Kerala High Court
The Assistant Commissioner Of Air ... vs Soman Kochuraman on 24 May, 2019
Author: A.K.Jayasankaran Nambiar
Bench: Hrishikesh Roy, A.K.Jayasankaran Nambiar
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE THE CHIEF JUSTICE MR.HRISHIKESH ROY
&
THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR
FRIDAY, THE 24TH DAY OF MAY 2019 / 3RD JYAISHTA, 1941
WA.No. 1827 of 2016
AGAINST THE JUDGMENT IN WPC 29511/2005 of HIGH COURT OF KERALA
DATED 10-06-2016
APPELLANTS/RESPONDENTS IN WPC:
1 THE ASSISTANT COMMISSIONER OF AIR CUSTOMS,
COCHIN INTERNATIONAL AIRPORT, NEDUMBASSERY,
COCHIN - 683 111.
2 THE ADDITIONAL SECRETARY (REVISION)
APPLICATION, MINISTRY OF FINANCE,
DEPARTMENT OF REVENUE, PARLIAMENT STREET,
NEW DELHI - 110 001.
BY ADV.SMT.PREETHA S.NAIR, SC, CENTRAL BOARD OF EXCISE
RESPONDENT/PETITIONER IN WPC:
SOMAN KOCHURAMAN,
KOIKKAL HOUSE, P.C.KAVALA PO, PAYIPPAD,
CHANGANASSERY, KOTTAYAM - 686 537.
BY ADV.SRI.P.A.AUGUSTIAN
THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 24.05.2019, THE
COURT ON THE SAME DAY PASSED THE FOLLOWING:
W.A.No.1827 of 2016
2
JUDGMENT
A.K.Jayasankaran Nambiar, J.
This Writ Appeal has been preferred by the Assistant Commissioner of Air Customs, Cochin and the Additional Secretary in the Ministry of Finance, Department of Revenue, New Delhi, aggrieved by the judgment dated 10.6.2016 of the learned single Judge in the W.P.(C)No.29511 of 2005. The petitioner in the writ petition, along with his wife and two minor children, had travelled from Sharjah, UAE to India on 28.6.2004. The petitioner carried in his registered baggage four articles of spare parts for a car that he had earlier imported to India for his personal use. The spare parts comprised of car rims (Brabus) - 4 nos, tail lamp - 2 nos and head lamp - 3 nos. The aforesaid items were declared as part of the baggage of the writ petitioner, and the baggage from which the said items were recovered was seen registered in the name of the petitioner. Although the petitioner declared the total value of the spare parts as Rs.50,000/-, he claimed the benefit of the total duty free baggage allowance that was individually admissible to each of the family members who accompanied him on his journey from Sharjah to India and contended that since the total value of the spare parts was less than the sum total of the baggage allowance permissible for all the passengers, the items imported were within the permissible limits of bona fide baggage exempted from duty for the purposes of Section 79 of the Customs Act, 1962 read with the Baggage Rules, 1998. The said contention did not find favour with the Deputy Commissioner, Air Customs, who was of the view that the spare parts being items for commercial use could not be seen as bona fide baggage for the use of the passenger or his family, and hence the petitioner could W.A.No.1827 of 2016 3 not claim the benefit of duty free baggage allowance under the Customs Act read with the Baggage Rules. It was found, however, that the goods were valued at Rs.50,000/- and the petitioner could claim a duty free baggage allowance upto Rs.25,000/-. Resultantly, therefore, the petitioner had to pay duty on the remaining value of Rs.25,000/- at the rate of 40% ad valorem and further was subjected to a penalty and fine in terms of the Customs Act. Against the said order of the Deputy Commissioner, the petitioner preferred an appeal before the Commissioner of Customs (Appeals). The said appeal was, however, rejected by the appellate authority by Ext.P6 order. A further revision preferred by the petitioner also did not meet with any degree of success save for a partial reduction of the fine and penalty in Ext.P7 order. In the writ petition the petitioner sought to impugn Exts.P5, P6 and P7 orders of the authorities inter alia on the contention that, inasmuch as the co-passengers accompanying the petitioner were members of his family, and the provisions of Section 79(1)(b) contemplated that to qualify as bona fide baggage exempted from duty the article in question had to be for the use of the passenger or his family, the allowance permissible for his family members under the Baggage Rules could also be pooled in to cover the value of the spare parts imported by the petitioner. The finding of the lower authorities as regards the items imported constituting bona fide baggage was also challenged in the writ petition. The contentions of the learned counsel for the petitioner found favour with the learned single Judge who, after referring to the Baggage Rules, relied on the definition of family under Rule 2(iv) of the Baggage Rules to hold that the inclusive definition of family under the said Rule could not be ignored while applying the limits of permissible baggage allowance to passengers, who constituted the family of the petitioner. In particular it was found that if the explanation to the Baggage Rules, which mandated that the free allowance under the Rules would not be allowed to be pooled with the free allowance of W.A.No.1827 of 2016 4 any other passenger, was strictly interpreted, then the family that was travelling together would have to claim free allowance by separating their baggage. This, according to the learned Judge, was legally untenable since it would amount to separating the family, which was otherwise united, for the purpose of the Baggage Rules. On the issue as to whether the spare parts that were carried constituted a bona fide baggage or not, the learned Judge found that inasmuch as the spare parts did not come within the excluded category of goods under Annexure I of the Baggage Rules, the same had to be treated as bona fide baggage for the purposes of the Rules. The impugned orders of the Customs authorities were therefore quashed and the petitioner held entitled to a refund of the duty, fine and penalty paid by him.
