Customs, Excise and Gold Tribunal - Tamil Nadu
Liaquat Ali Hameed vs Commissioner Of Customs on 27 June, 2003
Equivalent citations: 2003ECR49(TRI.-CHENNAI), 2003(156)ELT863(TRI-CHENNAI)
ORDER Jeet Ram Kait, Member (T)
1. This appeal is directed against the order in original No. 56/2002-INT, dated 23-7-2002 passed by the Commissioner of Customs (Airport) Chennai by which the Commissioner has confiscated electronic goods of foreign origin valued at Rs. 24,21,7000/- under Sections 111(d), 111(1) & 111(m) of the Customs Act, 1962, the Act for short, read with Section 3(3) of the Foreign Trade (Development & Regulation) Act, 1992, and allowed the appellant to redeem the goods, except watches which are valued at Rs. 1,08,2000/-, on payment of fine of Rs 15,00,000/-. He has absolutely confiscated watches valued at Rs. 1,08,2000/- under Sections 111(d), (l) & (m) of the Act, besides imposing penalty of Rs. 2,50,000/- on the appellant under Section 112(a) of the Act.
2. Brief facts of the case are that the DRI officers on the basis of information that a passenger by name L. Hameed arriving by Sri Lankan Airlines Flight UL 121 from Colombo at Chennai Airport on 25-11-2001 was bringing electronic goods in trade quantities kept watch for the arrival of the said passenger. The passenger on arrival was identified and was found standing in front of the Customs Table No. 14 where he was waiting for clearance of the baggage after making required declaration to the Customs authorities. He made declaration to the Customs indicating that he was in possession of 6 baggage containing 60 Cellphones valued at Rs. 1,50,000/- and 120 watches valued at Rs. 3,000/- and baggage No. tag UL 272854 and four checked in baggage and two hand baggage. On enquiry in the presence of independent witness the passenger replied that he brought electronic goods of foreign origin of the above noted value contained in six baggage and further explained that out of the six baggage three baggage - i.e. two checked in baggage and one hand baggage were brought by another passenger by name A. Hakkim in the same flight and he brought the other baggage namely two checked in baggage and one hand baggage. He further informed the officers that all the electronic goods contained in the six baggage belonged to him and he undertook the responsibility of clearing all the said six baggage and has made a declaration to that effect before the Customs. The DRI officers also searched the person of the said passenger and found one slip indicating the value and quantity of cellphones model-wise and that of the cameras brought by him. Thereafter the officers examined the above said checked in baggage and two hand baggage in the presence of independent witnesses and found to contain electronic goods such as Zoom Camera, Nokia Cell phones of various makes, adaptors, watches, Philips IC chips, etc. etc. all of foreign origin totally valued at Rs. 24,21,700/-, (CIF) and market value of Rs. 30,00,000/-, as detailed in para 3 of the order in original. All these goods were in trade quantities as the quantity of each item varied from 20 numbers to 1950 numbers. As the appellant had not declared all the above items, the above items were seized as per law under a mahazar. The appellant gave an inculpatory statement before the officers inter alia indicating that he had declared the small value for the purpose of smuggling the goods into the country. He has also narrated the role played by one Shri Sait in bringing the goods to the country and that he was only a carrier of the goods and he used to get Rs. 3,000/- from the said Sait. He has also narrated the modus oper-andi adopted in collaboration with the said Sait in bringing foreign goods into the country. Appellant was arrested on 25-11-2001 and was subsequently detained under COFEPOSA. The residence of the appellant was also searched by the DRI officers on 26-11-2001 and no incriminating documents or material was recovered or seized from there. It was in these circumstances that show cause notice was issued to the appellant and on receipt of the reply to the show cause notice and after considering the submissions made by his Counsel during personal hearing, the present impugned order has been passed against which the appellant has come in appeal.
