Customs, Excise and Gold Tribunal - Mumbai
Uma Balasaraswathi vs Collector Of Customs on 3 August, 1987
Equivalent citations: 1988ECR152(TRI.-MUMBAI), 1988(37)ELT106(TRI-MUMBAI)
ORDER K. Gopal Hegde, Member (J)
1. This appeal arises out of and is directed against the Order bearing No. AIR/CUS 49/4673/85, dated 3-6-1985 passed by the Additional Collector of Customs, Airport. The brief facts necessary for the disposal of the appeal may be stated as under :-
2. The appellant accompanied by her two daughters and mother-in-law arrived at the Bombay Airport on 3-6-1985 from New York. All of them went to red channel of the Customs Baggage hall. The appellant declared goods valued at Rs. 20,700 and also 4 gold bangles weighing 200 gms. valued at Rs. 24,800. The Customs Officers were not satisfied with the declaration, examined her baggage and found that the value of the goods declared was less by Rs. 6.800/-. They further found that she had not declared 8 gold bangles weighing 425 gms. valued at Rs. 52,700/- which were worn by her daughters and mother-in-law. According to the Customs, all the 12 bangles were in crude form and therefore they attracted the provisions of Section 13(1) of the Foreign Exchange Regulations Act and as such became liable to confiscation under Section 111 (d) of the Customs Act and 8 bangles in respect of which there had been no declaration also became liable to confiscation under Section 111 (1) of the Customs Act.
3. Since the appellant waived the written show cause notice, the Additional Collector after according a personal hearing ordered absolute confiscation of the 12 bangles but released goods valued at Rs. 20.700/- under Baggage Rules and he ordered release of Minolta camera valued at Rs. 3000/- under the T.R. rules and he further ordered for release of the remaining goods valued at Rs. 3,800/- under the Baggage Rules. He also imposed a personal penalty of Rs, 30.000/- on the appellant.
4. Feeling aggrieved by the order of confiscation of the bangles and penalty of Rs. 30.000/-, the appellant had filed this appeal. Shri Chander Kumar, appellant's learned advocate firstly submitted that the order of confiscation under Section 111 (d) was made on the ground that there was violation of the provisions of Section 13(1) of the Foreign Exchange Regulations Act. He urged the finding of the Additional Collector that there was violation of Section 13(1) of the FERA is erroneous. He contended that even according to the Additional Collector, her daughters and mother-in-law were wearing the bangles and therefore they are to be treated as ornaments or jewellery and not bullion or primary gold. The Additional Collector, according to Shri Chander Kumar, had observed in his order that the bangles were in crude form but then the Additional Collector failed to take into consideration that that were the type of bangles which were formed and sold in America. The appellant had stated that they were purchased in America and there was no evidence to contradict her statement. In the said circumstances, the order of confiscation under Section 111 (d) for violation of Section 13(1) of the FERA is bad in law.
5. The next contention of Shri Chander Kumar was that the appellant had admittedly gone to the red channel and all the bangles were worn either by herself, or by her mother-in-law or by her daughters and they were not concealed and therefore it cannot be said that there had been no effective declaration on her part. In any case, the Customs Officers have not questioned the grown up daughters or the mother-in-law and therefore it cannot be contended that there was non-declaration. There was no allegation of concealment either by the appellant or by her mother-in-law or by her daughters. The bangles were visible to the naked eyes. All had gone to red channel and in the circumstances, the Additional Collector was not correct in holding that the bangles became liable to confiscation under Section 111 (1). Shri Chander Kumar further submitted that the appellant and husband were in the United States for over 12 years. Out of the husband's savings, the bangles were purchased. The appellant and her daughters were coming on transfer of residence. They were entitled to bring gold jewellery worth Rs. 3,000/- each. The Additional Collector had extended the benefit of T.R. in respect of other goods. He ought to have extended the benefit of Baggage Rules in respect of jewellery and therefore the order of absolute confiscation is bad in law.
