Customs, Excise and Gold Tribunal - Tamil Nadu
Shri Shaik Shahabuddin vs Commissioner Of Customs, Chennai on 16 July, 2001
Equivalent citations: 2001(137)ELT127(TRI-CHENNAI)
ORDER
Shri S.L. Peran
1. This appeal arises from Order-in-Original No. 4/97 dated 28.1.97 and despatched on 4.2.97 passed by the Commissioner of Customs, Chennai by which he has ordered for confiscation of 3331 gms. of goes seized from the baggage valued at Rs. 15,26,130/- under Section 111 (d) (1) and (m) of the Customs Act, 1962 read with Section 3(3) of the Foreign Trade (Development & Regulation) Act, 1992. He also ordered for confiscation of one broken Emergency Light, One Foot Air pump, Carbon paper and 2 nos. of 'Shater' Shaving Cream tube which was also found to have been concealed alongwith the gold. There is a penalty of Rs. 1.5. lakhs under Section 112(a) of the Customs Act, 1962.
2. The case of the appellant was that he was working in Saudi Arabia as Turner for a long time. He returned to India alongwith his baggage and was proceeding towards green channel. The departmental officials of Air Intelligence unit suspected the appellant's carring with him illicit of goods in his baggage and therefore before he crossed the green channel, he was taken into custody and complete search was done of his baggage. It was found that he was carrying 'Eminent' suit case, brown colour plastic bag which did not result in the recovery of any gold or any other contraband. However, during the course of examination of greenish black colour zip bag, among used personal clothing on FIFU emergency light, one foot air pump and two 'sather' shaving cream tube, they were found to unusually heavy. Therefore, the same was checked in the presence of two independent witnesses and the passenger and the 'FIFU' emergency light was first opened which resulted in the recovery of 11 nos. of ten tolas gold bars with foreign markings and 4 nos. of yellow metal rods which were found wrapped with black colour adhesive. Likewise, the foot air pump was also examined closely which resulted in the recovery of 10 nos. of ten tolas gold bars with foreign markings which were found wrapped with black colour adhesive tapes and kept concealed inside the metal cylinder of air pump. Thereafter, the shaving cream tubes also was cut opened in the presence of two independent witnesses and in the presence of said passenger which resulted in the recovery of 3 nos. of gold bars with foreign markings and 5 nos. of yellow metal bits which were also found wrapped with black adhesive tapes. In all, 24 numbers of gold bars with foreign markings and 4 nos. of yellow metal gold and 5 nos. of yellow metal bits which were found concealed in the emergency light, foot air pump and shaving cream tubes. Therefore, a certified gold smith was summoned for examining these items in the presence of independent witnesses and the passenger, who certified the weight and its purity and of its foreign origin and having foreign markings. A Mahazar was drawn and the passenger was questioned in the presence of independent witness to find out whether he possessed any valid permit issued by RBI or any other competent authority for which the passenger replied in the negative. Therefore, he was taken into custody for attempted smuggling of these items in contravention of law and hence his voluntarily statement also was recorded on 3/4/96 by which he confessed about his offence.
3. Proceedings were initiated by issue of show cause notice and thereafter, the Commissioner has upheld the allegation that appellant was attempting to smuggle in the manner in which it has been recorded above the illicit gold biscuits and gold bits without any valid licence and hence they were liable for absolute by the Commissioner in para-18 to 27 is reproduced below:-
18. In this case, Shri. Shaik Shahabuddin, holder of Indian passport No. B 591374 dt. 26.11.87 issued at Hyderabad, arrived as a passenger from RIYADH by flight SV 768 on 3.4.96, was intercepted by the Customs Officers of Air Intelligence Unit, working at the Anna International Air Port, Madras while he was proceeding Lowards Green channel with his one grey colour 'Eminent' hand suitcase, bearing Saudi Airlines baggage tag No. SV 665979 one 'Visa' greenish black colour zip bag and one 'Crystal' brown colour plastic bag on suspicion that he might have kept concealed gold either in his baggage or on his person. When questioned in the presence of the witnesses, whether he had oncealed any gold on his person or in his baggage, Shir Shaik Shahbuddin replied int he negative. Thereafter on detailed examination of his baggage, 11 Nos. of ten tola gold bars with foreign markings and 4 nos. of gold rods which were kept concealed in 'FIFU' Emergency lamp, 10 Nos. of ten tolas gold bars with foreign markings kept concealed in the Foot Air pump and 3 Nos. of gold bars with foreign markings and 5 nos. of gold bits kept concealed in the shaving cream tubes, by wrapping the gold with black adhesive tapes in the above said item (viz.Emergency Lamp, Foot air pump and Shaving cream tubes) were recovered. Since the passenger did not declare the gold to the Customs at any stage and the same were kept concealed in the Emergency lamp, Foot air pump and in the shaving cream tube the same were seized under a Mahazer for taking necessary action under Customs law readwith Section 3(3) of Foreign Trade (Development & Regulation) Act, 1992.
