TaxTMI 
TaxTMI 
2020 (12) TMI 1396
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.... 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, Deira, Dubai arrived at the SVPIA, Ahmedabad by Air Arabia Flight No.G9-486 from Sharjah on 27.....
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....ires, 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 received by the noticee from Jeetubhai Soni and intimated that the said two bags were to be delivered to the person namely KK who is from....
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....rded 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 participate in religious function i.e. "ORAS" at Vohora's Roja, Saraspur, Ahmedabad. He voluntarily deposited his mobile No. 09993122082 and passport bear....
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....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 not remember at present; he met him last before one week at his Vadodara shop. On being asked as to why Shri Jeetubhai Soni asked him to receive the bags from Shri Abdul Huss....
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....t 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 in contravention of the provisions of Baggage Rules 1998, as amended. 1.17 The aforesaid act of the noticee, importing the Aluminum coated gold wire totally weighing 1753.54 gms, valued a....
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....mitted 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 him under Section 112(b) of the Customs Act, 1962 for the omissions and commissions mentioned herein above; (iv) Penalty should not be imposed upon him under Section 114AA of the Customs Act, 1962 for false declaration." 4. The Join....
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....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 imported, but such import is subject to the restrictions, including the RBI regulations. Hence, the order of absolute confiscation is correct and justified. 9. The appellant contended that he did not want to sell the gold into India after the same is handed over to him. He request....
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....g 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, 1962 therefore is required to be set aside. 9. (The Government therefore finds no reason to interfere with the impugned Order-in-Appeal. The Appellate order is upheld as legal and proper. The penalty of Rs.5,00,000/- (Rupees Five lakhs) imposed under section 114AA of the Customs Act,1962 is set aside.....
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....on 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 establish the presence of the element of mens rea, which they have miserably failed to even prima facie indicate. He would argue that the department has failed to adduce any evidence to even remotely suggest that the gold in question was concealed with a dishonest intention. 12. According to Mr.Shastry, the penalty could ha....
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....ed 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 attempted to be smuggled by not declaring the same before the Customs. The items mentioned in Annexure-A and bags are placed under seizure for further investigation and other items such as clothes, food and other miscellaneous items after scrutiny are returned to Shri Abdul Husain Saifuddin Hamid in presence of we independent panchas. ....
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..../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 to seize any such goods, the proper officer may serve on the owner of the goods an order that he shall 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 se....
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....ty 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 the authorities could not have proceeded further or assumed jurisdiction for the purpose of confiscation of the goods. "To confiscate" would mean to adjudge goods or property to be forfeited to the public domain and to deprive the owner of the right of ownership of the same. It cannot be gainsaid that adjudication of confiscation of goods can be recorded even without seizure of the goods. Similarly, personal penalty can be imposed even when the goods have not been seized. Such a situation is contemp....
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....ding 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 any prohibition is in force under this Act or any other law for the time being in force, to a penalty not exceeding five times the value of the goods or one thousand rupees, whichever is the greater; (ii) in the case of dutiable goods, other than prohibited goods, to penalty not exceeding five times the duty sought to be evaded on such goods or one thousand rupees, whichever is the greater. 124. Issue of show-cause notice before confiscation of goods, etc. No order confiscating any goods or imposing any penalty on any person shall be made under this Ch....
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.... 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 of the goods. Section 124 of the Act deals with the confiscation and imposition of the penalty. The provisions relating to the seizure of the goods and those relating to the confiscation of the goods or imposition of penalty stand on different footing. Section 124 of the Act does not lay down any period within which the notice required by it has to be given. The period laid down in Section 110(2) affects only the seizure of the goods and not the validity of notice. In the present case after proceeding of seizure the proceedings for confiscation and imposition of penalty were proceeded with and the proceedin....