6. It was next contended by Shri Chander Kumar that the appellant had not corn-mined any offence. Even the non-declaration was in respect of an old camera and some other miscellaneous goods which the Collector himself has allowed on T.R. and under Baggage Rules. In the circumstances, there was hardly any Justification for the Collector to impose penalty much less a penalty of Rs. 30.000/- on the appellant.
7. Shri Pattekar appearing for the Collector supported the order passed by the Additional Collector. He contended admittedly the appellant did not declare the gold bangles worn by her daughters and mother-in-law. The bangles on her person as well as on the person of her daughters and mother-in-law cannot be considered as ornaments having regard to the shape and the crude form. In the circumstances, the Additional Collector was justified in ordering absolute confiscation. Shri Pattekar urged that the order of confiscation both on the ground of violation of Section 13(1) of the FERA and on the ground of non-declaration was correct. Since the value of the goods not declared amounted to Rs. 57.000/-, the penalty of Rs. 30.000/- imposed was also justified. Shri Pattekar further submitted that non-declaration of the gold bangles worn by the daughters and mother-in-law was with a view to evade payment of Customs duty and on this ground also, the Additional Collector was justified in ordering confiscation and imposing penalty. Finally, Shri Pattekar submitted that the appellant or the mother-in-law had not produced any bill or voucher in support of the purchase. He, therefore, prayed that the appeal may be rejected.
8. We have carefully considered the suimissions made on both sides. The following facts are undisputed. The appellant's husband was a Doctor and was working in United States for a period of 12 years. The appellant and her two daughters were also staying in United States but then there is no evidence as to the duration of their stay. The appellant and her daughters have come on T.R. In his order, the Additional Collector had allowed one item on T.R. Though according to the Customs authorities, there was non-delaration with regard to that item namely old camera. The Additional Collector had also allowed miscellaneous goods worth Rs. 3.800/- in respect of which there was no declaration. He had further allowed goods worth Rs. 20.700/- under the Baggage Rules.
9. The appellant with her daughters and mother-in-law had gone to red channel. The appellant had declared 4 bangles which she was wearing. No declaration was obtained of the other three persons, namely daughters and mother-in-law. There is no allegation that the gold bangles worn by them were concealed. The declaration contemplated by Section 77 of the Customs Act is the contents of baggage. The said section does not contemplate of making declaration of the articles worn on the person. See the proviso to Rule 4 of the Tourist Baggage Rules, 1978. As stated earlier, there was no allegation of concealment of the bangles worn by the daughters and mother-in-law and if there was no concealment and if they are visible to naked eyes it cannot even be said that there was non-declaration particularly when those persons were not questioned and when they had come to the red channel. In the circumstances, the Additional Collector was not justified in holding that there was non-declaration in regard to the bangles worn by the two daughters and mother-in-law. The non-declaration which entails confiscation under Section 111 (1) should be conscious and intentional non-declaration and would not take within its ambit more unintentional omission such as not declaring the ornaments worn on the person which are not at all concealed but are visible to the naked eye, and therefore we set aside that part of the order of the Additional Collector namely that the bangles became liable to confiscation under Section 111 (1) of the Customs Act.
