Customs, Excise and Gold Tribunal - Mumbai
Kapoor Jewellers Pvt. Ltd. And Shri ... vs Commissioner Of Customs (Preventive) on 24 March, 2006
Equivalent citations: 2006(106)ECC554, 2006(108)ECC554, 2006ECR554(TRI.-MUMBAI), 2007[7]S.T.R.124
ORDER T. Anjaneyulu, Member (J)
1. Heard both sides.
2. The appellants assailed an order dated 24.06.1997 passed by the Commissioner of Customs (Appeals) which confirms the order dated 21.06.1997 passed by the Addl. Commissioner of Customs (P), wherein personal penalty of Rs. 5,00,000/- (Rupees Five Lakhs only) and Rs. 2,00,000/-(Rupees Two Lakhs only) were imposed on the appellants i.e. M/s. Kapoor Jewellers Pvt. Ltd. and its director Shri. Ramesh K. Jain, under Section 112(b)(i) of the Customs Act, 1962 and 10 Foreign Mark Gold bars seized from the premises of the appellants were ordered to be confiscated absolutely.
3. The facts of the case in nutshell are that:
On 26.07.1993, on the basis of an information, the officers of enforcement searched the premises of M/s. Kapoor Jewellers Pvt. Ltd. and seized 10 foreign marked gold biscuits under the provisions of FERA 1973. Subsequently on 10.11.1993 in the presence of Shri. Ramesh K. Jain, Director of M/s. Kapoor Jewellers Pvt. Ltd. the officers of M & P wing of Customs seized the said 10 foreign gold biscuits valued at Rs. 5,12,093/- (Rupees Five Lakhs Twelve Thousand Ninety Three only) under the provisions of Section 110 of Customs Act, 1962. In his statement Shri. Ramesh K. Jain has revealed that he had purchased the gold from NRI person namely Shri Aravath Ali and also procured original Customs duty paid receipt which showed import of 42 Gold biscuits along with the copy of passport from the said NRI person.
4. During the course of investigation, it was found that the name and address appearing in the duty receipt was fictitious and passport itself was not genuine. The Addl. Commissioner of Customs (P), M & P wing, Mumbai, in his impugned order observed that only passengers holding the valid passport issued under passport Act, 1967 can import gold subject to such conditions under Import Control Order No. 8/90-93 as well as Customs duty exemption Notification No. 117/92 Cus dated 01.03.1992. In the instant case verification proved that name and address given on the passport was fictitious, as such the import of gold is illegal and liable for confiscation and the appellants were liable to penal action for having purchased the said gold. Accordingly, they were penalized under Customs Act, 1962 and the Gold Control Act, 1968, apart from the confiscation of the gold absolutely. The Dy. Commissioner of Customs (P), M & P Wing, Mumbai has confirmed the said order.
5. The Commissioner of Customs (A), Mumbai has observed the following in his impugned order.
Regarding the legitimacy of the duty receipt and impugned gold, I hold that the appellants have no case in appeal. The lower authority has discussed the case in detail and I fully agree with his findings. Since the gold can not be imported freely, any import without fulfilling the conditions of import is illegal and liable for confiscation. As per notification issued by the Govt. only passengers holding valid Indian Passport subject to some conditions are eligible to import gold. In the instant case, as the passport of the passenger was fake, the gold though duty paid at concessional rate, has been imported contrary to the prohibition and hence liable for confiscation under Section 111(d) of Customs Act, 1962. Any prudent man purchasing gold of such high value would have verified the authenticity of the passport and antecendent of the passenger before the deal.
6. The contentions of the appellants are that the Customs Authorities have not investigated properly in respect of the passport and the address given therein. They did not make any enquiry in the passport office at Dubai in respect of the passport issued from the said office. The enquiries made in Cochin passport office in respect of old passport is of no consequence.
6(a). The adjudicating authorities have misled themselves on the basis of wrong investigation carried out in respect of Xerox copies of passports produced by the appellants which were handed over to them by one Shri Aravat Ali at the time of purchase of gold. The Id. counsel for the appellants while pointing out the correct passport Number, contending that the investigating agency mentioned wrong passport number in seeking the information about the validity of the same from the passport office.
6(b). According to the counsel for the appellants, the impugned gold bars were validly imported under valid passport after payment of the duty. Though the authorities below did not dispute about the genuineness of duty paid baggage received, the seizure of the Gold was effected only on the ground of passenger did not carry valid passport, but in fact the same is not correct. Therefore, they point out the seizure of the gold and its absolute confiscation after penalizing the appellants is illegal and contrary to the law.
