TaxTMI 
TaxTMI 
2023 (9) TMI 1263
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....stoms Act, 1962; 69.3 I impose penalty of Rs.5,00,000/- (Rs. Five Lakhs Only) upon Noticee Waqar S/o Shri Mohammad Yusuf R/o. 1247, Ganj Mir Khan, Rakabganj, Near Delite Cinema, Delhi-110002 under Section 112(b) of the Customs Act, 1962; 69.5 I impose penalty of Rs.4,00,000/- (Rs. Four Lakhs Only) upon Noticee Waqar S/o Shri Mohammad Yusuf R/o. 1247, Ganj Mir Khan, Rakabganj, Near Delite Cinema, Delhi-110002 under Section 114AA of the Customs Act, 1962." 2.1 Appellant was intercepted by the AIU Officers posted at Airport, Lucknow. On a search of the appellant, it was found that he had concealed 15 gold bars in his shoes and socks which were recovered in the presence of independent Panchas. As per the government approved valuer Shri Rajesh Kumar Gupta, these bars were made of gold weighing 1749.60 grams and values at Rs.48,37,644/-. The gold bars were seized under the responsible belief that these are liable for confiscation under Section 111 (i), (l) & (m) of Customs Act for contravening various provisions of Customs Act, 1962 read with Baggage Rules, 1998. The shoes, shocks and other packing materials used for concealing were also seized. Accordingly, a show c....
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....1999 (106) E.L.T. 485 (Tribunal)]. • UMA SHANKAR VERMA [2000 (120) E.L.T. 322 (Cal.)]. • DHANAK MADHUSUDAN RAMJI [(237) E.L.T. 280 (Tri. Mumbai)]. • Mohd. Ashraf Armar [2019 (369) E.L.T. 1654 (Tri. - Mumbai)]. • Commissioner of Customs (Preventive) Jodhpur filed the civil writ petition bearing no. 5640/2019 before the Hon'ble Rajasthan High Court. • Prakash Chandra Shantilal [2013 (290) E.L.T. 125 (TRI. - AHMD.)]. • Access World Wide Cargo [2022 (379) E.L.T. 120 (Tri. - Bang.)]. • Jitender Singh 2019 (369) ELT 1683 (G.O.I.). • In view of the above, he submits that goods may be allowed to be redeemed on payment of redemption fine. • He prays that the penalty imposed under Section 114AA cannot be justified, as he has not filed any document nor asked to file any document with intention to evade payment of duty. • Accordingly, his appeal be allowed to the above extant. 3.3 Arguing for the revenue the Authorized Representative reiterates the findings of the Original Authority. 4.1 I have considered the impugned order along with the submissions made ....
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....ication of the said provision, it is required to be established that attempt to export the goods was contrary to any prohibition imposed under any law for the time being in force. 8. Further, Section 2(33) of the Act defines "prohibited goods" as under :- "prohibited goods" means any goods the import or export of which is subject to any prohibition under this Act or any other law for the time being in force but does not include any such goods in respect of which the conditions subject to which the goods are permitted to be imported or exported have been complied with." 9. From the aforesaid definition, it can be stated that (a) if there is any prohibition of import or export of goods under the Act or any other law for the time being in force, it would be considered to be prohibited goods; and (b) this would not include any such goods in respect of which the conditions, subject to which the goods are imported or exported, have been complied with. This would mean that if the conditions prescribed for import or export of goods are not complied with, it would be considered to be prohibited goods. This would also be clear from Section 11 which empowers the Cen....
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....s absolutely and refused to allow redemption. The Tribunal granted redemption of the goods on payment of fine which was set aside by the High Court on an appeal by the Commissioner, who justified the absolute confiscation. The Division Bench considering the decision of the Supreme Court in Om Prakash Bhatia v. Commissioner of Customs - 2003 (6) SCC 161 = 2003 (155) E.L.T. 423 (S.C.) came to the conclusion that the prohibition in terms of Section 2(33) of the Customs Act, 1962 was attracted in a case of this nature. Therefore, absolute confiscation was justified. This order of the Division Bench was taken up on appeal to the Supreme Court in Special Leave to Appeal (Civil) No. 22072 of 2009 [2010 (254) E.L.T. A15 (S.C.) and the Special leave Appeal was dismissed holding as follows :- ''Applying the ratio of the judgment in the case of Om Prakash Bhatia v. Commissioner of Customs, Delhi reported in 2003 (6) S.C.C. 161, to the facts of the case, we find that, in the present case, the assessee did not fulfil the basic eligibility criteria, which makes the imported item a prohibited goods; hence, we see no reason to interfere with the impugned order. The special leave petition ....
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....old released on payment of redemption fine and duty under Section 125 of the Act." 63. As per Section 123 of Customs Act, 1962, in the case of 'gold', the burden of proof that the imported gold was not smuggled was on the carrier of the gold, from whose possession the goods were seized. As per Section 2(39) of the Customs Act, 1962, "smuggling, in relation to any goods, means any act or omission which will render such goods liable to confiscation under section 111 or section 113." In this case, the burden was on the Noticee, who has utterly failed to discharge it. It is pertinent to mention here that there is specific purpose behind providing a very small list of items under Section 123 & gold figures with specific mention under section 123(2) of the Act where the burden of proof is on the importer. This indicates that the Government recognizes that the smuggling of gold is widespread and wants to discourage the smuggling of gold into India. 64. In light of the above legal scenario and judicial interpretations, the smuggled gold is ordered to be confiscated with no option to redeem the same on payment of redemption fine. 65. As the impugned 1....