10. The other ground on which the Additional Collector had ordered confiscation of the bangles was that they were in crude form and they are nothing but gold strips shaped and welded in circular form. The Additional Collector has further described as they are nothing but gold bullion shaped into Jewellery of crude form. The appellant had contended that the bangles were purchased in the United States and that thatwere the type of bangles available there. The Additional Collector's order does not indicate that he had obtained any expert opinion. His order also does not indicate that the purity of the bangles were ascertained. His finding that they were nothing but gold bullion is not based on any acceptable evidence. In fairness, the Additional Collector ought to have found out whether bangles are sold in United States in such form and also should have tested them for their purity. The Additional Collector himself described them as bangles. He also says that they are shaped as jewellery in crude form. If they are jewellery even if they are in crude form, there would be no violation of the provisions of Section 13(1) of the FERA. Baggage Rules permits import of gold jewellery in the actual use of the passenger of the value of Rs. 3.000/- in the case of a female and Rs. 1,500/- in the case of a male as baggage item free of duty if the passenger has been residing abroad over a year. The appellant has stated that she and her daughters were with her husband for over two years. Therefore, they would have become entitled to the benefit of Rule 6 of the Baggage Rules, 1978. Similarly, if the mother-in-law had been residing abraod for over one year and if the bangles were in her actual use she would also be entitled to the benefit of the above said rule. Since the Additional Collector had allowed one item under T.R. the appellant satisfies the condition of minimum stay abroad but then we have no evidence as to the minimum stay of her daughters and mother-in-law. Passports could be looked into. In any case, the finding of the Additional Collector that the bangles worn by the appellant and her daughters and mother-in-law are nothing but gold bullion is not supported by any acceptable evidence. He has not even tested their purity. Purity cannot be determined by visual inspection. In the circumstances, it is difficult to uphold his order of confiscation under Section 111 (d). We accordingly set aside the order of confiscation made under Clause (d) of Section 113.
11. The only aspect that remained for consideration is about the penalty of Rs. 30.000/- imposed on the appellant. The penalty appeared to have been imposed mainly on the ground of non-declaration of jewellery and also on the ground that jewellery are not jewellery but gold bullion. We have set aside that part of the order by which the Additional Collector ordered confiscation of gold jewellery. Regarding other two items the Addl. Collector had condoned and allowed clearance under T.R. and Baggage Rules. In the circumstances, no penalty is imposable. Hence we set aside the penalty on the appellant.
12. In the result, we allow this appeal and set aside the absolute confiscation of 12 gold bangles and we also set aside the personal penalty of Rs. 30.000/- imposed on the appellant. The penalty if paid shall be refunded to her.
13. As there is no precise evidence as to whether the appellant and her daughters and her mother-in-law are entitled to the benefit of Rule 6 of Baggage Rules, we remand the matter to the Additional Collector for the limited purpose of deciding the issue regarding the eligibility of the appellant, her daughters and her mother-in-law to the benefit of Rule 6 of the Baggage Rules. If the appellants and the others are entitled to the benefit then they shall be granted the benefits to which they are entitled and the excess shall be released under the Baggage Rules subject to payment of duty. In the event of the Additional Collector holding that the appellant and the others are not entitled to the benefit of Rule 6 of the Baggage Rules all the bangles shall be released under the Baggage Rules, 1978, subject however to payment of duty.
Sd/- Sd/- (K.S. Dilipsinhji) (K. Gopal Hegde) Member (Technical) Member (Judicial) Bombay, 25-3-1987 K.S. Dilipsinhji, Member (T)
14. I have given serious consideration to the draft order of Brother Hegde but for the reasons which follow I am not able to agree with his conclusion and hence this differing order. The facts of the case as well as the salient contentions advanced by both the sides have been recorded in Bro. Hegde's order and, therefore, they need not be repeated.
15. The prayer in the written memo of the appeal is for setting aside the order passed by the Additional Collector confiscating the 12 gold bangles and levying a penalty of Rs. 30.000/- on the appellant Smt. Uma Balasaraswathi. The Additional Collector passed the aforesaid order as he held that the gold bangles imported by the appellant were not jewellery but gold bullion import of which was prohibited under Section 13 of the Foreign Exchange Regulations Act read with Section 11 of the Customs Act and hence he held that the articles were liable to confiscation under Section 111 (d) of the Customs Act and he ordered accordingly. The Additional Collector further found that the appellant declared only 4 out of 12 bangles and that there was a deliberate intention to evade the duty leviable on the import of the gold bangles. There had been further misdeclaration with regard to the contents of the baggage and for the aforesaid acts of omissions and commissions the Additional Collector levied the penalty of Rs. 30.000/- under Section 112 of the Customs Act, on the appellant.