7. After hearing both sides and going through the record, I am of the view that the investigation carried out in the case was not on correct lines and consequently it misled the authorities below in passing the impugned orders. The documentary evidence on record clearly establish the duty paid character of the seized goods as well as its legal importation through proper channels of customs. The inquiry conducted with the passport authorities was inappropriate and erroneous. The Show-Cause-Notice admits issuance of the passport Number P-447102 from Dubai passport office on which the passenger Shri Aravath Ali traveled. But surprisingly an inquiry was made with regard to said passport with the passport office at Cochin instead the consulate office at Dubai. Naturally the passport office at Cochin can not admit issuance of such passport in the name of that person, as it was issued from the passport office at Dubai. As far as an inquiry in respect of old passport number H-919795 is concerned, it is to be said that instead of referring the passport number H-919796 (as shown in the photo copies of the passport), the passport office at Cochin gave information that the passports H-9197955 and P-447102 were not issued by them. This is but natural. This goes to show that there was an apparent mistake on record in marking out investigation. This shows non-application of mind by the investigating agency. This led to the adjudicating authority that the Gold was imported without valid permit and violation of the provisions Customs Act, 1962 or FERA.
8. As far as Baggage Receipt No. 007607 dated 26.07.1993 is concerned, it pertains to duty payment for 42 Gold biscuits bearing markings 'JOHNSON MATTHEY LONDON 10 TOLAS' and the same was observed by the Additional Commissioner of Customs. The Impugned 10 gold biscuits seized from the appellants also having the same marking. Though the Commissioner of Customs (Appeals) held that the gold seized was duty paid, but of the view that was imported under the fake passport. Both of them erred in not appreciating the fact that the passport number P-441702 was issued in Dubai and the Department has investigated upon the said passport in Cochin along with the old passport by mentioning the wrong number as stated supra. The baggage receipt validly show legal import of gold. The Department did not produce contra evidence or otherwise establish that the baggage receipt is not genuine. In such circumstance, confiscation of the gold is not warranted.
9. Under the liberalized Scheme vide Import Trade Control Order No. 8/90-93 dated 29.02.1992, gold in any form including ornaments but excluding ornaments studded with stones and pearls is allowed to be imported as part of baggage of passengers of Indian origin or a passenger holding a valid passport issued under the Passport Act, subject to certain conditions. It is therefore clearly evident that at the time of import of Gold a passenger should be of Indian origin holding a valid passport. In the instant case the validity of the passport of the passenger was not questioned by Customs Authorities at the time of release of gold. Subsequently, the allegation such as name and address given in the passport was fictious can not be levelled. The appellants are expected to make an inquiry of the person who came to them to sell the gold was having a valid duty paid receipt. The Customs authorities are investigating the matter about the genuineness of the passport so as far as the passenger Shri Aravath Ali is concerned but not with the appellants point of view who purchased the gold under genuine duty paid receipt. In this regard the appellants have also relied upon the decision Abdul Kalingal Andu v. Union of India, wherein it is held "that the ownership of gold and silver is not a criteria for its eligibility to be imported by a passenger, provided he satisfies the conditions of stay at abroad and those relating to payment of duty in foreign exchange".
The above judgment do not refer to the passport of the passenger, therefore the confiscation of the gold and imposition of heavy penalty on the appellants is not in accordance with the law and it makes the impugned order liable to be set aside.
10. It is seen from the record that the appellants have taken sufficient precautions in obtaining the photo copies of duty paying documents and as well as passport of the concerned NRI. Even at the time of the clearance, NRI was allowed to declare the gold which was duly seized and cleared. Further, the appellants have also obtained affidavit of the importer at the time of purchase of gold from him. Earlier adjudication order in the case of very same appellants under similar circumstances was dropped by the Commissioner of Customs (Preventive), Mumbai.
11. Thus I am of the view that the Department have failed to substantiate the allegation that the passport held by NRI was invalid and that the gold was imported under invalid passport. Further it has failed to discharge the inicial burden that the gold in question is smuggled one.
12. Therefore, the impugned order of the lower authorities confiscating 10 gold bars seized vide Panchnama dated 10.11.1993 and imposing the penalty on the appellants company as well as its director, are hereby set aside and the seized goods are ordered to be released forthwith to the appellant company.
13. In case the seized gold bars have been sold by the Department, the appellant company is entitled for the value of the same that has been noted in the Panchnama along with interest at the rate of 9% per annum from the date of seizure till the date of payment and in such event, I hereby direct the respondent to make the payment to the appellants in the aforesaid manner.
14. In the result both the appeals are allowed.
(Pronounced in Court on 24.3.2006)