TaxTMI 
TaxTMI 
2020 (12) TMI 1396
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.... on behalf of Government of India, in so far as penalty under section 112(b) of confiscation of Aluminum Coated Gold Wires allegedly seized vide Panchnama dated 27.4.2014, is confirmed (Annexure-E). C. Drop the penalty imposed under section 112(b) of Customs Act, 1962, or alternatively, reduce the same to a reasonable amount, D. Release and return back to the petitioner the impugned goods (Aluminum Coated Gold Wire) in terms of section 125(1) of Customs Act, 1962, allowing the same to be re-exported. E. Grant any other relief/further reliefs as deemed in the interest of the justice, may please be granted." 2. We may borrow the facts giving rise to this writ-application straightway from the facts recorded in the Order in Original passed by the Joint Commissioner, Customs, Ahmedabad. The noticee referred to herein under is the writ-applicant before us. We quote it as under : "A passenger namely Shri Abdul Husain Saifuddin Hamid (hereinafter referred to as "the noticee") holding Indian Passport No.Z2510189 and residing at 20/595 Hindu Mochi Mohalla, Paani Gram Chowk, Sadar Kotwali, Ajmer, Rajasthan, presently residing at 5264/14, Al-Samal State, ....
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....oated wire, a yellow coloured metal which appeared to be gold, was seen. 1.4 All the Aluminium powder coated wires, appearing to be Gold wires totally weighing 1753.54 grams, were removed from the two bags of the noticee. 1.5 The Government Approved Valuer, Shri Soni Kartikey Vasantrai was called for examining the authenticity and valuation of the said goods, who tested the said Aluminium powder coated Gold Wires and confirmed that all the said wires were of pure Gold having purity of 995 and totally weighed 1753.540 grams, valued at Rs.52,60,620/- (Local Market Value) and Rs.45,95,116/- (Tariff Value). 1.6 The noticee vide his statement dated 27.04.2012 had confessed before the panchas that he had concealed Gold in his two bags i.e. one hand bag and another in check-in bag; that the bags were handed over to him by Shri Murtaza Merchant (his brother in-law); that a message received from Murtaza Merchant Mobile (No.+971503596077) on his mobile (No.09993122052) that "Jeetubhai's person coming from Baroda to receive the bags; that the two bags were to be handed over to Jeetubhai Soni having mobile No. 09407461148. During the Panchnama a phone call was receiv....
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....tropolitan Magistrate, Ahmedabad and sent to judicial custody at Sabarmati jail, Ahmedabad till 28.04.2014. 1.10 Statement of the noticee was recorded on 27.04.2014 under section 108 of Customs Act, 1962, wherein he stated that he did not know about the gold wires as he got empty bags, i.e., one hand bag and second Trolley Bag from his brother-in-law, Shri Murtaza Merchant residing at Deira Dubai; he had received a message from his brother-in-law, through mobile No. 97150596077 that Jeetubhai's person coming from Baroda to receive the bags; the said two bags i.e. one hand bag and another check-in bag were to be delivered to Jeetubhai Soni having Mobile No.9407461148; he had also received a phone call from Jeetubhai Soni to deliver the said 2 bags to the person namely KK, who was coming from Vadodara. In between a call from mobile no.09879112276 introducing himself as Kanubhai H.Soni was received who asked him where to receive the bags. He accepted that he has visited India six times, since 11.06.2013 to 21.03.2014, as shown in the panchnama. On being asked about the said gold wires he stated that he did not know about the said gold wires; that he was coming to Ahmedabad to....
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.... main customers are sonis (goldsmiths) located at nearby villages of Vadodara city; his three sons are also engaged in the business. He was shown panchnama dated 27.04.2014 and he agreed with its contents. He further stated that on 27.04.2014 about 07.30 hrs he came to Ahmedabad for social work and thereafter about 09.00 hrs reached Shambu's Coffee Bar near Indira Bridge, Ahmedabad to receive two bags from Shri Abdul Hussain Saifuddin Hamid after contacting him on his cell phone No.09993122052. Upon being asked whether he knew Shri Abdul Hussain Saifuddin Hamid he stated that he did not know him or never come in touch with him in the past; he came to take delivery of the two bags from him on the direction given by Shri Jeetubhai Soni from his cell phone No.09407461148. Regarding Shri Jeetubhai Soni, he stated that he was residing at Ali Rajpur, Near Gujarat Border, Madhya Pradesh and looking after two jewellery shops at Ali Rajpur, viz. Payal Jewellers, etc. since the last four years whose owner was Shri Chandubhai Soni, and was presently at Australia on tourist visa for two months; he came to know Shri Jeetubhai Soni since last one year through his relative whose name he did n....