16. The main contention advanced on behalf of the appellant is that she and her husband had been residing in the United States for about 12 years and she and her husband were returning to India and were eligible to the benefit of the Transfer of Residence Rules concessions. Her mother-in-law was also returning with her. The appellant had pleaded that she was married at the age of 18 and since then she had lived in the USA and she had now been returning for permanent settlement in India. The bangles had been purchased from time to time and they were freely available. The bangles were purchased out of her husband's life savings and were meant for two daughters. She was not aware of the Indian laws and the bangles were worn by her mother-in-law and her two daughters on arrival. There was therefore, no question of non-declaration. The bangles were purchased at the price of 300 US $ per ounce of gold while the price in India at the time of import was Rs. 228 per gm. of gold. The appellant had gone to the red channel at airport. There was therefore no effective non-declaration of the bangles. The appellant was entitled to the benefit of Transfer of Residence Rules Concessions. Her mother-in-law had gone to USA in November, 1984 and she returned with the appellant on 3-6-1985. Shri Chander Kumar pleaded that the Collector's finding that the bangles were gold bullion was not valid and he relied in this behalf on the decision reported in 1984 (17) E.L.T. 46. He further submitted that the bangles were classifiable as jewellery and hence were not covered by FERA. There was, therefore, no violation of FERA by the applicant. It was also not correct to say that the appellant did not make the declaration of the bangles. Hence Section 111 (1) of the Customs Act was not attracted. This was not a case of smuggling and hence the order of confiscation and levy of penalty was bad. The appellant was wearing one mangalsutra, one gold chain, and 4 bangles. In these circumstances, the learned advocate pleaded that the Additional Collector's order should be set aside.
17. It is seen that these arguments had been taken into consideration by the Additional Collector in passing the aforesaid order. The Additional Collector relied on the statement recorded from the appellant under Section 108 of the Customs Act. In this statement the appellant admitted that she did not declare 8 bangles which were worn by her two daughters and her mother-in-law. The purpose of non-declaration was to avoid payment of customs duty. The gold bangles were meant for making ornaments for her daughters. It has been further mentioned that these were purchased about a month ago and were meant to be converted into jewellery of Indian design. The question therefore arises whether in the aforesaid circumstances the Additional Collector was wrong in holding that the gold bangles were gold bullion and not jewellery: The appellant's advocate has contended that in the Additional Collector's view the gold bangles had high purity and were not very well polished. The purpose of importing is also for reconverting into jewellery of India design. The Additional Collector inspected the gold bangles and came to the conclusion that they were in the form of crude ornaments and they were nothing but gold strips shaped and welded in circular form. He, therefore correctly held that the articles in question were not classifiable as gold jewellery and they were more appropriately classifiable as gold bullion. The appellant has further admitted that all the gold bangles belonged to her and only for the purpose of importing into India they had been worn by different members of her family. The question therefore arises as to whether any benefit can be given to passengers other than the appellant as held by Bro. Hegde in his draft order. Examining this aspect further it is seen that the appeal is filed only by the appellant and if any benefit can be given under the Baggage Rules, it can be only given to her and to her two daughters and not to her mother-in-law from whom there is no appeal. Besides, the gold bangles do not belong to the mother-in-law of Smt. Uma Balasaraswathi and therefore under the Baggage Rules, even if it has to be held, as Bro. Hegde has held, that the items imported are jewellery, no benefit can be given to the mother-in-law of the appellant as there is no appeal by her. Apart from this, it is seen that under Rule 6 of the Baggage Rules, jewellery in actual use of a passenger who has been residing abroad for over one year can be allowed to be imported free of duty to the extent of Rs. 3.000/- by a lady. As per the learned advocate's submission the mother-in-law of the appellant had left India only in November 1984 and she returned with the appellant on 3-6-1985. Therefore, she was not out of India for one year and even on this consideration also she is not eligible to any Baggage Allowance in this behalf as held by Bro. Hegde. The same fact also applies to the two daughters of the appellant. It has been urged by the learned advocate that the two daughters were schooling in India for the last 2 years and they had gone for a brief visit to meet their parents in the USA before their return permanently. Therefore, even if we were to ignore that the gold bangles belonged to the appellant, there is no question of her daughters being eligible to the benefit of Baggage Rules in respect of the two gold bangles worn by each of them. Apart from this, it is seen that the total value of jewellery which can be cleared free of duty