Custom, Excise & Service Tax Tribunal
Sopariwala Exports Pvt Ltd vs Vadodara-I on 30 June, 2020
Customs, Excise & Service Tax Appellate Tribunal
West Zonal Bench At Ahmedabad
REGIONAL BENCH- COURT NO.3
Customs Appeal No.13152 of 2018-SM
(Arising out of OIA-AHD-CUSTM-000-APP-116-18-19 08/10/2018 passed by Commissioner
(Appeals) Commissioner of Central Excise, Customs and Service Tax-AHMEDABAD-i(Appeal)
Shri Batra Jay ........Appellant
M/164, Khatiwala Tank Shalimar Apartment, Flat No. 1
Indore ,Madhya Pradesh
VERSUS
C.C.-Ahmedabad .......Respondent
Custom House, Near All India Radio Navrangpura, Ahmedabad, Gujarat APPEARANCE:
Shri Hardik Modh, Advocate for the Appellant Shri.R.B. Bhashkar, Superintendent (AR)for the Respondent CORAM: HON'BLE MEMBER (JUDICIAL), MR. RAMESH NAIR Final Order No. A/ 11112 /2020 DATE OF HEARING: 14.02.2020 DATE OF DECISION:10.06.2020 RAMESH NAIR The brief facts of the case are that the appellant Shri. Batra Jay is an Indian Citizen is holding Passport No. 9766015 and had arrived from Dubai at Sardar Vallabhbhai Patel International AirPort (SVPI airport) at Ahmedabad on 19.03.2015 by Spice Jet Flight No. SG-16. The appellant was carrying two gold bars which were purchased by him from M/s. Lakhoo Jewellery Trading Company L.L.C by paying the amount of DHS, 32,330. The appellant strapped the gold bars under the socks with tape. He was also carrying purchase invoice of the said Gold Bars. The appellant on arrival crossed the green channel, thereafter, the Customs Officer apprehended some suspicion and checked the appellant. Thus, the gold bars concealed by strapping at his left leg were found, thereafter, the Customs Officers recorded his statement on 20.03.2015 and further the panchanama was drawn on 20.03.2015. The Gold Bars weighing 233.028 grams valued at Rs. 5,49,374/- (Tariff Value) and Rs. 6,13,526/-(Local markets price) was subsequently seized by the Custom Officers. A show cause notice dated 29.07.2015 was issued by the Additional Commissioner of Customs, Ahmedabad whereby the appellant was called upon to show cause as to why
2|Page C/13152/2018-SM the two gold bars weighing 233.280 grams having purity of 999% which were alleged to be duly concealed by the appellant in his sock should not be confiscated under Sections 111 (d), 111 (l) 111(m) of the Customs Act, 1962 and as to why penalties should not be imposed on the appellant under Section 112 (a) and (b) and Section 114AA of the Act. The Said show cause notice was adjudicated vide Order-In-Original No. 19/ADC-
AK/SVPIA/O&A/2016 dated 27.04.2016 by the Additional Commissioner of Customs wherein it was held that two gold bars has acquired nature of "prohibited goods" because of the manner in which it was attempted to be cleared by the appellant.
2. Accordingly, it was ordered for absolute confiscation of two gold bars under Section 111(b), 111(l), 111(m), of the act and imposed penalty of Rs. 1,00,000/- under Section 112 and Rs. 50,000/- under Section 114AA of the Act on the appellant. Being aggrieved with the Order-In-Original dated 27.04,2016 appellant preferred an appeal before the Learned Commissioner (Appeals) of Customs, Ahmedabad. The Learned Commissioner (Appeals) vide Order-In-Appeals No. AHM-CUSTM-000-APP-109-16/17 dated 22.03.2017 rejected the appeal on the ground of time bar. The appellant preferred an appeal before this Tribunal, the Tribunal remanded the matter to Commissioner (Appeal) by order dated 13.10.2017 for deciding the matter on merit up to following the principles of Natural Justice. Thereafter, the Learned Commissioner (Appeals) passed the impugned order whereby the appeal was rejected and Order-In-Original as a whole was upheld. Therefore, the present appeal.
3. Shri. Hardik Modh, Learned Counsel appearing on behalf of the appellant submits that the Learned Commissioner (Appeals) fail to appreciate that the gold bars were confiscated on the premise that the gold bars are "prohibited goods" not on the account of definition of "prohibited goods" provided under Customs Act but due to the manner in which it was attempted to be cleared by the appellant with the intention to evade payment of Customs duty. He submits that as per definition of "prohibited goods" under Section 2 (33) of the Customs Act that the nature by which of goods attains the status of "prohibited goods" is not due to the manner of clearing of the goods but by the inclusion of goods under the list of "prohibited items" under Custom law or any other law in force. In the present case, the gold bars is bearing manufactures or refiners engraved
3|Page C/13152/2018-SM Serial No and weight given in metric unit imposes of Custom duty on 10% the Customs duty @ 10% as per Serial No 323 of Notification No. 12/2012- Cus dated 17.02.2012. Hence, gold bars is not a "prohibited" goods as per the definition provided under Customs law. He further submits that the Order-In-Original dated 27.04.2016 has been passed beyond the scope of show cause notice. The show cause notice alleged that two gold bars were prohibited on account of violation of provisions of Section 7 of the Foreign Trade (Development and Regulation) Act, 1992. Whereas, Learned Additional Commissioner of Customs in the Order-In-Original dated 27.04.2016 held that the gold bars of the prohibited goods on account of the manner in which it was imported.