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....trative instruction is not a statutory Rule nor does it have any force of law; while statutory rules have full force of law provided the same are not in conflict with the provisions of the Act. (Vide State of U. P. and Ors. v. Babu Ram Upadhyaya, AIR 1961 SC 751; and State of Tamil Nadu v. M/s. Hind Stone etc., AIR 1981 SC 711). 8. In Union of India v. Sri Somasundaram Vishwanath, AIR 1988 SC 2255, the Hon'ble Apex Court observed that if there is a conflict between the executive instruction and the Rules framed under the proviso to Article 309 of the Constitution, the Rules will prevail. Similarly, if there is a conflict in the Rules made under the proviso to Article 309 of the Constitution and the law, the law will prevail. 9. Similar view has been reiterated in Union of India v. Rakesh Kumar, AIR 2001 SC 1877; Swapan Kumar Pal and Ors. v. Samitabhar Chakraborty and Ors., AIR 2001 SC 2353; Khet Singh v. Union of India, (2002) 4 SCC 380; Laxminarayan R. Bhattad and Ors. v. State of Maharashtra and Anr., (2003) 5 SCC 413; and Delhi Development Authority v. Joginder S. Monga, (2004) 2 SCC 297, observing that statutory rules create enforceable rights which c....
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....if the conditions prescribed for import or export of goods are not complied with, it would be considered to be prohibited goods. This would also be clear from Section 11 which empowers the Central Government to prohibit either 'absolutely' or 'subject to such conditions' to be fulfilled before or after clearance, as may be specified in the notification, the import or export of the goods of any specified description. The notification can be issued for the purposes specified in sub-section (2). Hence, prohibition of importation or exportation could be subject to certain prescribed conditions to be fulfilled before or after clearance of goods. If conditions are not fulfilled, it may amount to prohibited goods. This is also made clear by this Court in Shekih Mohd. Omer v. Collector of Customs, Calcutta and Others [(1970) 2 SCC 728] wherein it was contended that the expression 'prohibition' used in Section 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. The Court negatived the said contention and held thus :- '...What clause (d) of Section 111 s....
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....nd also the fact that this was the second case belonging to the same exporter, the authorities arrived at the conclusion that it was an organized racket to claim fraudulent drawback or an act of deliberate over-invoicing the readymade garments. Hence, the authority imposed redemption fine as well as levied penalty. In our view, this finding arrived at by the authorities below cannot be said to be, in any way, unreasonable which would call for interference by this Court in this appeal." 4.5 The sections under which the gold has been held liable for confiscation are the sections in which the goods become prohibited for the reason of misdeclaration or any other violation of the provisions of Custom Act,1962. Thus adjudicating authority has held that the gold does not fall under the category of prohibited goods for the reasons of prohibition imposed under Custom Act or any other law, but the confiscation is for the case of non-declaration or miss-declaration of the same to the Customs Authorities by the passenger in an appropriate manner. In my view, in such cases the gold could have been allowed to be redeemed by the appellant on payment of redemption fine. In the case of Comm....
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.... 125 thus provides that whenever confiscation of any goods is authorized by the Act, the officer adjudging it, the importation or exportation of goods which is prohibited may and shall in other cases offer an option to pay fine in lieu of confiscation. It is in this context that the counsel for the department has argued that the case falls under the first part of sub-section (1) of Section 125. In a recent judgment dated 17.02.2022 Division Bench of this Court has considered a very similar issue. It was a case in which the assessee had attempted to smuggle gold by concealing it in his handbag and not declaring the same upon arrival at the international airport. The authorities had provided absolute confiscation of gold and also imposed penalties. In the context of interpretation of Section 125 of the Customs Act, this Court held as under:- "15.The second area of concern is applicability of Section 125 of the Act. Sub-section (1) of Section 125 provides that whenever confiscation of any goods is authorised by the Act the officer adjudging it may in the case of any goods, the importation or exportation whereof is prohibited under the Act or under any other law for t....
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....nt the benefit or not so far as goods whose import is prohibited but no such option is available in respect of goods which can be imported, but because of the method of importation adopted, become liable for confiscation........." 16. This view may seem incongruent with the view expressed by Gujarat High Court in case of Bhargavraj Ramesh kumar Mehta (supra) which we have also followed in this judgment but flavours of Section 112 and 125 of the Customs Act are entirely different. Section 112 of the Act pertains to penalty for improper importation of goods. Section 125 on the other hand pertains to option to pay fine in lieu of confiscation. As noted sub-section (1) of Section 125 comes in two parts. Whenever confiscation of goods is authorized under the Act, as per sub-section (1) of Section 125 the adjudicating officer has a discretion to offer redemption fine in lieu of confiscation in case of goods importation or exportation whereof is prohibited. In all other cases there is a statutory mandate on the adjudicating officer to offer such redemption fine. If the interpretation of Section 112 and 125(1) is not reconciled as above, this latter portion of sub-section (1) of S....
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....quired to pay Customs duties as applicable as per Section 125 (2) of the Customs Act. Since the case under consideration is a case where the goods sought to be imported as baggage, the applicable rate of duty will be the baggage rate of duty, which is much higher than the normal rate of duty applicable to the same goods. This fact has been taken into consideration while determining the quantum of redemption fine. 4.7 Section 114AA of Customs Act, 1962 is reproduced below: "Section 114AA. Penalty for use of false and incorrect material. - If a person knowingly or intentionally makes, signs or uses, or causes to be made, signed or used, any declaration, statement or document which is false or incorrect in any material particular, in the transaction of any business for the purposes of this Act, shall be liable to a penalty not exceeding five times the value of goods." From the plain reading of Section 114AA it is evident that penalty under this section can be imposed on a person who intentionally makes, signs or uses, or causes to be made, signed or used, any declaration, statement or document which is false or incorrect in any material particular for the ....