in favour of a lady passenger is Rs. 3.000/-. In the present case, the value of even one bangle is more than this limit and therefore, in practice also no benefit of free allowance under Rule 6 can be given to the appellant or to her daughters and mother-in-law. The learned advocate had urged that such bangles were freely available in the USA. Whether this is so or not is not relevant for the purpose of this appeal. What is relevant is the classification of the imported item as gold jewellery or gold bullion and for this purpose it is the conditions in India which require to be taken into account and not the conditions in the USA. Apart from this, there is a clear admission on the part of the appellant that the gold was imported in the guise of bangles for the purpose of avoiding duty. In face of this admission, there is no need to consider the learned advocate's argument about free availability of such types of bangles in the USA. The Additional Collector in fact examined the bangles and came to this conclusion. This is a better form of evidence than the opinion of anyone else. There is also no contention on the part of the appellant that the gold bangles were items of jewellery. They were purchased only a month ago and they were distributed among different passengers to avoid payment of duty as admitted by the appellant. The fact that these were worn on the person would not therefore make any difference to the character of the item which is classifiable as bullion. 8 of these bangles which were worn by two daughters and mother-in-law of the appellant were not declared. Under Section 77 the owner of the baggage has to make a declaration of its content to the proper officer. Bro. Hegde in his order has held that the items worn by a passenger are not required to be declared in terms of Section 77 as they are not the contents of the passenger's baggage I differ from the findings of the learned brother in this behalf. If these findings were to prevail, it would be possible for smugglers to smuggle any articles on their person without discharging the legal onus of declaration as required under Section 77. The contents of the baggage as envisaged under Section 77 does not mean what is contained in the bags or suitcases. The contents of the baggae would encompass all items brought by a passenger as his baggage. Under Section 2(3) "baggage" has been defined to include accompanied baggage excepting a motor vehicle. Though this is an inclusive definition this definition along with the provisions of Chapter XI and the Baggate Rules, 1978 as framed under Section 79 by Notification No. 101/Cus., dated 16-5-1978 as amended leave no doubt that all articles imported by a passenger with him on person or in his accompanied baggage fall within the category of his baggage and under Section 77 the passenger is required to make a correct declaration of the same. It is only in such a case that the benefit of Section 80 would be available to the passenger. If therefore, it were to be argued that articles worn on person or brought in the pocket of the clothes worn by a passenger were not to be declared under Section 77, they cannot get the benefit of export under Section 80. This is really not the intention or the interpretation of Section 77. Therefore, with great respect to Bro. Hegde I disagree from his finding that the gold bangles worn by the appellant and the other members of the family were not required to be declared by the appellant or by the other members of her family on arrival in India.
18. As regards the Additional Collector's order of levy of a penalty of Rs. 30,000/- on the appellant, the learned advocate contended that this was not a case of levy of penalty. He further replied to a query from the Bench that the penalty was levied only in respect of the importation of the gold bangles and not for the non-declaration of the items of the appellant baggage valued to the tune of Rs. 6,800/-. There is no such finding in the Collector's order. The perusal of the Collector's order reveals that there was a deliberate intention to import gold in the guise of gold bangles by the appellant. The bangles had been purchased just a month ago before the appellant's arrival in India. The purpose was to convert the bangles into jewellery of Indian designs and to keep them for the marriage of her two daughters. Wearing of the bangles by the different members of the appellant's family would not therefore affect this position. Smt. Uma Balasaraswathi was aware that she had purchased 12 bangles, and yet even when she was questioned to declare as to whether there was any more jewellery to declare she replied in the negative. The bangles worn by the mother-in-law and the daughters of the appellant were not declared to the Customs Officers. Since this is a deliberate case of import of the gold bullion in the guise of jewellery I find that the Additional Collector had rightly levied a penalty of Rs. 30,000/- on the appellant under Section 112 of the Customs Act. The values of the 12 gold bangles are Rs. 77,500/- Compared to this the penalty of Rs. 30,000/- is neither harsh nor excessive. In the aforesaid circumstances, I hold that the Additional Collector's order of absolute confiscation of the 12 gold bangles valued at Rs. 77,500/- is correct. Similarly, I hold that his order of levy of penalty of Rs. 30,000/- under Section 112 is also corrett, and proper in the circumstances of the case. Accordingly, I confirm the Additional Collector's order and reject the appeal of Smt. Uma Balasaraswathi.
