Custom, Excise & Service Tax Tribunal
Shri Zainuddin vs Commissioner Of Central Excise, ... on 16 July, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH
BANGALORE
Appeal(s) Involved:
C/21873/2014-DB, C/21874/2014-DB, C/21875/2014-DB, C/22869/2014-DB, C/22868/2014-DB, C/22870/2014-DB
[Arising out of Orders-in-Original Nos. HYD-EXCUS-002-COM-008-14-15 dated 30/04/2014; HYD-EXCUS-002-COM-009-14-15 dated 30.4.2014 & HYD-EXCUS-002-COM-007-14-15 dated 30/4/2014, passed by Commissioner of CUSTOMS , HYDERABAD-II]
For approval and signature:
HON'BLE Mrs. ARCHANA WADHWA, JUDICIAL MEMBER
HON'BLE Mr. B.S.V.MURTHY, TECHNICAL MEMBER
1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No
2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
Yes
3 Whether Their Lordships wish to see the fair copy of the Order? Seen
4 Whether Order is to be circulated to the Departmental authorities? Yes
Shri Zainuddin
Apt Blk 2, Kitchener Road,
# 07-65, Singapore
C/o. A. Ganesh Advocate F Block 179, Annanagar,
CHENNAI 600102 Appellant(s)
Shri Chokkalingam Muruganandam
Blk 12, # 04-64, York Hill, Singapore
C/o, A Ganesh Advocate, F Block 179, Annanagar, CHENNAI02 Appellant(s)
Shri Haji Mahamed
Blk 105, Tower Road,
# 04-404, Singapore
C/o A Ganesh Advocate, F Block 179, Annanagar
CHENNAI 600102 Appellant(s)
Commissioner of Customs, Hyderabad-II
L.B STADIUM ROAD,
BASHEERBAGH,
HYDERABAD - 500004. Appellant(s)
Versus
Commissioner of Central Excise, Customs and Service Tax Hyderabad-ii
L.B STADIUM ROAD,
BASHEERBAGH,
HYDERABAD - 500004. Respondent(s)
Sri Chokkalingam Muruganandam Blk 12, 04-64, York Hill SINGAPORE 161002. Respondent(s) Shri Haji Mohamed Blk 105, Towner Road, # 03-404, SINGAPORE 321105. Respondent(s) Shri Zainuddin Apt Blk 2, Kitchener Road, #07-65, SINGAPORE 200002.
Respondent(s) Appearance:
Mr. A. Ganesh, Advocate NARAYANAN &CO F BLOCK 179, ANNANAGAR, CHENNAI 600102. For the Appellant Mr. N. Jagdish, A.R. For the Respondent Date of Hearing: 30/04/2015 Date of Decision: CORAM :
HON'BLE Mrs. ARCHANA WADHWA, JUDICIAL MEMBER HON'BLE Mr. B.S.V.MURTHY, TECHNICAL MEMBER Final Order Nos. 21348 - 21353 / 2015 PER B.S.V. MURTHY The facts of the case in brief as in the Order-in-Original impugned before us as under :
On 20/12/2013, three passengers, appellants herein, namely Shri Zainuddin, Shri Chokkalingam Muruganandam and Shri Haji Mohamed were intercepted at Rajiv Gandhi International Airport, Hyderabad at the exit gate when they arrived from Singapore and had passed through the green channel. The disembarkation slips of the passengers were verified and it was found that column No. 6, in which the passengers are required to declare total value of the goods they carry, was blank. Thereafter search of the passengers was conducted and from each of the appellant, six gold bars weighing 01 Kg. each were recovered. According to the Order-in-Original, the gold bars were found concealed in shoes and pant pockets to avoid detection by the authorities. Some foreign currency and Indian currency were also found. On the ground that the gold bars and other items were not declared and were liable to confiscation, the same were seized and proceedings were initiated culminating in absolute confiscation of the gold bars, foreign currency and Indian currency. Further penalties under Sections 112(a) and 114AA of Customs Act, 1962 were also imposed on the appellants.