3. Shri Abdul Jaffer, learned Counsel appeared for the appellants and he invited our attention to the decision of the Larger Bench of the Tribunal in the case of Hemant Bhai Patel v. CC, Ahmedabad reported in 2003 (153) E.L.T. 226 wherein the Bench has held that permission granted for re-export of goods on the basis of a request made by the owner of the goods is outside the purview of the adjudication proceedings in terms of Sections 111, 112 and 125 of the Customs Act, 1962. He has submitted that the appellant has come from Colombo along with six baggage and after collecting the baggage he opted for Red Channel and he was allotted Customs Table No. 14. There, the DRI officers intercepted him on the suspicion that he was carrying electronic goods and that he was likely to misdeclare the same. The DRI officers also seized a baggage declaration made by the appellant, a copy of which is filed at page 6 of the paper book. He has also referred to the statement obtained from the appellant and submitted that his intention was to pay duty, (though he misdeclared) on spotting the DRI officers, the appellant wanted to pay duty. He also submitted that Customs Clearance card cannot be equated with declaration under Section 77 of the Act as it contains different columns and hence it cannot be said that the appellant has made a mis-declaration. He has pleaded that in terms of Section 141 of the Customs Act, 1962, all conveyances and goods in a customs area shall, for the purpose of enforcing the provisions of this Act, be subject to the control of officers of the Customs and in terms of Section 2(11) Customs area means the area of a customs station and includes any area in which imported goods or export goods are ordinarily kept before clearance by Customs authorities. In the present case when the goods were under the control and custody of the DRI Officers, as the goods were seized by the DRI, before the appellant had the option to pay the fine and the appellant would have exercised his valuable right under Section 77 read with Section 80 to re-export. He has also referred to page 70 of the paper book wherein a copy of the order passed by the Joint Secretary on the revision application filed by an applicant, has been filed wherein in similar circumstances, where the goods imported had been allowed to be re-exported on payment of fine and penalty. He has also invited our attention to the order of the East Regional Bench of the Tribunal in the case of Umesh Kumar Singh v. CC, reported in 1992 (62) E.L.T. 655 wherein the Bench has ordered release of the goods in similar circumstances. He has submitted that these orders have not been considered by the adjudicating authority in the present case. The learned Counsel therefore, prayed for allowing re-export of the goods or in the alternative, the appellant be allowed to clear the goods on payment of duty. He also submitted that the value in respect of Nikhon FM 10 Zoom Camera, 25 Nos. while the value taken by the DRI officers is Rs. 45,000/- per piece, the adjudicating authority has adopted the value of Rs. 12,000/- per piece and the plea made by the appellant in this regard has been noted on page 10 of the order impugned. He, submitted that the lower authority has not considered these factors while passing the order in original. He, therefore, prayed for allowing re-export of the goods or alternatively allowing the appellant to clear the goods on payment of duty.
5. Shri P. Devaludu, learned JDR appeared for the Revenue and submitted that the appellant was indulging in organized smuggling of foreign goods into the Country and initially, he made a false declaration that the value of the goods brought by him was only for Rs. 1,53,000/- whereas even according to his own calculation, the total value of the goods brought by him is approximately Rs. 20,00,000/-, though according to the valuation adopted by the department, it comes to Rs. 24,21,700/- as detailed under para 3 of the impugned order. He has also invited our attention to the judgment of the Hon'ble Supreme Court in the case of CC, Bombay v. Elephanta Oil and Industries Ltd. reported in 2003 (152) E.L.T. 257 (S.C.) wherein the Apex Court has ruled that confiscation of the goods and thereafter permitting the importer to re-export the same would not mean that penalty under Section 112 of the Customs Act, 1962 cannot be levied. It was also held therein that power to levy penalty under Section 112 ibid for importation of the goods is different from the power of confiscation of goods under Section 125 ibid and giving an option to pay in lieu of confiscation such fine as the authority thinks fit. He, therefore, prayed upholding the impugned order and dismissal of the appeal.
6. We have considered the submissions made by both the sides and gone through the case records and perused the case laws cited by both the sides. We observe that in this case, on his arrival at the Chennai Airport, appellant made a declaration to the effect that he has brought electronic goods valued at Rs. 1,53,000/- whereas according to his own admission while disputing the valuation adopted by the authorities, goods valued at Rs. 19,96,200/- was brought by him. As could be seen from the initial declaration made by the appellant, a copy of which has been filed in the paper book at page 6, he has made declaration in respect of Cell phone and watches only whereas he has brought a number of other items totally valued at Rs. 24,21,700/- as detailed in para 3 of the order impugned. We have gone through the statement given by the appellant and on a reading of the same it cannot be said that it was not voluntary in nature. In the statement he clearly admitted that he was in the habit of smuggling goods and that he had made 20 visits to Shangai and that he came in contact with one Shri Sait, to organize the smuggling of the goods and that he was being paid Rs. 3,000/- per trip by the said Sait. The goods brought by him were in commercial quantities as could be seen from records and which fact has been admitted by him and hence the lower authority has correctly held that the goods carried by him were not bona fide goods and were intended for trading purpose. This is further corroborated by the fact that the goods were brought by the appellant after a stay of just four days abroad and the appellant