Sd/-
(K.S. Dilipsinhji) Member (Technical) Bombay Dated : 9-4-1987 Point of difference
19. Since there is a difference of opinions on the part of the two members this matter is referred to the President in terms of Section 129-C of the Customs Act to decide the following point of difference :-
Whether in the facts and circumstances of the case,
(i) the Additional Collector's order of absolute confiscation of 12 gold bangles and levy of penalty of Rs. 30,000/- on the appellant should be set aside and her appeal allowed and (ii) the case remanded to the Additional Collector for consideration as to whether the appellant, her two daughters, and mother-in-law are entitled to the benefit of Rule 6 of the Baggage Rules as held by Member (Judicial) OR the Additional Collector's order should be confirmed and the appeal should be rejected as held by Member (Technical).
Sd/- Sd/-
Member (Judicial) Member (Technical)
9-4-1987 9-4-1987
On Difference of Opinion between Member (T) and Member (J)
OPINION
20. The following points of difference occurring between the two learned Members - Member (Technical) Shri K.S. Dilipsinhji and Member (Judicial) Shri K. Gopal Hegde - has been referred to me by the Hon'ble President under Section 129-C(5) of the Customs Act for my opinion:
(i) Whether in the facts and circumstances of the case, the Additional Collector's order of absolute confiscation of 12 gold bangles and levy of penalty of Rs. 30.000/- on the appellant should be set aside and her appeal allowed; and
(ii) the case remanded to the Additional Collector for consideration as to whether the appellant, her two daughters and mother-in-law are entitled to the benefit of Rule 6 of the Baggage Rules as held by Member (J) or the Additional Collector's order should be confirmed and the appeal should be rejected as held by Member (T).
21. Facts of the case have been set out in the opinions of the two learned Members. Therefore, I need not repeat the facts here. They would, however, be referred to as and when necessary.
22. Shri K. Srinivasan, learned Consultant has appeared for the appellant and Shri N.K. Pattekar, learned JDR has appeared for the respondent.
23. The adjudicating authority, namely, Additional Collector of Customs (Airport) has confiscated 12 gold bangles under Section 111 (d) of the Customs Act inasmuch as he has considered them not as gold jewellery but as "gold strips shaped and wedded into circular form. They are nothing but gold bullion, shaped into jewellery of crude form". In arriving at this finding, learned Additional Collector has gone by examination of the goods by himself. He has not taken any expert opinion as to whether these are considered as jewellery or not or whether these are high purity or not. Appellant on the other hand asserts and also stated by her in her statement dated 3-6-1985 recorded on the spot when she arrived in India that these are ornaments and jewellery freely sold in U.S.A. and these were purchased by her from earnings of her husband. The bangles were brought, according to the appellant's statement dated 3-6-1985 for conversion into ornaments for her daughters.