2. Heard both sides and perused the records.
3. Detailed written submissions were filed by the appellants. The submissions in brief are as under :
The three appellants are friends and are doing business independently and men of means contrary to the statements recorded at the time of seizure. All of them filed Income Tax Returns and copy of the returns were also filed. Shri Haji Mohamed, the third appellant wanted to start a hotel project in Kumbakonam, Tamilnadu and for the purpose of investment for the hotel, they purchased gold bars to sell in India. The appellants were guided by website which was verified by the third appellant. According to the website, a passenger of Indian origin who was staying for more than six months abroad can bring 10 Kg of gold by paying concessional rate of duty in convertible foreign currency. Accordingly, the three appellants brought 06 Kg. of gold each.
There was no mis-declaration or concealment. 01 Kg. gold bar can not be concealed in shoe or pant pocket; neither shoes or pants were seized from the appellants; further they were intercepted even before they had an opportunity to declare the gold; they had sufficient money to pay all the duty; the seizure was effected in the Customs hall and therefore, import was not complete at all; since they had not crossed the Customs barrier, there was no offence committed; it is preemptive seizure and the appellants relied upon case law holding that seizure cannot be effected before the goods cross the Customs barrier. It was submitted that the appellants parents were citizens of India and therefore, all the appellants were persons of Indian origin according to the Notification No. 12/2012-Customs dated 17.3.2012 to bring the gold; they were mislead by website and therefore, had brought 06 Kgs. of gold; further according to the notification, person of Indian origin is defined as a person or his parents or grand parents or great grand parents was born in India or permanent resident in India; the interpretation of person of Indian origin of the Commissioner was wrong; it was also submitted that the observations of the Commissioner in the order that the appellants had visited India and therefore they are not eligible for the benefit is wrong since their visit was less than 30 days in the case of two passengers; it was also observed by the Commissioner that the appellants did not show any evidence to show that they did not avail exemption earlier; according to the instructions issued, it was for the department to verify whether the appellant had availed the benefit or not; gold is not prohibited and therefore, they may be allowed to be re-exported on payment of redemption fine; non-seizure of the baggage such as pants, shoes, etc. shows that the stand taken by the Revenue that gold was concealed in pants pocket and shoe is wrong; it was also submitted that at earliest opportunity, the appellants had retracted the statements.
4. Learned A.R., on the other hand, supports the observations in the Order-in-Original. He submits that Mahazar has not been challenged and witness has not been cross examined. Therefore, Mahazar has to be accepted as depicting true picture of what happened. According to the Mahazar, the passengers were intercepted after they crossed the green channel. Therefore, the claim of the appellants that they have not crossed the Customs barriers is not at all correct. He also submits that even if it was accepted that the passengers are of Indian origin, yet, total quantity brought by them is much more than the admissible quantity and therefore confiscation is in order. When there is specific bar for importation of gold of not more than 01 Kg, the gold becomes prohibited items and therefore is liable to absolute confiscation. Accordingly, the claim of the appellants that the gold has to be allowed to be re-exported on payment of fine is contrary to the legal position. In view of the above, the impugned order has to be sustained.
5. We have considered the submissions made by both the sides. In the absence of any challenge to the Mahazar and cross examination of the Mahazar with witness, it is not possible to accept the claim of the appellants that they were intercepted in the Customs hall and had not crossed the Customs barriers and importation was not complete. In any case, it has been clearly brought on record that in the disembarkation slip/card filed by the appellants, they had mentioned value of the imported goods as nil. True declaration could have been made in the disembarkation card in which case, no case could have been made against the appellants at all. There would have been documentary evidence of bonafide belief on the part of the appellants to show that they were clear in their mind that gold being brought by them was brought legitimately and could be cleared on payment of duty. In view of the fact that Mahazar has not been challenged and witness has not been cross examined and non-retraction of the statements before the Magistrate when the appellants were produced after arrest would go against the appellants and therefore, the facts as brought out by the Revenue have to be accepted and it is not possible to take a contrary view.
