Customs, Excise and Gold Tribunal - Mumbai
V.P. Hameed vs Collector Of Customs on 1 March, 1993
Equivalent citations: 1994(73)ELT425(TRI-MUMBAI)
ORDER R. Jayaraman, Member (T)
1. Both the appeals were heard together, since these involve in appreciation of certain similar facts and also common issues. Appeal No. C/435/92-Bom is against the order-in-original No. SD/INT/AIU/88/92AP 'A'/4323 (S/14-5-86/92) dated 19-4-1992 while Appeal No. C/458/92-Bom. is against the order-in original No. SD/INT/AIU/89/92/AP 'A'/4322 (S/14-5-85/92AA) dated 10-4-1992 both passed by the Additional Collector of Customs, Airport, Bombay.
2. The facts of the cases are that both the appellants came as passengers from Dubai by Cathay Pacific Airlines flight on 30-3-1992, each carrying only one zipper hand bag as his baggage. It is alleged that both the appellants opted to walk through green channel for customs clearance and did not declare any dutiable or prohibited items before the customs officers. However, on screening of the bag, the officers noticed, the presence of metal objects and on detailed examination of the baggage, it was found that Shri V.P. Hameed (Appeal No. C/435/92-Bom) carried 35 gold bars weighing 4060gms. On his personal search they also recovered US $ 6500. On check of the bag carried by the other appellant Shri Abdul Jabbar Mathumal (Appeal No. C/458/92-Bom) the officers recovered 42 gold bars weighing 4872 gms. The search of his person, resulted into the recovery of 7800 US $. Both the appellants sought for adjudicating the case without issue of Show Cause Notice. Hence the cases were adjudicated after extending personal hearing and in the adjudication proceedings, the Additional Collector of Customs ordered absolute confiscation of the gold bars seized and also the foreign currency seized from the appellants, under Section 111(d) of the Customs Act, 1962. They also were imposed with personal penalties of Rs. 1,25,000/- on Shri V.P. Hameed and Rs. 1,50,000/- on Shri Abdul Jabbar Mathumal. The present appeals are against the aforesaid orders passed by the Additional Collector of Customs.
3. Shri A. Sunder Rajan, the Ld. Consultant, on behalf of the appellants, alongwith Ms Anjana Gupta, the Ld. Adv., appeared and pleaded that the gold was declared to the Customs authorities. He referred to the statements given immediately after the seizure and also the subsequent retraction to plead that even in the initial statement, it has been indicated by both the appellants that they had told the lady officer about the possession of foreign currency for payment of duty towards gold. They however admit that they have not seen the warning exhibited in the Customs hall and they have crossed the customs barrier alongwith the gold without seeing the warning. In the statements, they have also admitted that they have brought the gold given by one Mr. Kutty, who also gave the foreign currency for payment of duty and the gold bars after clearance were to be given to a person named by Mr. Kutty, who would be waiting outside the baggage hall. They also admitted that they had brought the gold for monetary consideration of Rs. 8000/- which they would be getting for carrying the gold. However, this statement has been retracted on the following day by the appellants and they have claimed the gold as belonging to them. They also produced the purchases receipts in respect of the said gold. It was pleaded that they are the importers of the gold and even in the context of the definition of the "importer" as given in the Customs Act, since they have brought the gold and claimed to be the importers, they should be construed to be the importer. Since they have declared the gold alongwith the foreign currency before the lady officer and they have not walked out of the customs area, nothing can be held against them. In the case of Shri V.P. Hameed, he has returned to India after 15 years and in the case of Shri Abdul Jabbar Mathumal he has returned to India after 1 1/2 years and these gold bars have been brought by them in the context of the liberalised policy permitting import of gold on payment of duty in foreign currency. The gold has been confiscated absolutely under Section Hl(d) of the Customs Act and not for concealment or misdeclaration. When gold can be brought in by a passenger as baggage and the appellants are prepared to pay duty in foreign currency as per the liberalised policy, absolute confiscation of the gold is not warranted. In any case, the duty involved is about Rs. 2.00 lacs in each case and absolute confiscation is not at all warranted. The appellants should be given option for redeeming the gold, in case the order of cosnfiscation of gold is sustainable. As regards the foreign currency, he pleaded that there is no legal requirement to declare the foreign currency upto 10,000 US $. Hence no offence has been committed under the Customs Act and their confiscation is not warranted. As regards the penalties, he pleaded that Section 112 of the Customs Act only has been cited for imposition of penalties. The specific sub-section namely 112(a) or (b) has not been cited in the order. Hence the penalty is not legally enforceable. In this context, he sought to rely on the decision of the Madras High Court reported in 1983 E.L.T. 322 (Madras), which has also been followed by the Tribunal in the case reported in 1991 (56) E.L.T. 64 (Tribunal). He also pleaded that in any case, the penalties imposed are excessive, even if they are taken as carriers of the gold and hence are not within their financial reach.
