Therefore, we are required to consider the same in their ordinary sense. A construction which permits one to take advantage of one's own wrong or to impair one's own objections under a statute should be disregarded. The interpretation should as far as possible be beneficial in the sense that it should suppress the mischief and advance the remedy without doing violence to the language. From the wording of the above exemption notification, it is clear that the benefit of the exemption envisaged is for those goods that are....
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....uggest 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 representing the Customs. However, the said contention as broadly addressed may not be a correct reading of Amba Lal for reasons which are recorded hereinafter. It becomes pertinent to note that the Act defines imported goods to mean any goods which are brought into India from a place outside. Undisputedly, the rough diamonds which formed the subject matter of consideration in Amba Lal had been imported. The principal question which however arose for the consideration of the Supreme Court was whether the importer could avail the benefits of the exemption notification once it had been found that the goods had been smuggled. It was in the aforesaid context that the Supreme Court observed that the since the goods had been smuggled into India, it would be antithetical and "contrary to the purpose of the exemption notifications to accord the benefit meant for imported goods on smuggled goods." What Amba Lal seeks to espouse as a principle is the imperative of import conditions being st....
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....r, such goods are legally or illegally imported, whether they fall within Section 11 of the Customs Act, 1962, which defines, an illegal import as, import of any goods in contravention of the provisions of the Customs Act, 1962 or any other law for the time being in force. Goods imported, contrary to the enumerated subject matters in chapters IV and IV-A of the Customs Act, 1962, which deal with prohibition on importation and exportation goods and detection of illegally imported goods prevention and disposal thereof, more fully described in Sections 11 and 11A of the Act, are also to be treated as prohibited. Goods imported from outside of the territory waters of the country, against any prohibition or restriction under the Customs Act, 1962 or any other law, time being in force, are to be treated as prohibited goods. 52. There is one thing to state that gold is not one of the enumerated prohibited goods and another, to state that goods are not permitted to be brought into the country, by smuggling, which, means any act or omission which would render such goods liable to confiscation under section 111 or section 113. There may not be total prohibition for import of goods, ....
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....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 force, then import of gold, in contravention of the above, is prohibited. For prohibitions and restrictions, Customs Act, 1962, provides for machinery, by means of search, seizure, confiscation and penalties. Act also provides for detection, prevention and punishment for evasion of duty. 58. The expression, 'subject to prohibition in the Act and any other the law for the time being in force.' In Section 2(33) of the Customs Act, has wide cannotation and meaning, and it should be interpreted, in the context of the scheme of the Act, and not to be confined to a narrow meaning that gold is not an enumerated prohibited good to be imported into the country. If such narrow construction and meaning have to be given, then the object of the Customs Act, 1962, would be defeated. 59. The Provisions in the Customs Act, 1962, dealing with prohibition/restriction or any other law for the time in for....
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....ngers 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 position emerges. The Circular of CBEC dated 10 May 1993 takes note of the fact that while gold may not be included in the list of prohibited items in the import policy, its import clearly fell in the restricted category of goods. It also took note of the restriction of its import being allowed only against a license and in accordance with any public notice that may have been issued. 124. Our attention was then invited to the Notification of 28 January 2004 issued by the Ministry of Commerce and Industry which had taken note of the Export and Import Policy 2002-07 while dealing with the subject of import of gold and the amendments which were sought to be introduced in the import policy. Gold which fell under Exim Code 7108 while declared to be free was provided to be subject to RBI regulations. Para 3 is extracted hereinbelow:- "3. After amendment the following entries ....
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.... 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, silver and platinum to small jewellery exporters, DGFT has included 5 more new agencies/entities as "nominated agencies" for import of gold/silver/platinum (hereinafter referred as the "precious metal"). Now the nominated agencies are as under: (1) Metals and Minerals Trading Corporation limited (MMTC); (2) Handicraft and Handloom Export Corporation (HHEC); (3) State Trading Corporation (STC); (4) Project and Equipment Corporation of India Ltd (PEC); (5) STCL Ltd; (6) MSTC Ltd; (7) Diamond India Limited (DIL); (8) Gems & Jewellery Export Promotion Council (G&J EPC); (9) A Star Trading House (only for Gems & Jewellery sector) or a Premier Trading House under paragraph....
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....n 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 agency has not been served with a show cause notice or no demand confirmed against it, during the preceding 3 years, for violations invoking fraud or collusion or any wilful mis-statement or suppression of facts under relevant provisions of the Customs Act, 1962, the Central Excise Act, 1944, the Finance Act, 1994 covering Service Tax, the Foreign Trade (Development & Regulation) Act, 1992, the Foreign Exchange Management Act, 1999 and the rules made thereunder, (v) the Commissioner of Customs may allow more than one Nominated Agencies to keep their imported goods in the same vault provided the quantities are kep....