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....were attempted to be smuggled into India without declaring and without discharging duty payable thereon. 1.16 From the facts and circumstances discussed herein above, it appeared that the noticee was involved in the smuggling of Gold from Dubai into India, with a malafide intention to evade the payment of Customs duty. It further appeared that the said Gold totally weighing 1753.54 grams was brought for commercial purpose. Thus, the Gold brought in by the noticee cannot be construed as "bonafide baggage" within the meaning of section 79 of the Customs Act, 1962 read with para 2.20 of Foreign Trade Policy (2004-2009). As per para 2.20 of the Foreign Trade policy, formulated under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992, "a passenger is allowed to import bonafide household goods and personal effect only, as his bonafide baggage. Import of goods in commercial quantity with intent to earn profit is not covered under the ambit of bonafide baggage and hence the import of such goods is not permitted through baggage mode", Therefore, it appeared that the noticee attempted to smuggle the above said goods without declaring it in the dis-embarkation slip....
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.... whether he was carrying any dutiable goods to which he replied in negative. However, he concealed the said goods totally weighing 1753.54 gms and did not disclose the same in the Indian Customs Declaration Form submitted by him. From the above, it is evident that the noticee had intentionally signed wrong declaration in order to evade the payment of customs duty and hence also made himself liable for penalty under Section 114AA of the Customs Act, 1962. 3. The aforesaid led to issue a show-cause notice under Section 124 of the Customs Act, 1961, calling upon the writ-applicant to show-cause as to why : "(i) The 1753.54 grams Aluminum Coated Gold Wire valued at Rs.52,60,620/- (Market Value) & Rs.45,95,116/- (Tariff Value}, placed under seizure under panchnama dated 27.04.2014, should not be confiscated under Section 111(l) and 111(m) of the Customs Act, 1962; (ii) The packing material, viz. 2 nos. of broken bags used for concealment of the said goods, having no commercial value, placed under seizure under panchnama dated 27.04.2014 should not be confiscated under Section 118(a) and 119 of the Customs Act, 1962; (iii) Penalty should not be imposed on hi....
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....lieve are liable to confiscation under Section 111, he is liable for penalty under Section 112(b) of the Customs Act, 1962. Also by the act of furnishing the disembarkation slip without declaring the dutiable goods under his possession, the appellant made himself liable for penalty under Section 114AA of the Customs Act, 1962. 8. The appellant contended that since the gold wires in question are not prohibited item for the purpose of import, the same could not have been absolutely confiscated; gold is not a prohibited item for import as evident from perusal of list of prohibited items for import, therefore the gold in question may be released. I find that in this case the appellant returned to India within thirty seven days (approx.), hence he did not qualify as an eligible person to import gold and therefore the seized items are liable for absolute confiscation. I also find that as per the judgment of Hon'ble High Court in the case of Samynathen Murugesan [2009 (247) ELT 21 (Mad.)] when gold is attempted to be brought by way of concealment the same is liable for absolute confiscation. I also find that even though the gold as such is not a prohibited item and can be imp....
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....s duty and smuggle the gold into India. A blatant attempt was made to smuggle the gold into India in contravention of the provisions of the Customs Act, 1962. The said offence was committed in a premeditated and clever manner and clearly indicates mens rea, and that there was no intention of declaring the gold to the authorities and if he was not intercepted before the exit, the Applicant would have taken out the gold without payment of customs duty. The applicant on one hand claims that he is a victim of a smuggling racket and on the other hand pleaded for re-export. Having accepted that he is a victim of a smuggling racket he is not the owner of the impugned gold. 8. The Government therefore holds that the Original Adjudicating Authority has rightly confiscated the gold absolutely and imposed a penalty. The Government also holds that Commissioner (Appeals) has rightly upheld the absolute confiscation by the original adjudicating authority. Government however, notes that when penalty is imposed under section 112 no penalty is required to be imposed under section 114AA of the Customs Act, 1962 for the same offence. The penalty imposed under section 114AA of the Customs Act....
