TaxTMI 
TaxTMI 
2024 (7) TMI 332
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....3, to be bad in law, arbitrary and illegal. It was further prayed that the respondents be directed to provisionally release the goods on payment of applicable duty under the Customs Act or under any other conditions as may be imposed by the High Court. 3. Heard Mr.N. Krishna Sumanth, learned counsel for the petitioners and Mr. Dominic Fernandes, learned Senior Standing Counsel for the Central Board of Indirect Taxes and Customs (C.B.I.C.), for the respondents. 4. The petitioner in Writ Petition No.28548 of 2023 was carrying gold weighing 2,000 gms., and the petitioner in Writ Petition No.28523 of 2023 was carrying gold weighing 1793.500 gms. 5. The incident revolves around the action on the part of the officers of the Customs Department, the Area Intelligence Unit posted at the Rajiv Gandhi International Airport, Shamshabad, Hyderabad. It was on 12.08.2023 at around 00.20 hrs., the Customs Authorities intercepted the writ petitioners, viz., Shaik Arif, S/o.Shaik Ghouse Basha, aged around : 22 years claims to be a student and another petitioner, viz., Shaik Mohammed Sadiq, S/o.Shaik Abdul Jaleel, aged around 21 years, also claims to be a student. Upon arrival of the two petitione....
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....rdicted by this Court under Article 226 of the Constitution of India. Though the petitioners were not carrying any cash with them, according to the petitioners they had their own people waiting outside the Airport with the money required for being paid towards customs duty, but it was not allowed or followed. 8. According to the learned counsel for the petitioners, since they were prevented much before they could reach the counter provided for declaration of the forms, the entire action is bad. Subsequently, the petitioners received notices for disposal of the gold seized from them vide notice dated 24.08.2023, during which time both the petitioner were in judicial custody. Knowing well that the petitioners were in judicial custody, issuance of a notice becomes an empty formality and is thus in violation of principles of natural justice, and therefore, the said action requires to be set aside for the above grounds. The petitioners were subsequently released on bail by the order of the High Court only on 21.09.2023. After coming out of the jail, the petitioners have filed the instant writ petitions. 9. According to the learned counsel for the petitioners, the notices for disposal ....
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....s even did not furnish the requisite declaration form of they carrying goods which were dutiable and which were not disclosed as per the case of the respondents. According to him, during the course of interrogation, the petitioners contended that they were handed over this consignment by some unknown persons at Bangkok and which was to be delivered to somebody at Hyderabad. Apart from the fact that the petitioners did not have the invoice and the necessary declaration form, the petitioners also did not have sufficient money to pay the required duty for the gold bars, as is otherwise required under the provisions of the Customs Act. Since the petitioners were not able to provide any convincing reply to the queries put by the learned Standing Counsel for the respondent-Department and neither the petitioners were carrying any authentic document in respect of the purchase of the said gold and also for fact that the petitioners did not submit the declaration form of they carrying such quantity of gold, the authorities concerned were justified in seizing the gold and initiating appropriate prosecution case against the petitioners which cannot be found fault with. 13. As regards the con....
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.... counter where such declarations were supposed to be made, but tried to smuggle out the gold by directly travelling through the 'Green Channel' counter during which time they were intercepted and frisked by the respondent-Department and it was then the gold was recovered from the two petitioners. The petitioners also did not carry sufficient money for making payment towards customs duty. 16. With the aforesaid factual matrix of the case, we now proceed to appreciate the statutory provisions governing the field. 17. Section 110 of the Customs Act deals with seizure of goods, documents and other goods, which for ready reference is being reproduced as under, viz., "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. [(1-A) The Central Government may, having regard to the perishable or hazardous nature of....
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....proceeding under this Act. (4) The person from whose custody any documents are seized under sub- section (3) shall be entitled to make copies thereof or take extracts therefrom in the presence of an officer of customs." 18. In terms of the provisions of Sub-Section (1A) of Section 110, the Central Government has issued a notification, viz., Notification No.31/1986, dated 05th February, 1986, drawing up a list of Schedule of goods of perishable or hazardous nature, depreciation in the value with the passage of time, constraints of storage space and valuable nature of the goods. In the said appendix of Schedule at Serial No.4A, it is mentioned that "gold in all forms including bullion, ingot, coin, ornament, crude jewelry", can be disposed of immediately on its seizure. 19. As regards the burden of proof, in establishing that the goods seized are smuggled goods, the provision under the Customs Act dealing with this aspect is Section 123, which for ready reference is being reproduced as under, viz., "123. Burden of proof in certain cases. - [(1) Where any goods to which this section applies are seized under this Act in the reasonable belief that they are smuggled goods, the bu....
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....bject provision regarding re-export of Article/s under Section 80 of the Act would be only in the event if the person who has imported the goods, has made a declaration as is required under Section 77 of the Act. Thus, a declaration under Section 77 is a pre-requisite for allowing re-export under Section 50. 23. In the instant case, the declaration of the subject gold being brought into India was not available with the petitioners. 24. A Division Bench of the Allahabad High Court in the case of Commissioner of Cus. (Preventive), Lucknow vs. Deepak Bajaj 2019 (365) E.L.T. 695 (All.) , while dealing with re-export of gold, held at paragraph Nos.11, 12 and 17 as under, viz., "11. A simple reading of the aforesaid provision makes it abundantly clear that the benefit of Section 80 of the Act for return of the detained articles to the passenger at the time of leaving India would only be available to him if in respect of dutiable article or the import of which is prohibited a declaration is made by him under Section 77 of the Act. Therefore, making of declaration under Section 77 of the Act by the person whose baggage contains the dutiable articles or the import of which is prohibited....
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.... For good and valid reason re- export may be allowed but it cannot be claimed as of right." 26. The fact that the gold was being brought into the territory of India without proper documents and also in violation of the provisions of the Customs Act, there can be no doubt that the goods are liable for confiscation and it was for this reason the subject gold bars were seized. 27. As has been discussed earlier, Section 110 of the Act deals with seizure of goods, etc. Sub-Section (1-A) thereof empowers the Central Government to notify certain goods which need not be subjected to confiscation for the purpose of its disposal. A notification in this regard has also been issued by the Central Government viz., Notification No.31/1986, dated 05th February, 1986, wherein at Serial No.4A of the Schedule, it is mentioned that "gold in all forms including bullion, ingot, coin, ornament, crude jewelry" are goods which can be disposed of by the proper officer, in such a manner as the Central Government may, from time to time, determine. Since the "gold" is one such goods which is notified under Sub-Section (1A) of Section 110, the general provisions as is otherwise stipulated under Section 126 o....
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....s 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. 75. 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 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. 76. 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....