19. I find that in his voluntary statement dt. 3.4.96, Shri Shaik Shahabuddin admitted that he kept concealed the said gold, wrapping with the black adhesive tapes, in the Emergency lamp, Foot Air pump and in the shaving cream tubes to evade from customs duty and he knew that it was an offence; that he purchased the said gold with his own money and money borrowed from his friends. In reply to the SCN Shri Shaik Shahbuddin's allegation mentioned in para 10(8) supra works out to only one gram in the total quantity of 3331 gms is negligible. In reply to Show Cause Notice the Counsel reiterated the statement given by Shri Shaik Shahabuddin. However during the personal hearing as well as in his reply to the Show Cause Notice the Counsel has referred the following case laws:
a) Kamlesh Kumar Vs Collector 1993 (67) ELT 1000(GOT)
b) V.P. Hameed Vs Collector-1994 (73) ELT 425
c) Jaspal Singh Banty Vs Collector - 1994 (73) ELT (240 GOI.
Further the learned Advocate has cited a judgement passed by the Hon'ble High Court of Andhra Pradesh.
20. On perusal of the above case laws I find that in the above cases the parties concerned have not declared the gold whereas in the present case the party concealed the gold inside the baggage goods such as Emergency light, Foot Air pump & Shaving cream tube and without declaring walked through the Green Channel 50 that he can escape detection of the case. In respect of the judgement of A P High Court in W.P 12405/1996 in the case of Shaik Jamal Basha Vs Union of India and others, I find that no arguments have been advanced by either side in respect of the declaration to be made under Sec. 77 of the Customs Act, 1962, which is a mandatory requirement. In view of the above taking into account the fact that declaration has not been made under sec. 77 of the Customs Act, 1962, the department has gone in appeal to the Division Bench of the Hon'ble High Court of Andhra Pradesh against this judgement.
21. Further it appears that the judgment of the Supreme Court in the case of Shaik Mohamed Omer Vs Collector of Customs, Calcutta (AIR 1971 S.C. 793) was not brought to the notice of the Honourable High Court by either side.
22. Under Section 3(3) of the Foreign Trade (Development & Regulation) Act 1992, readwith section 11(2) of the Customs Act, 1962, import of any consumer goods without a valid licence issued by the competent authorities is prohibited. However, the said prohibition does not apply to passenger's bonafide baggage to the extent admissible under the Baggage rules for the passenger's subject to the conditions that a proper declaration is to be made to the customs as required under Section 77 of the Customs Act, 1962. It is evident that Shri Shaik Shahabuddin had attempted to smuggle in the contraband gold totally weighing 3331 gms. totally valued at Rs. 17, 10, 176/- M.V. (Rupees Seventeen Lakhs Ten Thousand One Hundred and Seventy Six Only) (Rs. 15, 26, 130/- I.V.) by not declaring the same to the customs by concealment in his baggage. The goods are thus liable for confiscation.
23. The Hon'ble Supreme Court in the case of Shaik Mohamed Omar Vs.Collector of Customs, Calcutta - AIR 1971 Supreme Court 293 while dealing with the word 'prohibition' under sec. 111(d) read with sec.3 of the Imports & Exports (Control) Act, 1947 has held that any prohibition referred to in the section comprised every type of prohibition. That prohibition may be complete or partial. Any restriction on import or export is to an extent a prohibition. The expression any "prohibition in sec.111(d) of the Customs Act include restrictions..... any prohibition means every prohibition.." Finally the Hon'ble Supreme Court has concluded that certain exceptions are provided for in the case referred to above but nonetheless the prohibition continues.
