Customs, Excise and Gold Tribunal - Calcutta
Shri Vittal Bijoy Bhosle And Ors. vs Commissioner Of Customs (Preventive) on 3 August, 2007
Equivalent citations: 2007(123)ECC319, 2007(149)ECR319(TRI.-KOLKATA)
ORDER Chittaranjan Satapathy, Member (T)
1. Heard both sides.
2. The case involves seizure and absolute confiscation of gold biscuits weighing 2917.240 gms. valued at about Rs. 14.00 lakhs (Rupees fourteen lakhs). The first two appellants have been penalised Rs. 2.00 lakhs (Rupees two lakhs) each, whereas the other three appellants have been penalised to the extent of Rs. 5.00 lakhs (Rupees five lakhs) each.
3. Dr. Samir Chakraborty, learned Senior Advocate appearing for the appellants states that keeping in view the facts and circumstances of the case, he is not contesting the confiscation of the impugned gold. His arguments are directed against absolute confiscation of the gold and he pleads for release of the gold on payment of redemption fine and duty. He also argues for reduction in penalty in respect of the appeals. Dr. Chakraborty states that the provisions of Section 125 of the Customs Act, 1962 reads as under:
SECTION 125. Option to pay fine in lieu of confiscation. - (1) Whenever confiscation of any goods is authorized by this Act, the officer adjudging it may, in the case of any goods, the importation or exportation whereof is prohibited under this Act or under any other law for the time being in force, and shall, in the case of any other goods, give to the owner of the goods or, where such owner is not known, the person from whose possession or custody such goods have been seized, an option to pay in lieu of confiscation such fine as the said officer thinks fit:
Provided that, without prejudice to the provisions of the proviso to Sub-section (2) of Section 115, such fine shall not exceed the market price of the goods confiscated, less in the case of imported goods the duty chargeable thereon.
(2) Where any fine in lieu of confiscation of goods is imposed under Sub-section (1), the owner of such goods or the person referred to in Sub-section (1), shall, in addition, be liable to any duty and charges payable in respect of such goods.
4. He argues that only in respect of prohibited goods, the goods can be absolutely confiscated and even in such cases, the adjudicating officer may allow the owner of the goods an option to pay redemption fine in lieu of absolute confiscation. According to him, importing of gold is no longer prohibited. He states that under the EXIM Policy, import of gold is allowed free subject to RBI Regulations. He also states that under Notification No. 62/2004-CUS. dated 12.5.04, import of gold has been allowed under concessional rates of duty.
5. The learned Senior Advocate further states that the Hon'ble Andhra Pradesh High Court in the case of Shaik Jamal Basha v. Government of India , has held that option to pay fine in lieu of confiscation has to be given to importer of gold, as the same is otherwise entitled to be imported on payment of duty. He also states that in the case of Mohamed Ahmaed Manu v. Commr. of Cus., Chennai 2006 (205) ELT 383 (Tri.-Chennai), the Chennai Bench of the Tribunal has allowed redemption of the confiscated gold on payment of redemption fine.
6. Heard the learned S.D.R., Shri J.K. Jha who supports the impugned Order and states that the import of gold is permitted only subject to conditions and when the conditions are not fulfilled, import of gold has to be treated as prohibited. On that ground, he supports absolute confiscation of the gold.
7. After hearing arguments from both sides and perusal of case records including the cited case-laws, we find that in the case of Sheikh Mohd. Omer v. Collector of Customs, Calcutta and Ors. , the Hon'ble Supreme Court had held that 'any prohibition' in Section 111(d) of the Customs Act, 1962 means every and all types of prohibition. We also find that the Hon'ble Jurisdictional High Court of Calcutta in the case of Commissioner of Customs (Preventive) v. Uma Shankar Verma has referred to the said decision of the Hon'ble Supreme Court in the case of Sheikh Mohd. Omer (cited supra) and has held that even though gold could be imported against special import licence or by agencies authorised by the Government of India, gold would come within the purview of prohibited items. The said Hon'ble High Court also held that if the goods are prohibited, the option to confiscate them without giving any option to pay redemption fine is with the Customs Authorities. The case was not fit for the court to exercise its discretionary jurisdiction in interfering with the Order, when the discretion exercised by the lower court cannot in the opinion of the Hon'ble High Court be said to be contrary to law.
8. Applying the ratio of the decision of the Hon'ble Supreme Court in the case of Sheikh Mohd. Omer (supra) and the jurisdictional High Court in the case of Uma Shankar Verma (supra) to the present appeals, we find that the import of gold has been allowed subject to conditions such as following the RBI Regulations, and in absence of compliance with those conditions in importing gold would render the impugned gold liable for absolute confiscation as prohibited goods. As such, the impugned Order passed by the lower authority, ordering confiscation of the impugned gold and not allowing redemption of the same on payment of fine in exercise of his discretionary jurisdiction, cannot be said to be contrary to law. Hence, we are not inclined to interfere with the Order of the lower authority absolutely confiscating the impugned gold and not allowing redemption of the same.
9. As regards the imposition of penalty on the appellants, we find force in the contention of the learned Senior Advocate that the penalty is harsh and there is scope for reducing the same. We also find that while hearing the Stay Petitions, the Bench had prima facie considered that a predeposit of Rs. 50,000 each in the case of the first two appellants and predeposit of Rs. 1.00 lakh (Rupees one lakh) each in the case of the rest three appellants, adequate. Confirming our prima facie view taken at the time of passing Stay Order, we order reduction in penalty in respect of the first two appellants from Rs. 2.00 lakhs (Rupees two lakhs) each to Rs. 50,000.00 (Rupees fifty thousand) each and reduction in penalty in respect of the other three appellants from Rs. 5.00 lakhs (Rupees five lakhs) each to Rs. 1.00 lakh (Rupees one lakh) each. The five appeals are partly allowed by reduction in the penalties as indicated above.
Pronounced in the court on. 03.08.2007.