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....014 could be termed as illegal as the same is a panchnama-cum-seizure order. According to Mr.Shastry, the view taken by this High Court in Baboo Ram Hari Chand (supra) is that such composite order is unheard of. The authority is empowered to exercise such drastic powers to seize the goods only in cases where it has reason to believe that the goods are liable to be confiscated. 11. The aforesaid takes us now to record the second submission of Mr.Shastry. Mr.Shastry would argue that while the show-cause notice under Section 124 of the Act clearly stated that the offence was one relatable to Section 112(b) of the Act, the adjudicating authority went on to discuss Section 112(a) of the Act. According to Mr.Shastry, the reading of the two sub-sections of Section 112 of the Act make it clear that in sub-section (a) the element of mens rea is not there, whereas in sub-section (b) the mens rea is an essential part and this is one of the exceptions to the general rule that in the Financial Acts, the requisite mens rea is presumed. In short, the argument of Mr.Shastry is that when the Customs Department has alleged violation of Section 112(a) of the Act, the onus would be upon them to est....
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..... When the handbags/ check-in bags were put in a screening machine, an image of metal wire around one handbag and one check-in bag appeared on the screening machine, resembling the impression that there was gold in the bags. From that point of time, whatever transpired till the end has been duly recorded in the panchnama duly signed by the two panch-witnesses as well as the Air Customs Officers on duty at the SVPIA, Ahmedabad. We may quote the relevant part of the panchnama as under : "The goods are placed under seizure by the officers of customs under the reasonable belief that the subject Aluminum Powder coated Gold Wires are not a part of the permissible Baggage and are liable for confiscation. Consequently, in light of above mentioned contravention of Rules and Regulations of the Customs Baggage Rules 1998, as amended, the aforesaid items (Aluminum Powder coated Gold Wires along with its packing materials) recovered from the passenger as described in the panchnama, are placed under Seizure under the provisions of Customs Act, 1962 under the reasonable belief that the same are liable for confiscation under the provisions of the Customs Act, 1962 as the said goods were a....
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....EI No.-353824050798111 Mob No.-9993122052 2. SAMSUNG MOBILE IMEI No.-353743053028864/01 Mob No.-9879112276 3. Passport No.-Z2510189 4. 2 Nos of broken bags in which gold wires were concealed. VALUE OF GOODS MARKET VALUE - Rs.52,60,620/- TARIFF VALUE - Rs.45,95,116/- REASONS FOR DETENTION SEIZURE UNDER PANCHNAMA DATED 27.04.2014 LAST DATE OF DEPARTURE 21 MARCH 2014 FLIGHT NO. G9-483 WAREHOUSE ENTRY NO & DATE 971/27-04-2014 17. It is true to a certain extent that no separate seizure memo was prepared. The subjective satisfaction that the goods is liable to be confiscated under the Act has been specifically recorded in the panchnama. The moot question is, whether the omission or failure on the part of the concerned officer to draw a separate seizure memo along with the panchnama would render the seizure illegal and thereby vitiate all the subsequent proceedings right upto the confiscation of the goods seized. "110. Seizure of goods, documents and things.- (1) If the proper officer has reason to believe that any goods are liable to confiscation under this Act, he may seize such goods: Provided that where it is not practicable ....
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....249; see also AIR 1967 SC 295] 25. There is no justification for the acceptance of the contention that omission or failure to draw a separate seizure memo under Section 110 of the Act is sine qua non for taking action under Section 124 of the Act. These two sections are entirely independent to each other. There is no substance in the contention that if no separate seizure memo under Section 110 of the Act is prepared, the same will render the seizure of the goods by itself illegal and the authority under Section 124 of the Act will also have no jurisdiction thereafter to proceed with the confiscation proceedings or with the imposition of penalty. The words used in Section 112 and Section 124 respectively of the Act are "any goods" and "any person". These words are of the widest import and they cannot be given a restricted meaning. There is nothing in these provisions to indicate that the goods in respect of which an order of confiscation or penalty can be passed under Section 111 and Section 112 respectively must be the goods seized under the provisions of Section 110 of the Act. It would be too much for this Court to take the view that in the absence of a separate seizure memo ....