4. Thus, the Commissioner (Appeals) have not considered the fact that the show cause notice referred to Section 7 of the Foreign Trade (Development and Regulation) Act, 1992. and has not given any finding in regard to the allegation under Section 7, therefore, the impugned order is required to be quashed. He submits that Section 7 of Foreign Trade (Development and Regulation) Act, 1992 is not attracted as the appellant brought gold bars for his own personal use. He submits that as per para 2.07 of Hand Book procedure prescribe exemption categories for which import or export can be made without IEC. One of the exemption categories under para 2.07 is for a person who imports or exports goods for his personal use. In the present case, the appellant brought two gold bars for his personal use for making jewellery for himself and his family members and therefore, the action of the Revenue to hold goods in dispute as "Prohibited goods" is contrary to policy of Foreign Trade Policy. He submits that the appellant imported 233 grams of gold bars for his own use. The same cannot be decided that such a small quantity has been procured for commercial purpose. He also submits that the statement of the appellant was recorded under coercion and duress to look of the case smuggling. The appellant retracted his statement subsequently. Therefore, the basis of retracted statement the appellant cannot be punished without corroborative independent evidence. The said retracted statement cannot be considered to be a substantial piece of evidence when it has been pointed out that the statement was taken under coercion and duress. He further submits that the appellant had no intention to evade the customs duty. In fact the appellant crossed the green channel, since, there was no one present at the customs desk at the SVIP Airport at the Ahmedabad. One of the persons standing
4|Page C/13152/2018-SM near the desk told the appellant that the appellant can make any inquiry in relation to the declaration from or taxability of the gold bars from the Customs Officers who were standing at the other side of green channel gate, therefore, the appellant crossed the green channels to make adequate inquiry and filing the proper declaration but without listening to the reasoning of the appellant the Customs Officers seized the gold and alleged that he was smuggling the gold into India. More over the appellant had shown the invoice of the purchase of the gold bars to the Customs Officer thereby showing the valuation of the gold. Therefore, from the course of event it can be seen that there was no intention for misdeclaration of valuation of the gold bars and the gold bars are not liable to for confiscation. The intention of the appellant was to inquire about the process how to declare the gold in the disembarkment slip and not to conceal the same but such opportunity for explanation was not provided to the appellant, therefore, there was no actual misdeclaration of a dutiable goods which was not prohibited and further there was no intention of the appellant for such evasion of Customs duty. He submits that the Learned Commissioner (Appeals) failed to appreciate the appellant produced the purchase receipts of the gold bars. In this support, he place reliance on the judgment in the case of Nand Kishore Somani Vs. CST reported in 2016 (33) ELT 448.
5. He further submits that the appellant imported gold bars which are not prohibited goods. As the gold bars can be imported into Indian on payment of Customs duty which the appellant intended to pay duty before he was wrongly accused of smuggling by the Customs Officer. He further submits that since the goods i.e. gold bars correspond in respect of value or in any other particular with the entry made under the Customs Act or in the case of baggage with the declaration made under Section 77 of the Customs Act the goods cannot be confiscated. Without prejudice he submits that the request of the appellant to release the confiscated gold bars on payment of redemption fine as per the provision of Section 125 of Customs Act,1962 ought to have been allowed on the ground that restrictions have been imposed under section 10 (4) and 11 (1) of Foreign Exchange Management Act (FEMA), 1999 and instructions/circulars issued by the Reserved Bank of India from time to time but import of gold is not prohibited. He submits that the Learned Commissioner has erred in invoking provisions of section 10 (4), section 11 (1) FEMA Act, the instruction provided in such that is appealable. In relation to gold imported for commercial purpose but in the present case
5|Page C/13152/2018-SM it has already been shown that gold imported of small quantity and for personal use i.e. in making jewellery for the appellant and his mother, therefore, application of RBI circular of FEMA is not applicable. He place reliance on following judgments:-
Karnil Singh Vs. CCE, Amritsar 2016-TIOL-1200-CESTAT-CHD Rajaram Bohra Versus Union of India 2015 (322) E.L.T. 337 (Cal)
6. He further submits that the penalty is not liable to impose under section 112 of the Customs Act as the show cause notice does not mention the details as to why the penalty is imposable under clause (a) (b) of section 112 Customs Act, 1962. He relied upon the judgment of P.P. Dutta Wing CDR (RETD) v. CCE, 2013 (293) ELT 127 (Tri.-Del.). He further submits that the penalty under Section 112 (a) of the Customs Act, 1962 cannot be imposed. In the present case it has been shown that the appellant followed all the rules and gold is not liable for confiscation, therefore, above provision is not applicable and no penalty ought to have been imposed. The penalty under section 112 of Customs Act also cannot be imposed. The appellant did not mis-declare the facts in the disembarkment slip and had crossed the green channel with the intention to enquire from the Customs Officer in regards to the gold bars which were purchased by the appellant from Dubai for personal use. Since there was no misdeclaration of fact and the goods were not liable for confiscation, therefore, the provision to section 112 (b) is not applicable. As regard the penalty imposed under section 114 (AA), he submits that since the appellant has not signed or used any false documents, therefore, the penalty under section 114 (AA) cannot be imposed.