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....n 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 Nominated Agencies will settle their claim with the exporter at their own level; (xiv) the Nominated Agencies shall report the cases of failure, to export the jewellery made out of precious metal released to the exporter, to the Commissioner of Customs in whose jurisdiction the licensed vault of the Nominated Agencies is installed; and (xv) the exporters operating under replenishment scheme may be permitted to receive precious metal from the Nominated Agencies on submission of EP copy of the shipping bill Nominated agencies shall also monitor the ....
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....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 of India or the Minerals and Metals Trading Corporation Ltd., subject to the conditions 1; provided such eligible passenger files a declaration in the prescribed form before the proper officer of customs at the time of his arrival in India declaring his intention to take delivery of the gold or silver from such a customs bonded warehouse and pays the duty leviable the....
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....anks 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 gold imports by the nominated agencies (other than the nominated banks)/ EOUS/ SEZS in Gem & Jewellery sector during the month under report as well as the cumulative position as at the end of the said month beginning from the 1st month of the Financial Year, as per Annex '4'. B....
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....ing 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 permitted to be imported only by the agencies notified by DGFT, which as of now are as follows: i. Metals and Minerals Trading Corporation limited (MMTC); ii. Handicraft and Handloom Export Corporation (HHEC); ....
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....ayment 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 defaulted in following the procedure and condition specified....
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....uthorities 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 inspect....
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....stoms officer at the port from where gold dore bars are imported 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 ....
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.... Exim Code Item Description Policy Policy Conditions Revised Policy Conditions 7108 00 12 Other unwrought forms 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....
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....rought forms Restricted Import is allowed only through nominated agencies as notified by RBI (in case of banks) and DGFT (for other agencies). Gold dore can be imported by refineries against a license with AU conditions. Import 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 u....
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....of import may be either absolute or be subject to the fulfilment of such conditions as may be prescribed. 136. We also take note of the significance of Section 111 of the Act which deals with the confiscation of improperly imported goods. While dealing with the circumstances 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 encaps....
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....import or export of goods shall be prohibited except in terms of the provisions of the FTDR or the rules and orders made thereunder. It was emphasised that the overarching effect of sub-section (4) which is clearly evident from the Legislature having employed the phrase "without 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 declari....
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....wn in Sheikh Md. Omar or Om Prakash Bhatia cannot be said to have fallen under a cloud of doubt by the mere introduction of sub-section (4) in Section 3 of the FTDR. 145. In summation, we note that Section 2(33) of the Act while defining prohibited goods firstly brings within its dragnet 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 bei....
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....oper import and thus liable for confiscation. In Sheikh Mohd. Umer, the Supreme Court has clearly expounded upon the correct meaning to be assigned to the expression "prohibited goods". We find ourselves unconvinced to doubt the correctness of the view so expressed even when tested against the 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....
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....missioner of Customs. The question which was raised and placed for the consideration of SBI's, Central Office was whether RBI could regulate the import/export of goods "in general". While responding to that query, the Central Office of SBI is stated to have observed that the regulation of import or export 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 w....
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.... in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing, or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation under section 111, shall be liable,- (i) in the case of goods in respect of which any prohibition is in force under this Act or any other law for the time being in force, to a penalty 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 unde....
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....hereon under section 28AB, and twenty-five per cent. of the consequential increase in penalty have also been paid within thirty days of the communication of the order by which such increase in the duty or interest takes effect: Provided also that where any penalty has been levied under this section, no penalty shall be levied under section 112 or section 114. Explanation.-For the removal 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; ....
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....tps://sansad.in/ls/questions/questions-and-answers. 9. The case of Union of India v. Agricas LLP, (2020) SCC OnLine SC 675 was one where the constitutional validity of the notification issued by the Central Government under Section 3 of the FTD&R Act was assailed for imposing quantitative restrictions on import of Peas and Pulses. 10. The case of Hargovind Dass K. Joshi v. Collector of Customs was one where the appellants had imported a consignment of 'Zip Fastners', which 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 spec....
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....in such fund transfers;] (q) the circumstances in which, and the conditions and limitations subject to which, the value of any lost, stolen, mutilated or imperfect currency note of the Government of India or bank note may be refunded; and (r) generally, for the efficient conduct of the business of the Bank. 7[(3) Any regulation made under this section shall have effect from such earlier or later date as may be specified in the regulation. (4) Every regulation shall, as soon as may be after it is made by the Central Board, be, forwarded to the Central 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, th....