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....hall not remove, part with, or otherwise deal with the goods except with the previous permission of such officer. (2) Where any goods are seized under Sub-section (1) and no notice in respect thereof is given under Clause (a) of Section 124 within six months of the seizure of the goods, the goods shall be returned to the person from whose possession they were seized: Provided that the aforesaid period of six months may, on sufficient cause being shown, be extended by the Collector of Customs for a period not exceeding six months. 112. Penalty for improper importation of goods, etc. Any person,- (a) who, in relation to any goods, does or omits to do any 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 or is 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 known 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 ....
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....m the goods are seized, the order of extension is illegal, ultra vires and a nullity. In the present case the goods in dispute were seized on May 26, 1969 and show cause notice under Section 110 read with Section 124 was issued on December 19, 1969. In between those two dates, the Collector of Customs and Central Excise passed order No.VIII/10-272/Cus/69 on November 27, 1969, extending the period for the issue of the show cause notice prescribed under Section 110 of the Act without notice to the petitioner. The consequence is that the order passed by the Collector of Customs and Central Excise dated November 27, 1969 extending the period of six month provided in Section 110 by two month from November 26, 1969 is bad and illegal in view of the provisions of Section 110(2) of the Act. But the question then arises is whether the petitioner is entitled to return of the goods seized, once the order of confiscation is passed under Section 110 of the Act. So far as Section 110 is concerned it deals with the seizure of the goods and the return thereof. In other words if the said provisions are not satisfied the goods seized have to be returned. Section 110 of the Act deals with the seizure....
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....ore, contended that an order under Sections 111, 112 and 124 for confiscation or imposition of penalty can be passed only in respect of the goods which are seized under Section 110 of the Act. It was further argued that if a right of restoration of goods vested by efflux of time in the person from whom the goods are confiscated, such person should again be served with an order of seizure under Section 110 of the Act, and unless the goods are so seized, no order of confiscation or imposition of penalty can be passed under Sections 111 & 112 of the Act. The aforesaid arguments advanced on behalf of the petitioner cannot be accepted. The first reason is that the provisions of Chapter XIII deal with the procedural matters. The provisions enacted therein are for securing goods suspected to be illegally imported. The provisions contained therein invest powers on certain officers to prevent disposal of goods in respect of which the proper person entertains a reasonable belief that the goods are smuggled goods. In Chapter XIV substantive provisions are enacted. In order that the substantive provisions may not be rendered ineffective the provisions are enacted in Chapter XIII so that suspec....
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.... provisions of Section 110 of the Act. The power to seize the goods under Section 110 is distinct and separate from the power of confiscation and imposition of penalty as provided in Sections 111 and 112 of the Act. The later provisions are not absolutely dependent on the provisions of Section 110 of the Act." 27. In the aforesaid context, we shall now look into the Delhi High Court judgment in the case of Worldline Tradex Private Limited (supra) relied upon by Mr.Shastry, the learned counsel appearing for the writ-applicant. We may quote the relevant observations made therein thus : "22. In Om Udyog v. Union of India (supra), in similar circumstances, the Court directed immediate release of the goods since "the Department had not shown prima facie case for exercise of powers of confiscation and has only relied upon existence of power". The Gujarat High Court in Baboo Ram Hari Chand v. Union of India (supra) negatived the plea of the Department that seizure and confiscation were one and same thing. In that case the panchnama was projected as the seizure order. The Court observed that "such composite order is unheard of". It further observed: "27. Technically, a....
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....ective petitioners came before the respective High Courts for getting their goods released on the ground that the seizure was not in accordance with law, more particularly, the show-cause notice under Section 124 of the Act was not issued within the statutory time period as provided under the provisions. 29. At the cost of repetition, we state that it would be too much to say that the omission or failure to draw or prepare a separate seizure memo along with the panchnama would render all subsequent proceedings bad in law. Thus, we reject the first contention of Mr.Shastry as regards Section 110 of the Act. 30. The aforesaid now takes us to consider the contention as regards Section 112 of the Act. Section 112 of the Act reads thus : "112. Penalty for improper importation of goods, etc. Any person,- (a) who, in relation to any goods, does or omits to do any 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 or is in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing,....