24. In the light of the above judgement of the Hon'ble Supreme Court it is clear that prohibition includes restrictions. Even if there are certain exceptions as in this case it continues to be prohibited goods.
25. Therefore gold continues to be prohibited item. In view of sec. 125, the discretion rests with the adjudicating authority for either allowing the goods to be released on redemption fine or confiscate absolutely.
26. I am of the considered opinion that this judgement is squarely applicable in the present case and I have not come across any other judgement of the Hon'ble Supreme Court contrary to this. Accordingly, the said goods are liable to confiscation, under Section 111(d) (1) and (m) of the Customs Act, 1962 read with Section 3(3) of the Foreign Trade (Development & Regulations) Act, 1992.
27. By the above said act of smuggling of the above said goods into India, the passenger has rendered himself liable to penal action, hence, I hold him liable to Penalty under Section 112(a) of the Customs Act, 1962.
4. Arguing for the appellant. Ld.Counsel Shri B.V.Kumar points out that the first mistake committed by the Commissioner was that he did not apply the ratio of the judgements which were cited before him, the finding on which have been noted in para-19 which is extracted above. It is his contention that important had not been completed. The importation is deemed to be completed only after the importer crosses the customs barrier as has been held in the case of RANWOLPH CHARLES LUKA Vs UOI - 1996 (83) ELT 274 (Bom.); UOI & OTHERS Vs KHALIL KECHERIM OF TEHERAN - 1983 ELT 941 (Del.) and K.R.AHMED SHAH Vs ADDL.COMMR.OF CUSTOMS, reported in 1981 ELT 153 (Mad.). He submits that even in the case of RANWOLPH CHARLES LUKE (supra), the Bombay High Court had noted that party importer had crossed the green channel and only thereafter, he is deemed to have committed the offence of misdeclaration. It is his contention that appellant had intention to declare, although, he had for security purpose hidden all the materials in the items examined by the investigating wing. Merely because he had not stated to the officials that he was going to declare the goods that by itself cannot be presumed that appellant was not going to declare the goods. He resiled from his statement on 10.4.96. He submits that statement is given under duress and force which is not binding.
5. The alternate argument taken by the Counsel is that gold is now removed from the negative list and can be imported in terms of notification No.171/94-Cus dated 30.9.94. He submits that the Tribunal has been consistently taking the view that even in extreme circumstances of attempting to smuggle foreign branded gold biscuits the authorities are required to release the gold biscuit on payment of redemption fine as held in V.P.HAMEED Vs CC, BOMBAY reported in 1994 (73) ELT 425(T). He also refers to the judgement of KAMLESH KUMAR Vs CC reported in 1993 (67) ELT 1000 (G.O.I.) and that of S.S.KHOSLA, JT.SECRETARY In re: JASPAL SINGH BANTY reported in 1994 (73) ELT 240 (GOI). He also refers to the Apex Court judgement rendered in the case of HARGOVID DAS K.JOSHI & OTHERS Vs CC 7 OTHERS reported in AIR 1987 SC 1982 which has held that it was just, fair and proper that the authority addressed himself to the question of giving option which had been submitted before them and as the Apex Court found that the order of confiscation was not in terms of law and therefore remanded the case for de novo consideration. He also files a copy of the order passed by the Andhra Pradesh High Court in Writ Petition 12405 of 1996 in the case of SHAIK JAMAL BASHA Vs GOI & OTHERS by which in a similar circumstances, the matter was remanded to the original authority to redecide the case in terms of observations made by the High Court. He also referred to judgement of this Bench rendered in the case of SHANKAR KUMAR KARIKAR Vs CC Madras by final order No. 785/95 dated 19.12.95 by which the Bench modified the order of absolute confiscation and granted redemption on payment of fine of 50% of the value of gold. He also relies on the Calcutta High Court judgment rendered in UMA SHANKAR 1999 (112) ELT 20 (Cal.) herein the Calcutta High Court had directed for release of gold under Sec. 125 of the Customs Act on furnishing the bank guarantee and bond in view of liberalisation in the policy. He also relies on the judgement of MOHIT THAKOR Vs COLLECTOR, report in 1994 (72) ELT 865 wherein in a similar circumstances, the Bench ordered for grant of redemption of seized 2 Kgs. of gold. It was also held that absolute confiscation was not justified in view of FER/Customs notifications and ITC order prevailing during the relevant period. He submits that in the cited case, the confiscated goods were directed to be redeemed on payment of fine of 25,000/- and penalty was reduced to Rs. 5000/-. He submits that the case arising from the case arising from the same confiscation f another two passengers was referred to the Larger Bench of another Bench in the case of DINKAR KHINDRIA Vs CC New Delhi on the ground that MOHIT THAKOR's case was not a correct order and required to be recalled. However, the Larger Bench in the case of DINKAR KHINDRIA reported in 2000 (188) ELT 77 (T-LB) upheld the judgement of MOHIT THAKOR case and held that there was no mistake in the order for recall and further held that subsequent cases were ought to have been taken note of that judgement and followed the same in terms of judicial discipline.
