TaxTMI 
TaxTMI 
2023 (10) TMI 451
X X X X Extracts X X X X
X X X X Extracts X X X X
.... by name Shri Muhamed Nisham an Indian passport holder Bearing No. K1250928, would be smuggling gold through Chennai International Airport arriving by Saudi Airlines flight SV 778 from Riyadh via Dubai on 12.02.2015, the officers of DRI (Directorate of Revenue Intelligence), Chennai intercepted Shri Muhamed Nisham, occupying the seat No. 34 H, on the aero bridge. The modus operandi, as per the investigation, indicated that the said passenger would handover/drop the contraband at the toilet in the immigration hall for its retrieval and clearance without declaring to Customs and without payment of appropriate customs duty. 2.3 A scrutiny of the Customs Disembarkation Form (Declaration Form) indicated that "nothing' was mentioned against the column "Total value of goods imported'. According to the investigation, the appellant replied in the negative, when the officers enquired with him as to whether he brought any gold bars. On repeated enquiry, the appellant / passenger has admitted that he was in possession of four 1 kg gold bars with "FG marking, FUJAIRAH GOLD, UAE, FINE GOLD, 995.0, 1000g' etched on them with serial Nos. B002045, B002046, B002049 and B002061. 2.4 Shri Gopi A....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of Indian origin or a passenger holding a valid passport issued under the Passports Act, 1967 (15 of 1967) subject to the following conditions, namely :- (a) that the passenger importing the gold is coming to India after a period of not less than six months of stay abroad; (b) the quantity of gold imported shall not exceed 5 Kilograms per passenger; (c) import duty on gold shall be paid in convertible foreign currency " 2.8 Further, in terms of EXIM Code 98030000 under ITC (HS) classification of Export and Import Items 2009-2014, Import of all dutiable articles by a passenger in his baggage is "Restricted" and is subject to the fulfillment of the conditions imposed under the Customs Act, 1962, the Baggage Rules, 1998 and the Foreign Trade (Exemption from Application of Rule in Certain Cases) Order, 1993. 2.9 Further, according to Notification No. 12/2012-Cus dated 17.03.2012 (Sl. No. 321), gold bars, other than tola bars, bearing manufacturer's or refiner's engraved serial number and weight expressed in metric units, and gold coins having gold content not below 99.5%, imported by the eligible passengers; and gold in any form Including tola bars and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....is pocket and there was no concealment and the gold was handed over on enquiry by the officers. The events would indicate that there is no concealment. 3.3 After his interception, tremendous pressure was brought by the investigation officer who threatened him with slapping of COFEPOSA and he was compelled to give a statement under Section 108 of the Customs Act, 1962. 3.4 Due to continuous threat of arrest and preventive detention, he could not file any retraction to his statement. 3.5 The Adjudicating authority has issued the call letter dated 07.11.2015 intimating about the personal hearing which was fixed on 23.11.2015, 27.11.2015 or 30.11.2015 which was not in agreement with legal prescriptions that he could not avail the personal hearing as there was a flood in Chennai. As his inability was communicated telephonically to the officers, the adjudicating authority passed the Order-in-Original having 16 pages on the last date of the personal hearing itself which makes the order passed preconceived, predetermined and a programmed product without application of mind. As the impugned order has been issued without affording reasonable opportunity of being heard, the same is a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd due to floods in Chennai. 4.2 The Ld. Advocate has relied upon the decision rendered by the CESTAT Principal Bench New Delhi in the case of Commissioner of Customs Vs. Ashwini Kumar Alias Amanullah [2021 (376) ELT 321 (Tri.- Del.)] in support of his contention, for release of the gold on payment of duty which was seized from the appellant. He has also referred to the decision given by the Chennai Tribunal in the case of Shri Rajan Ran and Shri Vasu Arumugam Vs. Commissioner of Customs vide Final Order Nos. 40148-40149/2022 dated 25.04.2022. 4.3 The Ld. Authorised Representative Shri Harendra Singh Pal asserted the findings of the impugned order. He has submitted that the appellant / passenger is not an eligible passenger and a frequent flyer. In the statement given in his own hand writing before the officers which was recorded under Section 108, the passenger had admitted that he has attempted to smuggle the impugned gold for a consideration of Rs.25,000/- on behalf of one person by name Shri Mubash who was working in Dubai and who also hails from his native place and the officers coming to know of the intelligence, the appellant was intercepted on the Aerobridge itself as....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... smuggling in relation to any goods means any act or omission which will render such goods liable for confiscation under Section 111 or Section 113 of the said Act. Improperly imported goods are liable for confiscation under Section 111 which reads as follows : "SECTION 111. Confiscation of improperly imported goods, etc. - The following goods brought from a place outside 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 und....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (p) any notified goods in relation to which any provisions of Chapter IVA or of any rule made under this Act for carrying out the purposes of that Chapter have been contravened.' 7.2 The appellant has not challenged the confiscation of the gold attempted to be smuggled into the country. It is also an admitted fact that he is not an eligible passenger. A perusal of the statement recorded under Section 108 of the Customs Act, 1962, in his own handwriting clearly indicate that he carried the gold for a promised consideration of Rs.25,000/- by Shri Mubash due to his family circumstances. At the relevant time, even an eligible passenger can legally bring only one kilogram of gold provided applicable duty is paid in convertible foreign currency. At the time of interception, he was found with 4 Kgs of gold and not required foreign currency towards the duty payment. He was found to be a frequent flyer to Dubai as admittedly he was travelling to Dubai since 2012 and returning to different Airports in to the country. Being an educated person and also due to frequent trips abroad, it is reasonable to draw an inference that he must be aware of the rules and procedures for carrying go....