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....AA of the Customs Act, 1962. 21. Now therefore, Shri Abdul Husain Saifuddin Hamid, residing at 20/595, Hindu Mochi, Mohalla, Panigram Chowk, Sadar Kotwali, Ajmer, Rajsthan, (furnished latest addres as C/o Saifuddin Abde-Ali Hamid (Ajmerwala), C-3, Jasmin Flat, Khanpur, Ahmedabad) is hereby called upon to show cause in writing to the Additional/Joint Commissioner of Customs, Custom House, Navrangpura, Ahmedabad within thirty days from the receipt of this notice as to why : (i) The 1753.54 grams Aluminum Coated Gold Wire valued at Rs.52,60,620/- (Market Value) & Rs.45,95,116/- (Tariff Value), placed under seizure under panchnama dated 27.04.2014, should not be confiscated under Section 111(l) read with 111(m) of the Customs Act, 1962; (ii) The packing material, viz. 2 nos. of broken bags used for concealment of the said goods, having no commercial value, placed under seizure under panchnama dated 27.04.2014 should not be confiscated under Section 118(a) and 119 of the Customs Act, 1962; (iii) Penalty should not be imposed on him under Section 112 (b) and 114AA of the Customs Act, 1962 for the omissions and commissions mentioned herein above. ....
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....t is essential for the prosecution to establish that the accused had a guilty intention or, in other words, the requisite mens rea before recording the conviction, the obligation on the part of the Revenue, in cases of tax delinquency, could be discharged were it can be shown that the "blameworthy conduct" of the assessee was established, like by recording a finding that the assessee had made a "false representations" and the like. The recording of such a finding by itself shows the establishment of the blameworthy conduct, which would be the establishment of the mens rea to a limited extent applicable to the civil obligations. Mens rea can be established either by direct evidence or by drawing inferences from the established facts and circumstances of a given case. The application of the doctrine of mens rea in cases of tax delinquency has been nicely summed up in "Corpus Juris Secundum", Volume 85, at page 580 in paragraph 1023, where it is stated thus : "A penalty imposed for a tax delinquency is a civil obligation remedial and coercive in its nature, and is far different from the penalty for a crime or a fine or forfeiture provided as punishment for the violation of cr....
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....ed before the Criminal Court for the very contravention or violation concerned. But, in our view, as held by the Apex Court in M/s. M.CT.M. Corporation Private Ltd. case (supra); Gujarat Travancore Agency's case (supra) and the two Division Bench judgments of this Court in Vijaya Electrical's case (82 STC 268) (supra) and Lakshmi & Co.'s case (87 STC 345) (supra), the penalty contemplated under Section 112(a) of the Act for the violation in question is of a civil obligation, remedial and corrective in its nature and is far different from the penalty for a crime or a fine or forfeiture provided as punishment for the criminal or penal laws. The regulation which is sought to be provided for, and the violation of which is to be dealt with under Sections 111 and 112 of the Act, are in respect of the laws of great and serious importance in conserving the economy of the Nation and have to be, therefore, viewed in their proper perspective so as not to result in abnegation or abrogation of the avowed object and purpose of the Legislation, which is not only regulatory, but prohibitory in nature, the mandate contained therein being in the larger interests and general welfare of th....
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....ty in the appeal filed by the writ-applicant against the Order in Original has recorded a finding that the contraband gold seized from the possession of the writ-applicant as such is not a prohibited item and can be imported but such import is subject to the restrictions including the RBI regulations. However, at the same time, the view taken by the appellate authority is that the writ-applicant returned to India within 37 days from the date of his departure to Sharjah and he could not be said to be qualified as an eligible person to import gold and, therefore, the gold is liable for absolute confiscation. In other words, the view taken is that when an attempt is made to conceal the contraband clandestinely, the same is liable for absolute confiscation and there is no question of giving an option to pay the fine in lieu of the confiscation. In this regard, the appellate authority seems to have relied on a decision of the Madras High Court in the case of Commissioner of Customs (Air) v/s. Samynathan Murugesan. In the said case, it was the Commissioner of Customs (Air), Customs House, Chennai, who was the petitioner before the High Court. The question before the High Court was, "whet....