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....nnot 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 suspected smuggled goods may not be disposed of taking at the same time abundant caution that individuals may not be put to more inconvenience than what is necessary. It is necessary to consider the provisions contained in Chapter XIV of the Act. Section 111 of the Act describes the goods which can be confiscated. Section 112 provides for penalty for improper importation of goods. Section 113 provides for confiscation of goods attempted to be improperly exported. Section 114 provides for penalty for attempt to export goods improperly. Section 115 provides for confiscation of conveyances and Section 116 provides penalty ....
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.... 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, asking the party to submit fresh PD Bonds for a period of six months on one hand and proceeding to seize the goods on the other hand may not perhaps be faulted with, however, burden lies on the authority to explain rationale to rush into seizure/ confiscation of the goods in such circumstances, the reason is the 'proper officer' cannot proceed to seize the goods under Section 110 of the Act unless he has reason to believe. The authority would exercise drastic powers to seize the goods only in case wherein it has reason to believe that the goods is liable to be confiscated. The powers to seize and the power to confiscate....
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....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, 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 not exceeding five times the value of the goods or one thousand rupees, whichever is the greater; (ii) in the case of dutiable goods, other than prohibited goods, to penalty not exceeding five times the duty sought to be evaded on such goods or one thousand rupees, whichever is the greater." 31. It is argued that if the penal action is proposed to be taken and proceedings a....
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.... 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. 22. The said Noticee must state in his written reply as to whether he desires to be heard in person, if no reply to this notice is received within 30 (thirty) days from the date of receipt of this notice or if he fails to appear for the personal hearing on the date and time intimated to him, the case is liable to be decided on merits on the basis of evidences available, without any further reference to him." 33. The show-cause notice referred to above explicitly talks about Section 112(b) of the Act, 1962. It has been specifically stated in the show-cause notice while calling upon the writ-applicant to show-cause as to why penalty should not be imposed on him under Section 112(b) of the Act having regard to the mode and metho....
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....nd 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 criminal or penal laws. We are in agreement with the above statement. Therefore, we hold, to the limited extent that mens rea has application in tax default cases, it would stand established, if the conduct to the assessee is found to be blameworthy, within the meaning of the particular provision of the given tax statute. Where a finding is recorded on facts about the existence of the blameworthy conduct, which the Legislature has treated as an offence or a default on the part of the assessee, like the making of a "false representation", it would attract the provisions of Section 10(b) of the Act and no further finding would be required to be recorded about the existence of mens rea on the part of the assessee, as it would be inherently inclu....
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....nder 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 the Nation. 12. The learned Senior Counsel for the applicant repeatedly urged that if the element of mens rea is held to be irrelevant for purposes of Sections 111 and 112 of the Act, the Authorities enforcing law are likely to act arbitrarily and unreasonably exposing even innocent persons to severe penalties. We are unable to appreciate the reason of it. The Adjudication proceedings are quasi judicial in nature with forums higher in the hierarchy including a Judicial Tribunal, expected to act judiciously and the Courts of Justice at the State and National level and cases of any such arbitrary exercise of power could be effectively contained and remedied, but the taking of the other view, in our opinion, will make the country full and flooded wit....
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....ving an option to pay the fine in lieu of the confiscation. In this regard, the appellate authority seems to have relied on a decision of the Madras High Court in the case of Commissioner of Customs (Air) v/s. Samynathan Murugesan. In the said case, it was the Commissioner of Customs (Air), Customs House, Chennai, who was the petitioner before the High Court. The question before the High Court was, "whether in the facts and circumstances of the case, the Tribunal was right in remanding the matter with a direction to the Commissioner to invoke the power under Section 125 of the Customs Act for redemption of the goods on payment of fine ? The facts of the said case are almost identical to the facts of the case in hand. We quote the relevant observations thus : "3. The learned Senior Central Government Standing Counsel submitted that a person working abroad is eligible to import gold weighing upto 7.075 kgs as per the Explanation to notification 31/2003-Cus.dated 01-03-2003. An eligible passenger is one who has coming to India after a period of not less than 6 months of staying abroad and short visits upto a total of 30 days shall be ignored. The learned Senior Central Government St....
