TaxTMI 
TaxTMI 
2024 (7) TMI 872
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....have any check-in-baggage, but was carrying a handbag. Petitioner declared two bottles of whiskey as the value of good imported by him and passed through green channel. (iii) A Customs Officer for some reason stopped Petitioner and searched his handbag. On a personal search of Petitioner, he was found wearing a gold chain with a gold pendant embedded with 12 diamonds. On questioning, Petitioner stated that the said gold chain was purchased in the year 1989 by him from a Jeweller in US for around USD 25,000/- which, at the exchange rate prevailing on date of his arrival i.e., 6th May 2007 would work out to about Rs. 10,02,500/-. (iv) On 7th May 2007, statement of Petitioner was recorded under Section 108 of the Customs Act. It is recorded that Petitioner stated that he was a resident of New York, U.S.A and staying with his family. His parents and sisters were staying in Mumbai. He further stated that he was carrying on jewellery business and used to visit India regularly to meet his parents and siblings living in India and also for business purpose. He further stated that he was living in U.S.A. since 25 years and had an annual income of USD 1,50,000/-. (v) On 7th May 2007, a pan....
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....n with pendant valued at Rs. 1,20,35,000/- under Section 111 of the Act read with provisions of the Foreign Trade Policy and Rules 11 and 14 of the Foreign Trade (Regulation) Rules, 1993. The Commissioner also imposed a penalty of Rs. 1,20,00,000/- on Petitioner under Section 112 (a) of the Act. (ix) The aforesaid order was challenged by Petitioner by filing an appeal to the Customs, Excise, Service Tax, Appellate Tribunal ("Tribunal"). On 8th October 2009, the Tribunal disposed the appeal by remanding the matter back to the original authority for denovo consideration and for giving an opportunity to cross-examine the witnesses. An additional reason for remanding the matter back was to give an opportunity to Petitioner to establish that the jewellery was his "personal effects" by relying upon the Baggage Rules of 1994 since the Baggage Rules of 1998 did not define the expression "personal effects". The Tribunal, in the said order, also observed that Rule 6 of the Baggage Rules is not applicable to the case of Petitioner and the same has been misapplied to Petitioner's case. The Tribunal observed that Rule 7 would apply to Petitioner's case, but however, neither in the show cause n....
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....dix-A did not provide for duty free clearance of the seized jewellery. The Additional Commissioner of Customs passed an order confirming confiscation of the jewellery valued at Rs. 1,20,35,000/- and imposed a penalty of Rs. 1,20,00,000/- under Section 112(a) of the Act. (xii) Petitioner challenged the aforesaid order by filing an appeal with the office of Commissioner of Customs (Appeals) who vide his order dated 26th July 2011 allowed the jewellery to be re-exported on payment of reduced fine, in lieu of confiscation under Section 125 of the Act, amounting to Rs. 25,00,000/- and further reduced the penalty to Rs. 20,00,000/-. The Commissioner of Customs (Appeal) allowed re-export on payment of reduced fine and penalty by treating Petitioner as a tourist. (xiii) Being aggrieved by the said appellate order, Petitioner and Respondent both challenged the same by filing a revision application before the Government of India, Ministry of Finance. Petitioner's Revision Application was numbered as 371/71/B/11- RA and Respondents' Revision Application was numbered as 380/44/B/11. (xiv) On 24th February 2012, the Revisional Authority disposed both the aforesaid Revision Applications by a ....
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....ioner further submits that in disembarkment card, there is no provision of mentioning the same. Petitioner further relied upon Circular No. 12 of 2000 issued by Government of India, Ministry of Finance, which states that tourists are allowed to bring their personal effects without endorsement on the passports and without payment of duty, subject to the terms and conditions prescribed in the Rules. Petitioner also submits that Respondents are not justified in relying upon Rule 3 of the Baggage Rules, 1998 for justifying the impugned action. Petitioner, inter alia, therefore, submitted that the impugned order to the extent that it confirms the redemption fine and personal penalty of Rs. 20,00,000/- and Rs. 15,00,000/-, respectively, be quashed and Respondents be directed to refund the said sum of Rs. 35,00,000/-. Petitioner has not prayed for interest in the petition. 4. Submissions of Respondents:- Respondents submitted that Petitioner is in the business of jewellery and, therefore, he has brought this chain with pendant in which diamonds are embedded for sale in India. Respondents further submitted that the said chain with pendant cannot be treated as "personal effects", so as to....
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....E. APPENDIX - A (See rule 3) (1) Articles allowed free of duty (2) (a) All passengers of and above [10 years] of age and returning after stay abroad of more than three days. (i) Used personal effects, excluding, jewellery, required for satisfying daily necessities of life. (ii) [Articles other than those mentioned in Annex. I upto a value] of [Rs. 25,000] if these are carried on the person or in the accompanied baggage of the passenger. APPENDIX - D (See rule 6) (1) Jewellery (2) Indian passengers who has been residing abroad for over one year. (i) Jewellery upto an aggregate value of Rs. 10,000 by a gentleman passenger, or (ii) Upto an aggregate value of Rs. 20,000 by a lady passenger. APPENDIX - E (See rule 7) (1) Articles allowed free of duty (2) [(a) Tourists of Indian origin coming to India other than tourists of Indian origin coming by land routes as specified in Annexure IV] (b) Tourists of foreign origin other than those of Nepalese origin coming from Nepal or of Bhutanese origin coming from Bhutan or of Pakistani origin coming from Pakistan. (c) Tourists Nepalese origin coming from Nepal or of Bhutanese origin coming from Bhutan. [(d) Tourists - ....