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....ng in gold at concessional rate of duty. So far as the respondent was concerned, he was prohibited from bringing the gold since he did not satisfy the relevant conditions. Therefore, under Section 112, the officer had the discretion to decide whether he should allow the gold to be redeemed. The officer had considered the mode of concealment and the fact that he was not an eligible passenger and had rightly held that absolute confiscation is warranted. The learned Central Government Standing Counsel referred to the following decisions: Shaik Jamal Basha Vs. Government of India (1997 (91) ELT 277 (AP)); Garg Woollen Mills (P) Ltd. Vs. Addl.Collr. of Customs, New Delhi (1998 (104) ELT 306 (SC)); A. Shaud Ali Vs. Additional Collector of Customs, Madurai 2001 (133) ELT 554 (Mad); Nine Star Exports Vs. Commissioner of Customs (Ports) Chennai (2003(151) ELT 265 (Mad)); Gurucharansingh Vs. Directorate of Revenue Intelligence in Crl. Appeal No.576 of 2008 dated 01-04-2008; Commissioner of Central Excise, Bangalore Vs. Srikumar Agencies (2008 TIOL-220-sc-cx-lb); M.K.S. Mohammed Rafi Vs. Joint Commissioner of Customs in W.P.No.151....
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.... 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 Sheikh Mohd. Omer v. Collector of Customs, Calcutta and Ors. AIR 1971 SC 293 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 says is that any goods which are imported or attempted to be imported contrary to "Any prohibition imposed by any law for the time being in force in this country" is liable to be confiscated. "Any prohibition" referred to in that section applies to every type of "prohibition". That prohibition may be complete or partial. Any restriction on import or export is to an extent a prohibition. The expression "any prohibition" in Section 111(d) of the Customs Act, 1962 includes restrictions. Merely because Section 3 of the Imports and Expo....
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.... of India, vide number G.S.R.733(E), dated the 30th September, 1994, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts goods of the description specified in column (2) of the Table below and falling under Chapter 71 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), when imported into India by an eligible passenger, from so much of the duty of customs leviable thereon which is specified in the said First Schedule, as is in excess of the amount calculated at the rate as specified in the corresponding entry in column (3) of the said Table and from the whole of the additional duty leviable thereon under section 3 of the said Customs Tariff 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 passen....
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....in the Rules including ornaments but excluding ornaments studded with stones. ﾵ We are unable to follow this judgment. 12. In 1998 (104) ELT 306 (SC), the Supreme Court held, "5. Another contention that was urged by Shri Mahabir Singh was that the Additional Collector, as also the Tribunal, have failed to take into consideration the provisions contained in Section 125 of the Act which prescribes 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 the time being in force, and shall, in the case of any other goods, give to the owner of the goods 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. We do not find any merit in this contention of Mr. Mahabir Singh. Under Section 125 a discretion has been conferred on the officer to give the option to pay fine in lieu of confiscation in cases of goods, the importation or exportation whereof is prohibited under the Ac....
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....ithin the limits of any customs area for the purpose of being exported, contrary to any prohibition imposed by or under this Act or any other law for the time being in force.' and with reference to the word, 'prohibition' imposed by or under the Act or any other law for the time being in force and also taking note of Section 2(33) of the Act, which defines 'prohibited goods', with the opening sentence of Section, starts that, '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', the Supreme Court, at Paragraph 9, held as follows: "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 al....
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....er therein did not belong to the category of persons, who could bring gold at concessional rate of duty. Contentions were made by the Revenue that goods were imported in violation of Import (Control) Order, 1955, read with Section 3(i) of Import and Export Control Act, 1947. Though in the above case, a contention was raised by the respondent that the gold is not a prohibited item and it was only a restricted item and therefore, there is a mandatory duty, on the part of the proper officer to give option to the person, guilty of adjudicatory proceedings to pay fine, in lieu of confiscation, taking note of the judgment in Shaik Jamal Basha v. Government of India reported in 1997 (91) ELT 277 (AP), a Division Bench of the Madras High Court, following Om Prakash Bhatia's case (supra), at Paragraphs 7, 9 and 10, held as follows: "7. Section 11 empowers the Central Government to prohibit either absolutely or subject to such conditions to be fulfilled before or after clearance the import or export of the goods of any specified direction by issuing a notification in this behalf. The effect of interpretation of the words prohibited goods was considered in Om Prakash Bhatia Vs. C....
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....lling", we cannot cut down the amplitude 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." Therefore, if we apply this judgment to the notification, the notification contemplates import of gold subject to certain conditions. The relevant paragraphs of Import trade control order are extracted as follows: "Import of Gold permitted as Baggage. Import of gold in any form, including ornaments but excluding ornaments studded with stones or pearls, is allowed to be imported as part of baggage by passengers of Indian origin or a passenger holding a valid passport issued under the Passport Act subject to the following conditions: that the passenger importing the gold is coming to India after a period of not less than six months of stay abroad; the quantity of gold imported shall not exceed 10 Kg, per pas....