wanted to declare only a portion of the goods and accordingly he made a declaration only for Rs. 1,53,000/-. It was later on when he had an apprehension that the DRI officers may intercept him that he came out with another version that he wanted to pay duty and clear the goods. He has also clearly stated before the officers the modus operandi adopted by him along with Sait to smuggle goods into the country and he had also stated that he had removed the baggage tags from four out of the five bags for fear of apprehension by the DRI officers to avoid identification of the bags with him. The fact that the appellant has requested for re-export of the goods in reply to the show cause itself shows that his intention was to smuggle the goods into the country and when he could not succeed in his attempt because of the presence of the DRI officers, he wanted to clear the goods on payment of duty. It is not as if he did not know that when goods are brought from abroad, he has to pay duty and if duty has to be paid, there was no benefit in bringing them for trading purpose and hence an attempt has been made by him to smuggle the goods by declaring only a small portion of the same. The appellant was indulging in smuggling activities and the goods brought by him were for trading purpose in contravention of law is thus established beyond doubt by evidence on record. Therefore, the plea of the appellant that he was not given an opportunity to clear the goods on payment of duty cannot be accepted, given the background of this case and more particularly in view of the fact that he has made an initial declaration declaring that he had brought goods valued only Rs. 1,53,000/- thus making his intention clear that he wanted to smuggle the goods brought by him while coming from Colombo and hence merely because he has opted the Red Channel does not mean that he wanted to pay duty and come out clean. The learned Counsel has relied upon the decision of the East Regional Bench of the Tribunal in the case of Umesh Kumar Singh v. CC, reported in 1992 (62) E.L.T. 655. In that case a passenger had stayed abroad and brought goods of foreign origin in commercial quantities and he opted Red Channel and it was held that the provisions of Section 111 was not contravened because the passenger opted Red Channel and wanted to declare the goods in terms of Section 77 of the Act and it was at that time that the baggage was checked. We are of the considered opinion that this case law will not come to the rescue of the appellant inasmuch as in the present case, the appellant made an initial declaration declaring that he had brought goods valued at Rs. 1,53,000/- and it was later on when he came to know of the presence of DRI officers, he tore off all the baggage tags excepting on one baggage and collected all six baggage and it was at that time he decided to declare all the goods. Later on he himself disputed the value adopted by the authorities and admitted that the value of the goods brought by him was approximately 20,00,000/-. Therefore, it cannot be said that he was not allowed to make a true declaration. Further in the present case, he himself narrated how he has organized smuggling of the goods into the country without paying duty in the earlier occasions. Evidence on record clearly shows that in the present case also, he wanted to declare only a portion of the goods by removing the baggage tags from four baggage out of the five as noted by the adjudicating authority in his finding portion. Therefore, we are of the considered opinion that the charge against the appellant has been brought home by the evidence on record and no fault can be found with the order of the lower authority so far as confiscation of the goods is concerned and we uphold the order of confiscation of the goods. In terms of Section 125 of the Act, redemption of the watches is also allowable since the said goods were seized from the possession of the appellant herein and he has made a declaration that the watches were brought by him. The order of absolute confiscation of the watches is modified.
7. Now coming to the question of granting permission for re-export of the goods and levy of fine and imposition of penalty, the Hon'ble Apex Court in the case of CC, Mumbai v. Elephanta Oil and Industries Ltd. (supra) has held that permission to re-export goods would not mean that penalty under Section 112 cannot be levied and that power to levy penalty under Section 112 of the Act is different from power of confiscation of goods under Section 125 of the Act. The learned Counsel for the appellant also cited the judgment of the Larger Bench of the Tribunal in the case of Hemant Bhai R Patel v. CC, Ahmedabad reported in 2003 (153) E.L.T. 226. In para 8 of the said judgment it is held that it is open to the adjudicating authority to impose redemption fine as well as penalty even when permission is granted for re-exporting goods. In the present case, prayer has been seriously made by the appellant for permission to re-export the goods. We note that the total value of the goods including watches brought by the appellant is Rs. 24,21,700/-. We also take note of the fact that the appellant was languishing in jail as a COFEPOSA detenu for some time. Considering all these factors, we are inclined to think that redemption fine of Rs. 15,00,000/- on the goods valued at Rs. 24,21,700/- is excessive and interests of justice will be served if the redemption fine on the goods is reduced from Rs. 15,00,000/- to Rs. 2,40,000/-(Rupees Two lakhs Forty thousand) and we order accordingly. In the facts and circumstances of the case, we are inclined to grant permission to re-export all the goods including the watches which have been absolutely confiscated, on payment of redemption fine and penalty as fixed in this order. The appellant is also at liberty to clear all the goods on payment of appropriate duty of customs in addition to the redemption fine and penalty if he desires to clear the goods for home consumption.
8. So far as imposition of penalty is concerned, in the facts and circumstances of the case, we are inclined to reduce the quantum of penalty from Rs. 2,50,000/- to Rs. 25,000/- (Rupees Twenty five thousand). The impugned order stands modified to the extent indicated above. The appeal is thus disposed of in the above terms.