6. Once it is held to be not importable, e gold becomes a prohibited item and therefore, the Commissioner has the power to confiscate the same absolutely. He has a choice to give an option to redeem on payment of fine but the claim of the appellants that he must release the gold on payment of fine is not correct legal position. The decision of the Commissioner of Customs (AIR) Chennai-I Vs. Samynathan Murugesan [2009 (247) E.L.T. 21] is appropriate. In this decision, the Honble High Court held as follows :-
Confiscation - Absolute confiscation of goods - 7.075 kgs Gold ornaments recovered from T.V. Set - Goods were prohibited as petitioner did not belong to category of persons who could bring gold at concessional rate of duty - Previous periods where petitioner stayed for longer duration, not relevant for the purpose of Notification No. 31/2003-Cus. - Liberalisation policy and repeal of Gold Control order weighed with the Tribunal - Tribunal ought to have considered whether he could have carried the gold as part of his baggage as an eligible passenger - Goods imported in violation of Import (Control) Order, 1955 read with Section 3(i) of Import and Export Control Act, 1947 - Concealment weighted with the Commissioner to order absolute confiscation - Commissioners order upheld - Section 111 of Customs Act, 1962. This judgement was upheld by the Honble Supreme Court, as reported in 2010 (254) ELT A15. In the circumstances and in view of the decision relied upon by the Commissioner, absolute confiscation ordered by him cannot be considered as legally wrong.
7. The appellants have disputed the conclusion reached by the Commissioner that the appellants cannot be considered of Indian original. Learned counsel submitted that it is sufficient proof that the person or his parents or grad parents or great grand parents was born in India or permanent resident in India. However no evidence to show that the appellants or their parents or grand parents or grand grand parents are Indian residents have been produced before us. All of the three appellants are holders of Singapore passport and therefore unless evidence is produced to show that their parents or grand parents are Indian origin, it is not possible to accept the statement that they have to be treated as person of Indian origin. In any case, we have already observed that even if a person is of Indian origin, if the gold was not declared and was admittedly taken out of Customs area without declaration, it has to be considered as prohibited good and is liable to confiscation. Once it is considered as prohibited goods, absolute confiscation would be in order. In the case of Sheikh Mohammed Omar Vs. Collector [1983 (13) E.L.T. 439 (S.C.)], the Honble Supreme Court held Any prohibition in Section 111(d) of the Customs Act, 1962 means every an all types of prohibition, whether complete or partial, it includes restriction which is one type of prohibition. This judgement was reaffirmed in the case of Om Prakash Bhatia Vs. Commissioner [2003 (155) E.L.T. 423 (S.C.)]. In the case of Garg Wollen Mills (P) Ltd. Vs. Addl. Collector of Customs New Delhi [1998 (104) E.L.T. 306], the Honble Supreme Court held that absolute confiscation of goods is justified when it is not a fit case to exercise discretion to give option to pay fine in lieu of confiscation.
8. In view of the above discussion, the decision of the Commissioner to confiscation the gold bars absolutely and impose penalties cannot be found fault with.
9. The appellants had submitted that a calculation sheet which shows that the profit taking the present market value as on 15.12.2013 was only Rs. 16 lakhs. The margin has gone up now since the exchange rate between dollar and rupee is favourable. Nevertheless, in view of the fact that we have upheld the absolute confiscation itself and having found no reason to allow the redemption on payment of fine under the facts and circumstances of this case, we consider that penalties imposed under Sections 112(a) and 114AA is harsh. Section 112 provides for penalty when a person renders goods liable to confiscation under Section 111 of the Customs Act, 1962. Section 114AA provides for penalty when there is a short levy having taken place. Because of the seizure of the gold and confiscation thereafter it cannot be said short levy has taken place. Having regard to the fact of absolute confiscation and in case of absolute confiscation, there cannot be short levy, we consider the penalty under Section 114AA need not be confirmed. As regards the penalty under Section 112(a) of the Customs Act, 1962, we consider that since gold has been absolutely confiscated, it would be appropriate to reduce the penalty to a nominal amount. Accordingly, the penalty imposed on the appellants is reduced to Rs. 1,00,000/- (Rupees One lakh only) each. The confiscation of Indian currency and foreign currency is also upheld.
10. The Revenue has filed the appeals to enhance the penalty imposed on the appellants under Section 114AA of the Customs Act, 1962. Since we have already set aside the penalty imposed under Section 114AA on the appellants, the appeals filed by the Revenue have to be rejected and we do so.
11. All the six appeals filed by the appellants and the Revenue are disposed of in the above manner.
(Pronounced in open court on .) (B.S.V.MURTHY) TECHNICAL MEMBER (ARCHANA WADHWA) JUDICIAL MEMBER /vc/