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....o consider the conditions on which import is permissible and whether the conditions are satisfied because the appellant attempted to smuggle out the goods by concealing the same in emergency light, mixie, grinder and car horns etc. and hence the goods so brought is prohibitory goods as there is clear violation of the statutory provisions for the normal import of gold. Further, as per the statement given by the appellant under Section 108 of the Act, he is only a carrier i.e. professional smuggler smuggling goods on behalf of others for consideration. We, therefore, do not find any merit in the appellant's case that he has the right to get the confiscated gold released on payment of redemption fine and duty under Section 125 of the Act." 43. On the facts and circumstances, the dictum laid down by the Kerala High Court in Abdul Razak's case (supra), is that even though gold is not an enumerated prohibited item and thus, can be imported, but when such import is subject to restrictions, including the necessity to declare the goods on arrival at the Customs Station and make payment of duty at the rate prescribed, release of the smuggled goods cannot be ordered. 44. The dic....
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....xport, any restriction on import or export, which is also to be treated as prohibition. 47. In Fast Track Traders v. Commissioner of Customs (Seaport - Imports), Tuticorin reported in 2012 (286) ELT 681 (Mad.), there was mis-declaration of goods. Finding that there was a false declaration, a Division Bench of the Madras High Court held that when the condition is violated, the authorities can definitely have the recourse under law. 48. In Ashish Kumar Chaurasia v. Commissioner, CESTAT reported in 2015 (325) ELT 250 (All.), 79 silver ingots of foreign origin, were recovered from the premises of the appellant therein. On the facts and circumstances of the case, the Allahabad High Court held that the appellant therein has failed to prove that the seized silver ingots were not smuggled goods and in such circumstances, upheld the levy of penalty, and ordered for confiscation. 49. In Sheik Mohammed Rafique Ahmed v. Joint/Additional C.C., Airport, Chennai reported in 2016 (331) ELT 337 (Mad.), a learned Single Judge of the Madras High Court considered a case, where a passenger was carrying gold chains of 18 carat, two bangles of 24 carat purity, 12 kg of saffron, RMD Gutkha, Gudan....
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....the words, 'smuggled goods' should be read within the definition of `imported goods' for the purpose of the Customs Act, 1962. At Paragraphs 6 to 8, 10, 13 and 14, the Supreme Court held as follows: "(6) We may now briefly notice the scheme of the Act. The expression 'dutiable goods', 'duty', 'import', 'imported goods', 'importer' and 'smuggling' are defined in the following manner :- 'Dutiable Goods' means any goods which are chargeable to duty and on which duty has not been paid. 'Duty' means a duty of Customs and leviable under this Act. 'Import', with its grammatical variations and cognate expressions, bring into India from a place outside India. 'Imported goods' means any goods brought into India from a place outside India but does not include goods which have been cleared for home consumption. 'Importer' means 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. 'Smuggling', in r....
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....Act provides for confiscation of goods and conveyances and imposition of penalties. Section 111(d) of the Act provides that any goods which are imported or attempted to be imported or are brought within Indian Custom 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, shall be liable for confiscation. Section 112 of the Act provides for penalties for improper importation of goods. (10) It is settled law that the notification has to be read as a whole. If any of the conditions laid down in the notification is not fulfilled, the party is not entitled to the benefit of that notification. The rule regarding exemptions is that exemptions should generally be strictly interpreted but beneficial exemptions having their purpose as encouragement or promotion of certain activities should be liberally interpreted. This composite rule is not stated in any particular judgment in so many words. In fact, majority of judgements emphasize that exemptions are to be strictly interpreted while some of them insist that exemptions in fiscal Statutes are to be liberally interpreted giving an apparent impr....
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....oods 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, but if import i....
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....held that if there is intentional over-invoicing of the goods imported, then such goods imported, fall under the category, 'prohibited goods', as per Section 2(33) of the Customs Act, 1962. Smuggling under the Customs Act, 1962, in relation to any goods, means any act or omission which will render such goods liable to confiscation, under section 111 or section 113 of the Act and therefore, those goods, would also fall under the definition of prohibited goods, in terms of Section 2(33) of the Customs Act, 1962. 57. If there is a fraudulent evasion of the restrictions imposed, under the Customs Act, 1962 or any other law for the time being in 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 ....