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....r 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.15146 of 2001 dated 03-12-2004; Prince Anthony Sagayam Vs. The Deputy Commissioner of Customs in W.A.No.758 and 563 of 2006 dated 25-01-2008. 5. Mr. A. Thiagarajan, learned Senior Counsel appearing for the respondent submitted that the goods were only restricted goods. Gold was not a prohibited item. Therefore, the officer was under a mandatory duty to give option to the person found guilty to pay in lieu of confiscation. He relied on 1997 (91) E.L.T. 227 (A.P.) (Shaik Jamal Basha Vs. Government of India). 6. Section 2(33) of the Customs Act defines prohibited goods. It reads as follows: "(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 w....
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....at 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 Exports (Control) Act, 1947, uses three different expressions "prohibiting", "restricting" or "otherwise controlling", 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 stud....
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....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. ﾵ 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 not a eligible passenger. The learned Senior Counsel appearing for the respondents submitted that the respondent had been in Singapore from 1993. We are not concerned with the date on which he first went to Singapore. For the purpose of this exem....
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....gh. 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 Act or under any other law for the time being in force but in respect of other goods the officer is obliged to give such an option. In the present case, having regard to the facts and circumstances in which the goods were said to be imported and the patent fraud committed in importing the goods, the Additional Collector has found that the goods had been imported in violation of the provisions of Import (Control) Order, 1955 read with Section 3(i) of the Import and Export (Control) Act, 1947. In the circumstances he considered it appropriate to direct absolute confiscation of the goods which indicates that he did not consider it a fit case for exercise of his discretion to give an option to pay the redemption fine under Section 125 of the Act. The Tribunal also felt that since this was a case in which fraud was involved, the order of the Additional Collector directing absolute confiscation of the goods did not call for any interference. We do not find any reason to take a differen....
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....ed, have been complied with. This would mean that if the conditions prescribed for import or export of goods are not complied with, it would be considered to be prohibited goods. This would also be clear from Section 11 which empowers the Central Government to prohibit either 'absolutely' or 'subject to such conditions' to be fulfilled before or after clearance, as may 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 Sheikh 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 con....
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....he 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. Commissioner of Customs (2003 (6) SCC 161) and in paragraph No.10 of the said judgment the Supreme Court held as follows: "10. From the aforesaid definition, it can be stated that (a) if there is any prohibition of import or export of goods under the Act or any other law for the time being in force, it would be considered to be prohibited goods; and (b) this would not include any such goods in respect of which the conditions, subject to which the goods are imported or exported, have been complied with. This would mean that if the conditions prescribed for import or export of goods are not complied with, it would be considered to be prohibited goods. This would also be clear from Section 11 which empowers the Central Government to prohibit either 'absolutely' or 'subject to such conditions' to be fulfilled before or after clearance, as may be specified in the notification, the import or export of the goods of any specified description. The notification can be issued for the purposes specifi....
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....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 passenger import duty on gold shall be paid in convertible foreign currency; there will be no restriction on sale of such imported gold. A person shall be deemed to be of Indian origin, if he held an Indian passport at any time, or he or either of his parents or any of his grand parents, was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955); provided that the national of Pakistan or Bangladesh shall be deemed to be not of Indian origin. A spouse (not being a national of Pakistan or Bangladesh) of a person of Indian origin shall also be deemed to be of Indian origin."" 9. In view of meaning of the word prohibition as construed laid down by the Supreme Court in Om Prakash Bhatia case we have to hold that the imported gold was prohibited goods since the respondent is not an eligible passenger who did not satisfy the conditions. The impugned order deserves to be set aside. 10. In 1992 (61) ELT 372(cited supra), the Supreme Court directed the Collector to consider the exercise of discre....