24. Learned Cunsultant for the appellant has urged that in terms of Central Government Notification No. 12(11)F1/48, dated 25-3-1948 in Foreign Exchange Regulation Act import of gold and silver no doubt is prohibited but it can be brought into India if there is a general or special permission of the Reserve Bank of India. He has also pointed out that there is, however, a general permission for bringing or sending into India personal jewellery made wholly or mainly of gold or silver, which is worn on the person or the traveller or forms part of his personal effects or personal baggage and which is allowed by the customs either free or on payment of duly. (Emphasis is supplied by the learned Consultant). He has also stated that jewellery as such is not defined in the FERA. Since the bangles in question had been brought by the appellant and her family as personal jewellery under the Baggage Rules made under the Customs Act, definition given in the Customs Tariff Act under Chapter Notes 7(b) of Chapter 71 of the Schedule to the Customs Tariff Act should be adopted. According to the said definition, jewellery means, inter alia, "small objects of personal adornment". Bangles in the instant case clearly satisfies this definition of jewellery under the Customs Tariff Act, 1975. There is no mention in the definition that crude jewellery is not to be considered as jewellery. Learned Consultant has pointed out that the adjudicating authority has gone on some pre-notions regarding the definition of jewellery and appears to have gone on the definition of ornaments given in the Gold (Control) Act which has no application to the jewellery imported from outside.
25. I have carefully considered the pleas of the appellant. I am inclined to agree with her plea and the finding of learned Member (J) Shri Hegde insofar as this issue is concerned. Accordingly, 12 bangles in question are not liable to confiscation under Section 111 (d) as has been held by the learned adjudicating authority and the learned Member (T).
26. Eight out of the 12 bangles have been confiscated by the learned adjudicating authority under Section 111 (1) of the Customs Act on the ground that these were not declared to the Customs Officer at the counter by the appellant. She has inter alia declared only 4 bangles worn by herself but the other 8 bangles, namely 4 worn by her mother-in-law and 2 each worn by her daughters had been held by the learned adjudicating authority as having not been declared and therefore the bangles have been confiscated absolute-Bunder the aforesaid provisions. Learned Consultant for the appellant has reiterated the findings arrived at by the learned Member (J) Shri Hegde on this score that the 8 bangles in question were not required to be declared inasmuch as they were worn by the passengers and were very much before the eyes of the Customs Officer at the counter. What is required to be declared, according to the learned consultant and as held by the learned Member (J), under Section 77 of the Customs Act, is all the goods which are in the baggage of the passengers, i.e. in the bags, suit cases or trunks carried by the passengers. Learned Consultant for the appellant has elaborated this point by saying that no helpful definition of baggage is given in the Customs Act. It is merely an inclusive definition including unaccompanied baggage. He has, however, stated going by the use of this term under the various provisions of the said Act, and the various Rules made thereunder, there is an internal evidence that the term baggage applies to the bags, suit cases and trunks terming part of the luggage of the passenger. It states that Section 77 speaks of "contents" of the baggage. Contents would imply a container according to the learned Consultant. It would naturally exclude things on the person of a passenger. A passenger by any means cannot be taken as a container. Similarly, he draw the attention to Sections 36 and 39 of the Act which speaks of loading and unloading of goods other than baggage. This means according to him baggage means suit cases and trunks. For this propostition learned Consultant relies on a judgment of Delhi High Court in the case of Khalil Kecher in of Teheran 1970 Criminal Law Journal 417. The ratio of Delhi High Court decision relied upon by the learned consultant is not quite appropriate to the question under examination in this case. In that case the Hon'ble Court did not examine the question whether anything worn on the person of a passenger form part of the baggage or not and is required to be declared or not under Section 77 of the Customs Act. If a narrow meaning to the term baggage to the effect that anything worn on the person of the passenger would not be covered by the term baggage is given, then as rightly observed by the learned Member (T), it would lead to a great scope for smuggling of the goods by unscrupulous international passengers. Such a narrow meaning would, therefore, defeat an important object which is to prevent smuggling of goods across the borders of the country. The fact that even personal jewellery worn by a passenger is also required to be declared, is apparent from Sr. No. 13 of the "baggage declaration form" prescribed under the regulations made under Section 81 of the Act, this serial number reads as under :
"13. Personal jewellery in use."