4. Shri Ravinder Jain, the ld. JDR, on the other hand, contended that as per Section 79 of the Customs Act, baggage rules are made applicable only in respect of bonafide baggage. The article in the baggage of a passenger should be either for the use of the passenger or his family or is a bonafide gift or souvenir, provided the value of each such article does not exceed the limit prescribed in the rules. Hence as per the initial statements given by both the appellants, they have only acted as carriers for one Mr. Kutty and the gold was not their personal belongings or have been acquired by them out of their earnings abroad and the quantity involved is nearly 5 kgs of gold. Shri Hameed was working as a driver and he clearly admitted that the gold was not purchased by him but was given to him by Mr. Kutty alongwith the foreign currency for payment of duty, and that such gold after clearance has to be handed over to the nominee of Mr. Kutty. Similar statement has also been given by the other appellant. The purchases bills obviously have been taken in the name of the appellants so as to made them appear to be bonafide baggage. Viewed in the context of their initial statements, these purchase bills cannot be relied upon as indicating that the gold is their personal belonging. He also pointed out that no doubt both the appellants having brought the gold are the importers. Here the question is one of looking into the claim of the appellants that the gold is their bonafide baggage; the admitted position is that the gold has been brought for one Mr. Kutty and the gold is not belonging to them. It cannot be therefore construed to be the item of their bonafide baggage. He also stated that even the foreign currency was only recovered on personal search and hence they have been ordered confiscation. Since it is not belonging to them, it cannot be construed to be the bonafide baggage. As regards the penalties, the facts of the case are quite clear. Both the appellants have brought the gold and they have attempted to walk through green channel without declaring the gold and hence even non-mentioning of sub-section of Section 112 cannot be fatal to the order and the appellants have not been put to any prejudice, because of the absence of mentioning of sub-section of Section 112.
5. After hearing both the sides and on a perusal of the relevant statements, as also the panchnama, we find that both the appellants had carried only one zipper hand bag which contained gold bars. They carried foreign currency on their person. The panchnama is clear to the effect that they, on arrival, opted to walk through green channel with the one zipper hand bag each. On screening of the zipper hand bags, the presence of gold was found. Thereafter it was subject to detailed examination and the gold was recovered alongwith some minor items of their personal belongings. From this panchnama, which is not challenged before us, we are led to the invertible conclusion that the appellants had tried to walk through green channel with one zipper hand bag each without declaring the presence of gold in the bags. In these bags, the only worthwhile item carried is the gold and if their intention was to avail of the liberalised scheme they would have straightaway gone to the officer and kept the bag on the table before the officer opened and showed the gold and seek for assessment. They would not have gone anywhere near the green channel. Possibly after detection and recovery, they would have indicated their willingness to pay duty in foreign currency which they were having in their possession. In the initial statement also they admitted that they have crossed the customs barrier without noticing the warning exhibited on the baggage hall. Even the retraction only seeks to emphasise that they have purchased the gold out of their savings and not given by Mr. Kutty. In view of the aforesaid position, non-declaration of the gold before the Customs has to be held as duly established. On this score itself the liability of gold to confiscation is to be upheld. Moreover, it is observed that the gold has been carried for one Mr. Kutty who has purchased the gold and also given the foreign currency for duty payment. Hence this cannot be construed to be a bonafide personal effect of both the appellants, even though they may be importers of the same. Even as per the notification fixing the effective rate of duty on such gold, the gold has to be imported as baggage and not otherwise. Baggage in the context of Section 76 read with the Baggage Rules would mean bona fides baggage restricted to personal effects of the passenger, including gifts and souvenirs. When both the appellants have clearly admitted that they have carried the gold for monetary consideration and the statements have been given by them immediately after seizure, evidential value of these statements cannot be dismissed, because of the subsequent retraction. We therefore uphold the order of confiscation of the gold from both the appellants under Section 111(d) of the Customs Act. However, their alternative plea for allowing redemption on payment of duty requires consideration in the context of the liberalised policy allowing import of gold on payment of duty in foreign currency under the baggage rules. We also note that there is no bar on sale of such gold cleared on payment of duty. Hence we would deem it proper to allow the gold to be redeemed on payment of fine of Rs. 2.00 lacs (Rupees Two lacs only) in each case and also subject to the condition of payment of duty on these gold bars in foreign currency.
6. As regards the foreign currency, we find that there is no dispute that upto 10,000 US $, no declaration is called for. Hence there is no legal requirement for declaring the presence of foreign currency in the hands of the appellants. Even if these foreign currency might have been given by Mr. Kutty, a declaration is called for only in respect of dutiable and prohibited items contained in the baggage. When there is no legal requirements in respect of foreign currency upto 10000 US $, it cannot be held that non-declaration of these foreign currency would render the currency liable to confiscation under Section 111(d) of the Customs Act. In this view of the matter, we order release of the foreign currency seized, to both the appellants.
7. As regards the penalty imposed on both the appellants, we are going by the initial statements given by both the appellants, it appears that they are only the carriers of the gold, who have carried the gold for monetary consideration which has to be cleared on payment of duty, penalties would therefore call for substantial reduction. We therefore reduce the personal penalty to Rs. 5000/- (Rupees Five thousand only) in each case.
8. Both the appeals are disposed of in the above terms.