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....22:04 hours on 6th May 2007. If the flight in which Petitioner was travelling landed at 22:04 hours then we fail to understand as to how the panchas were called by the Intelligence Officer of Customs at 22:00 hours at the exit gate of the Arrival Hall, Terminal 2A of the Airport. A passenger travelling in flight cannot arrive at the exit gate of arrival hall before landing and, therefore, there is a serious infirmity in drawing up the panchnama which on the face of it appears to be an afterthought. The said certificate issued by the Airlines has not been controverted by Respondents. (ii) In the cross-examination of Mr. Pravin Mahale, Preventive Officer, who has drawn panchnama, he has stated that he noticed Petitioner around 10:00 p.m. to 10:15 p.m. and the witnesses were called immediately after interception. The said officer in his cross-examination stated that the flight DL-16 arrived at 9:40 p.m. and he further stated that it is possible to arrive at the arrival gate within 30 minutes and he noticed Petitioner in the arrival hall at around 10:00 p.m. In our view, the statement of Mr. Mahale-Preventive Officer is contrary to the certificate issued by the Airlines certifying the....
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....veracity of the panchnama in the absence of the cross-examination is in serious doubt. (v) In the show cause notice dated 12th October 2007, Respondents have invoked Rule 6 of the Baggage Rules 1998 for coming to the conclusion that Petitioner cannot be allowed to import free of duty jewellery above Rs. 10,000/-. The said show cause notice dated 12th October 2007 culminated into Order-in-Original and it was further subject matter of appeal to the Tribunal. The Tribunal, vide its order dated 8th October 2009, held in paragraph 5 of its order that Rule 6 of the Baggage Rule 1998 is not applicable to the Petitioner's case since Petitioner was not an Indian resident who visited U.S.A. and returned to India and Rule 6 is applicable to an Indian returning to India from foreign tour. This finding of the Tribunal has attained finality since it was not challenged by Respondents before the High Court in Customs Appeal No.31 of 2010. Therefore, in our view, further adjudication, in remand proceedings on the basis of Rule 7 of the Baggage Rule 1998 would amount to travelling beyond the show cause notice and it is settled position that the Order-in-Original cannot go beyond the show cause noti....
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....the cap on the value of article to be imported free of duty. However, in Appendix-E (a) (i), jewellery is not excluded from personal effect and, therefore, when in Appendix-E (a) (ii) articles as allowed to be cleared under Rule 3 is referred, same will have to be construed to mean articles other than what is covered in Appendix-E (a) (i) and since (i) includes within its fold, jewellery, therefore, Appendix-E (a) (ii) would not be applicable to the facts of the present Petitioner. In Appendix A and B, jewellery is excluded from personal effect whereas in Appendix-E, jewellery is not excluded from personal effects but on the contrary, as per Circular No. 72 of 1998 dated 24th September 1998 explaining Baggage Rules, 1998, it is clarified that personal jewellery is included within the meaning of the term "personal effects". Therefore, even if in Appendix-E (a)(ii), there is a reference to article as allowed to be cleared under Rule 3, same would not be applicable to the facts of the Petitioner's case. (viii) Appendix-E (a) (i) refers to articles allowed free of duty and as observed above, jewellery is included within personal effects, if the jewellery is used for personal use and a....
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....produced an invoice dated 22nd October 1989 to prove that the diamonds which were embedded in the pendant, were purchased by him from a U.S.A. jeweller. The said invoice is rejected by Respondents only on the ground that the invoice is not signed by the seller. In our view, merely because the invoice is not signed by the seller could not have been a ground for rejecting the evidence. The adjudicating authority could have inquired from the seller from New York by writing a letter on the genuineness of the said invoice. However, no such steps were taken by the authorities and merely because the invoice did not bear the signature, the same came to be rejected. It is not uncommon that many times, the invoices are unsigned, but that cannot be the sole basis for rejecting the same. (xi) The phrase "personal effect" has to be construed in the context and cannot be interpreted dehors the facts of a particular case, more particularly when what is being considered is the value of the article. In the instant case, one cannot lose sight of the fact that Petitioner is engaged in the business of jewellery in U.S.A. for last 25 years and has been declaring income in the U.S.A. of USD-1,50,000/-.....
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.... of the argument that since all the jewellery is to be taken out of India, it was, therefore, deliberately brought to India for taking it to Singapore. Foreign tourists are allowed to bring into India jewellery even of substantial value provided it is meant to be taken out of India with them and it is a pre-requisite at the time of making endorsements on the passport. Therefore, bringing jewellery into India for taking it out with the passenger is permissible and is not liable to any import duty. Learned senior counsel brought to our notice that even as per EXIM Code Numbers 7113 19 20 and 7113 19 30 of ITC (HS) Classification of Export and Import items as on 1-4-2002, the import of gold jewellery studded with diamonds or with other precious stones, is freely allowed. Similarly, learned senior counsel rightly submitted that the invocation of Section 80 of the Act is of no use as this Section applies only to dutiable and prohibited goods. The accusation of not declaring the goods to the customs authority and evading duty alleged to be due thereupon has no legal basis." (xiii) Our views are also fortified by the decision of the Kerala High Court in Vigneswaran Sethuraman Vs. Union o....