2. In the Appeal before us it is the contention of Smt.Preetha S. Nair, the learned counsel for the appellants that the definition of family under Rule 2(iv) of the Baggage Rules is only for the purpose of indicating the members who can qualify as family for the purposes of the Rules. It is pointed out that under Section 79 of the Customs Act, the duty free allowance in respect of the bona fide baggage will apply only to such article in a baggage in respect of which the officer concerned is satisfied that it is for the use of the passenger or his family. Thus the definition of family in the Baggage Rules is for the purpose of indicating the members of a family for whose use the particular article was brought by a passenger and presented for duty free clearance. It is contended that merely because the accompanying passengers form part of the family of the petitioner, the duty free allowance under the Baggage Rules, and their application qua a particular passenger, cannot be ignored by clubbing the limits of duty free allowance of all the passengers constituting a family. To interpret the statutory provisions otherwise would, it is submitted, make redundant the explanation under the Rules which clearly mandates W.A.No.1827 of 2016 5 that the free allowance under the Rule shall not be allowed to be pooled with the free allowance of any other passenger.
3. We have heard the rival submissions and on a consideration of the same, as also the provisions of Section 79 of the Customs Act, 1962 and the Baggage Rules, 1998, we find force in the contention of the learned counsel for the appellant that the duty free baggage allowance that is permitted under the Rules to a passenger cannot be clubbed with the duty free allowance permitted to another passenger even if he/she falls within the definition of the family of the first passenger. It is relevant to note in the instant case that the baggage in which the spare parts in question were carried, was declared in the name of the petitioner. The baggage in question had therefore to be seen as the baggage of the petitioner as an individual passenger. While it would have been open to the petitioner to claim a duty free clearance in respect of the various articles/spare parts had they been invoiced to, and included in the baggage of, the other passengers who were individual members of his family and in whose names the baggages were registered, perhaps he could have claimed the benefit of duty free allowance as applicable to each of those passengers. In the instant case, however, the items in question were contained in the baggage of the petitioner, and the invoices in respect of the spare parts showed the petitioner as the person to whom the spare parts were sold. We are, therefore, constrained to hold that the petitioner could not have contended for a pooling of the baggage allowance permitted in respect of his wife and children to enhance the limit of duty free baggage allowance that was admissible to him in his capacity as a passenger under the Baggage Rules. We therefore set aside the finding of the learned single Judge on this issue.
W.A.No.1827 of 20166
4. As regards the finding of the learned single Judge that the items of spare parts constituted bona fide baggage, we find that the spare parts in question were intended for use in a vehicle imported by the petitioner earlier and put to personal use of the petitioner. Under the said circumstances, and in view of the fact that the items of spare parts were not excluded for carriage in baggage under Appendix I of the Baggage Rules, the finding of the learned single Judge that the said items of spare parts constituted bona fide baggage is upheld. Thus, we allow the Writ Appeal to the extent of setting aside the finding of the learned single Judge that the limit of baggage allowance limited to the petitioner could be pooled with the limits of duty free baggage allowance permitted to the other passengers of his family for the purpose of computation of duty liability under the Customs Act, 1962. We do not however disturb the finding of the learned single Judge with regard to the bona fide nature of the baggage carried by the petitioner, as also the finding that the petitioner will not be liable to any fine or penalty since the duty liability of the petitioner in the instant case appears to have resulted from an erroneous understanding of the provisions of the Baggage Rules.
The Writ Appeal is disposed of as above.
Sd/-
Hrishikesh Roy, Chief Justice Sd/-
A.K.Jayasankaran Nambiar, Judge vpv /TRUE COPY/ P.A. TO JUDGE