7. Without prejudice he further submits that when the goods are not liable to be confiscated, no penalty can be imposed under section 114AA of the Customs Act. He placed reliance on the judgment in the case of Deekay Shipping Services Vs. Commissioner of Customs, Mumbai-2011 (264) ELT
269. Without prejudice he further submits that there is no mala fide on the part of the appellant. He submitted that mens rea is an essential requirement for imposing penalty under section 114AA of Customs Act. He placed reliance on the following judgment:-
Suryakiran International Limited Vs C.C, Hyderabad-2010 (259) ELT 745 (Tri-Bag)
6|Page C/13152/2018-SM In support of this above submissions, he placed reliance on the following judgments:-
D.Jewel Vs. Commr. Of Ex. & Service Tax, Surat-I- 2019 (369) ELT 1244 (Tri.-Ahmd) D. Jewel Vs. Commissioner Of Customs, Surat-2019 (366) ELT 106 (Guj.) Commissioner of Central Excise Customs and Service tax, Surat-II V/s. Dharmesh Pansuriya-2018 (363) ELT 555 (Tri.-Ahmd), Commissioner of Customs (AP), Mumbai Vs. Alfred Menezes-2009 (244) ELT 334 (Bom).
8. On the other hand, the R B Bhasker Learned Superintendent (AR) appearing on behalf of the Revenue reiterates the finding of the impugned order. He placed reliance on the following judgments:-
2003 (155) ELT 423 (S.C). Om Prakash Bhatia Vs. CC, Delhi 2014 (309) ELT 671 (Ker.)-V.s K.P. Abdul Majeed Vs. CC, 1997 (89) ELT 646 (S.C.) -Surjeet Singh Chabra Vs. Union O India 2009 (247) ELT 21 (Mad)-CC (AIR), Chennai-I Vs. Samynathan Murugesan
9. I have carefully considered the submissions made by both the sides and perused the record. There is no dispute about the fact that the appellant concealed gold bars in his sock arriving from the Dubai At Airport. Though the appellant has made the submission that the appellant was about to declare the gold carried by him but as per the facts the appellant without informing to the Custom Officer crossed the Green channel. Only those persons who do not carry any goods which is supposed to be declared before the customs can pass through green channel. The appellant firstly concealed the gold bars in his Socks and also not declared to the Customs. This clearly shows the intention of the appellant to avoid declaration as well as evasion of duty. There is no evidence to show that the appellant had bona-fide belief and intend to declare the gold bars and pay the Customs duty. In this circumstances the gold bars brought by him from Dubai is clearly liable for confiscation.
10. As regard the submission of the appellant that the statement was retracted and the appellant was about to declare the gold bars. I find that even if the statement recorded under 108 is not considered the fact of smuggling of gold by the intercepting by the Customs Officer is not in
7|Page C/13152/2018-SM dispute, therefore, the act of smuggling of gold is not in doubt. As per the Indian Customs Declaration Form enclosed as per Annexure: C in the appeal, the appellant has made wrong declaration that he has not bringing prohibited Articles gold, Gold jewellery (over Free Allowance), Gold Bullion despite concealing the gold bars. The appellant had made wrong declaration, therefore, it is clear that the appellant had a malafide intention to escape with the smuggled gold without payment of duty. Considering the entire circumstances, I am of the view that the adjudicating authority has rightly exercised his discretion to absolute confiscate of gold bars. The judgments relied upon by the rival need not to be gone into details. In the case of misdeclaration of imported goods the fact various from case to case. Therefore, in view of the event and circumstances of illegal import of gold bars, I am of the view that absolute confiscation of gold bars ordered by the adjudicating authority is proper and legal. For the same reason, the penalty imposed by the adjudicating authority needs no interference.
11. Accordingly, I uphold the Order-In-Original and dismiss the appeal.
(Pronounced in the open court on 10.06.2020) (RAMESH NAIR) MEMBER (JUDICIAL) Prachi