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....payment of duty at the rate prescribed, release of the smuggled goods cannot be ordered. 44. The dictum of the Supreme Court and the High Courts above makes it clear that gold, may not be one of the enumerated goods, as prohibited goods, still, if the conditions for such import are not complied with, then import of gold, would squarely fall under the definition, 'prohibited goods', in Section 2(33) of the Customs Act, 1962, which states 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 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'. When there is a violation of statutory prohibitions, mentioned in Sections 11 and 11A of the Customs Act, 1962 or any other law, for the time being in force or restrictions imposed, such restrictions would also encompass the expression, any prohibition. 45. In Commissioner of Customs, Chennai v. Brinda Enterprises reported in 2010 (262) ELT 239 (Mad.), the company mis-declared the goods and there was no specific licence or certificate ....
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....ains of 18 carat, two bangles of 24 carat purity, 12 kg of saffron, RMD Gutkha, Gudang Garam Cigarette cartons, perfumes and two Samsung mobiles. A search was conducted by the Officers of Directorate of Revenue Intelligence, Trivandrum, in the baggages of the petitioner therein. Thereafter, statements were recorded. On completion of the investigation, a show cause notice was issued, under Section 124 of the Customs Act, 1962, proposing as to why, the seized goods should not be confiscated and penalty should not be imposed. He sent a reply, disputing the allegations. A Writ Petition has been filed, seeking for a direction to the respondent therein to release the seized imported goods, under the Mahazar. Accepting the contention of the revenue that since the passenger had attempted to smuggle goods into India, by concealing the same in his person, as well as in his hand baggage and checked-in-baggage, without declaring the same to the Customs, in order to evade payment of Customs duty, the afore-stated goods, are held liable for confiscation, under the provisions of Section 111(d) and 111(1) of the Customs Act, 1962 and hence, cannot be released provisionally under Section 110 of the....
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....rter. '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 of the Act. (7) Dutiable goods are goods whose import is permitted by the Act or any other law in force. Duty is the tax leviable on the goods occasioned by their import into India or their export out of India. The dutiability of the goods is covered by Section 12 of the Act which is the charging section. Under this Section, all goods imported into or exported from India are liable to Customs duty unless the Customs Act itself or any other law for the time being in force provides otherwise. The rate of duty is fixed by the Customs Tariff Act, 1975. "Import" and "Imported Goods" means 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 upto the moment they are cleared for home consumption. The word 'importer' has been defined in the Act as importer in relation to any goods at any time between their importation and the time when they are cleared for home consumption includes a....
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....an apparent impression that they are contradictory to each other. But this is only apparent. A close scrutiny will reveal that there is no real contradiction amongst the judgements at all. The synthesis of the views is quite clearly that the general rule is strict interpretation while special rule in the case of beneficial and promotional exemption is liberal interpretation. The two go very well with each other because they relate to two different sets of circumstances. (13) In short, question before us is whether goods that are smuggled into the country can be read within the meaning of the expression 'imported goods' for the purpose of benefit of the exemption notification. We are of the view that 'smuggled goods' will not come within the definition of 'imported goods' for the purpose of the exemption notification, for the reason, the Act defines both the expressions looking at the different definitions given to the two classes of goods: imported and smuggled, and we are of the view that if the two were to be treated as the same, then there would be no need to have two different definitions. (14) In order to understand the true meaning of the term &#....
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....is not done lawfully, in other words against any prohibition or restriction, which are inbuilt in the Customs Act, 1962 or any other law for the time being in force, then such goods should fall within the definition of Section 2(33) of the Act. 53. A conjoint reading Sections 2(33), 11 or 11A of the Act and other provisions in the Customs Act, 1962, and any other law, for the time being in force, would also make it clear that importation of goods, defined as illegal or prohibited or without complying with the conditions, or in violation of statutory provisions in the Customs Act, 1962 or any other law for the time being in force and in all cases, whether there is either total prohibition or restriction, in the light of the judgment of the Supreme Court in Om Prakash Bhatia's case, such goods should fall within the definition of Prohibited goods. When import is in contravention of statutory provisions, in terms of Sections 11 or 11A of the Customs Act, 1962 or any other law, for the time being in force and when such goods squarely fall within the definition 'illegal import', or the other provisions in the statute, dealing with prohibition/restriction, the same are to he....