27. Be that as it may, what is required to be seen in this case, whether appellant has indulged in the act of non-declaration of gold bangles requiring the goods liable to confiscation under Section 111 (1). The learned consultant has stressed that the learned Member (T) 's finding of non-declaration has relied heavily on the statement dated 3-6-1985 of the appellant as well as the pleadings recorded by the adjudicating authority in the impugned order of the Additional Collector. Learned Consultant has pointed out that this statement was given by the appellant under a lot of strain when she had been travelling in an economy class of the aeroplane for the past 24 hours, unaccompanied by any male member and accompanied by two grown up daughters and an aged mother-in-law. What appears to have happened, according to the learned consultant, is that when the appellant made a declaration regarding the goods the Custom Officer at the counter might have asked her whether the appellant has any jewellery to declare after seeing the 4 bangles worn by her. She made a declaration accordingly. The next question possibly could be that did she have anything else to declare. The passenger might have taken this question as addressed to herself alone and therefore possibly she did not declare the gold bangles worn by other members of the family. This is apparent from 4th para of her statement made on 3-6-1985 which reads as follows:
"On re-examination of my baggage goods worth Rs. 68007- were found lying with 8 gold bangles weighing 425 gms. which were worn by my two daughters and mother-in-law, two each by my two daughters and 4 by my mother-in-law, were not declared."
When the learned consultant was told that his argument appears to be nothing, but merely a figment of imagination, he stated that in any case no mala fides can be attributed to the appellant inasmuch as she had come on her own to the officer at the counter at the red channel. This implies that the appellant came with the intention of subjecting herself and her members of the family and the goods carried by them to full examination by the customs officers at the counter. Bangles having been worn by all the passengers there could be no intention in concealing them or thereby non-declaring them. He has also pointed out that it is obvious from the statement that it has been recorded by an officer of the customs and the statement is not in the appellant's own hand. Wording of the statement which appears to have highly legal language also indicates that the statement should be read with caution and should not be taken entirely on its face value. Similarly, the learned Consultant pointed out that the record of pleadings made by the learned adjudicating authority during the course of oral hearing should not also be relied upon very much in the circumstances of the case inasmuch as no written show cause notice was issued to the appellant and the declaration regarding waiver of show cause notice was got signed from the appellant without fully explaining to her the consequences. There could also be a possibility of a communication gap between the appellant and the learned adjudicating authority.
28. I have carefully considered the various pleas of the learned Consultant regarding non-declaration and have referred to the various facts and circumstances mentioned by him which have also been duly taken into account by the learned Member (J) in his findings. I am inclined to give the benefit of doubt to the appellant regarding the charge of non-declaration or under declaration of the goods under Section 77 of the Customs Act. Accordingly, 8 bangles are not liable to confiscation as has been held by the learned adjudicating authority and confirmed by the learned Member (T).
29. In the aforesaid circumstances, absolute confiscation of the 12 bangles and penalty of Rs. 30.000/- imposed on the appellant is set aside as held by the Member (J).
30. For the reasons given by the learned Member (J) the case regarding charge of appropriate duty after allowing concession admissible to the appellant under the Baggage Rules in respect of the jewellery is required to be remanded to the Additioinal Collector. It will not be appropriate for us to decide the question that no free allowance under the Baggage Rules is admissible to the appellant in respect of the jewellery inasmuch as the learned adjudicating authority at the original stage has not applied his mind to that aspect at all.
31. Having regard to the aforesaid findings on various issues, I agree with the order passed by the learned Member (Judicial).
Sd/-
(P.C. Jain) Member (Technical) Bombay, 31-7-1987.
FINAL ORDER
32. The point of difference between the two Members of this Bench was referred by the President in terms of Section 129-C of the Customs Act to the third Member Shri P.C. Jain who has since recorded his finding. The appeal is required to be disposed of on the basis of majority view in terms of Section 129-C. In the majority view, the Additional Collector's order of absolute confiscation of 12 gold bangles and levy of penalty of Rs. 30.000/- on the appellant Smt. Uma Balasaraswathi is set aside and her appeal is allowed and the matter is remanded to the Additional Collector for consideration afresh as to whether the appellant, her 2 daughters and mother-in-law are entitled to the benefit of Rule 6 of the Baggage Rules.