X X X X Extracts X X X X
X X X X Extracts X X X X
....(2) Where any fine in lieu of confiscation of goods is imposed under sub-section (1), the owner of such goods or the person referred to in sub-section (1), shall, in addition, be liable to any duty and charges payable in respect of such goods. (3) Where the fine imposed under sub-section (1) is not paid within a period of one hundred and twenty days from the date of option given thereunder, such option shall become void, unless an appeal against such order is pending. Explanation. - For removal of doubts, it is hereby declared that in cases where an order under sub-section (1) has been passed before the date on which the Finance Bill, 2018 receives the assent of the President and no appeal is pending against such order as on that date, the option under said sub-section may be exercised within a period of one hundred and twenty days from the date on which such assent is received'. 7.5 From the above, it is clear, the Adjudicating Authority has no discretion in respect of goods which are not prohibited goods and he is bound to give an option of redemption. In case of prohibited goods, such as, the gold in this case, the Adjudicating Authority may allow redemption....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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 whom 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. 7.8 The appellant has advanced a plea that there was no mis-declaration or concealment on his part and he should be given an opportunity to declare and pay appropriate Customs duty on the gold brought by him. He has submitted that he has availed loans from his friends to purchase this gold and his intention was to sell to the jewellery manufacturers in the country.....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... contention that he should be given an opportunity to redeem the gold brought by him on payment of fine and penalty. 7.10 His main argument is that he was not allowed to declare the imported gold having been intercepted at the Aerobridge itself that he was denied an opportunity to declare and pay duty. The Ld. Advocate for the appellant has vehemently put forth that the impugned gold should be released on payment of applicable Customs duty having recorded the statement under threat of COFEPOSA and the original adjudicating authority having violated the principles of natural justice by fixing three dates for personal hearing through a single letter which he could not avail due to the flood situation in Chennai. 7.11 We have perused the decisions. In the case of Rajan Ran (supra), the passenger was intercepted and gold was recovered while he was going through the green channel. The passenger was found to be an eligible passenger and also in a possession of adequate foreign currency for payment of the duty on the imported gold. Whereas in this case, the appellant is not an eligible passenger, he could not have been able to declare and clear as at that relevant time even an eligi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on fine and duty, Learned Standing Counsel appearing for the Department relied on the judgment of the Supreme Court in Om Prakash Bhatia v. Commissioner of Customs, Delhi reported in 2003 (155) E.L.T. 423, and contended that when import is permissible on satisfaction of certain conditions, the violation of the same will make the goods imported as prohibited goods within the meaning of Section 2(33) of the Act, which reads as follows :- "2(33) 'Prohibited goods' means any goods the import or export of which is subject to any prohibition under this Act or any other law for the time being in force but does not include any such goods in respect of which the conditions subject to which the goods are permitted to be imported or exported have been complied with.' 6. After hearing both sides and after considering the statutory provisions, we do not think the appellant, as a matter of right, can claim release of the goods on payment of redemption fine and duty. Even though gold as such is not a prohibited item and can be imported, such import is subject to lot of restrictions including the necessity to declare the goods on arrival at the Customs Station and make payment of....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... No convincing reason has been given for coming to Chennai or going to other places when he belongs to Kerala. Being a frequent flyer, his narration of picking up gold in Dubai from an unknown person to be delivered to an unknown person in men's toilet and his interception with the gold confirmed the modus operandi of smuggling. So, we uphold the decision of the adjudicating authority's decision on absolute confiscation of the smuggled gold in the instant case. 9.1 Having rendered the gold liable for confiscation by his various acts of commission and omission, the appellant is liable for penal action under Section 112 of the Customs Act, 1962. The appellant was imposed with penalties under Section 112 and also 114AA of Customs Act, 1962 by the impugned order No. 364/2015 dated 30.11.2015. Section 112 and 114AA of the Customs Act, 1962, reads as follows:- "112. Penalty for improper importation of goods, etc. - Any person, - (a) who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under section 111, or abets the doing or omission of such an act, or (b) who acquires possession of o....