6. Ld.Counsel submits that now the law is clear that even in a circumstances like the present one, the passenger had not crossed the green channel calling for the authorities to arrest and seize the goods. He submits that appellant had not been given an opportunity to declare the goods. He further submits that even if offence had been committed the authorities were liable to grant redemption on payment of fine and nominal penalty. Therefore, he submits that impugned order is not correct and legal in law and requires to be set aside.
7. On the other hand Ld.DR Shri Jayachandran defends the order and submits that there is no infirmity in the impugned order. He points out to the manner in which the appellant had hidden the gold in various items clearly indicated his intention to smuggle the gold bars without declaration. In his voluntarily statement, he confessed that he did not declare the items and was crossing the green channel without declaration. Therefore, this circumstance and admission cannot be set aside and subsequent resilement of his statement is nothing but an after-thought. The fact that he has admitted that he was not declaring the item is required to be taken as correct. Therefore, the seizure of gold biscuits carried foreign markings and appellant clearly admitted that he did not have any permission or licence from RBI and hence the Commissioner rightly had confiscated. Therefore, even in terms of the judgment cited by the Counsel gold was confiscable but only the power was given to the authorities to consider the RBI notification and grant redemption. But in the present case, the gold cannot be ordered to be redeemed as this falls within the ambit of "smuggling" and smuggled items are absolutely confiscable and option cannot be exercised and officers have got discretionary power whether to exercise the powers or not. It cannot be said that option is required to be granted in each and every case, even if the offence is serious. Therefore, he submits that all judgements cited are distinguishable. He further points out that this Bench in the case of SHANKAR KUMAR KARIKAR Vs CC Madras directed for release of 50% gold which is not in terms with Section 125 of the Customs Act, which clearly lays down that profit of margin of the item is required to be taken. He submits that arbitrary fixation at 50% is not in terms of law laid down under Section 125 of the Act. He submits that Commissioner has rightly ordered for absolute confiscation and the penalty imposed if very nominal and hence seeks for confirmation of demands.
8. On a careful consideration of the submissions, we notice from that judgements cited the goods are liable for confiscation when the passenger has crossed the customs barrier as held by the following judgements:-
(1) RANWOLPH CHARLES LUKA Vs UOI - 1996 (83) ELT 274 (Bom.) (2) UOI & OTHERS Vs KHALIL KECHERIM OF TEHERAN - 1983 ELT 941 (Del.) (3) - K.R.AHMED SHAH Vs ADDL.COMMISSIONER
-1981 ELT 153 (Mad.) However, the Ld.DR has brought out a very subtle distinction in as must that the goods in the present case had been camouflaged and kept in shaving cream tubes and other items. The party had also clearly confessed that he was to cross the green channel without declaration. The green channel was meant for passengers who were not declaring any goods and were having any goods which required any licence. Therefore, the point at which the passenger was intercepted was when he was about to cross the green channel. The fact that he was prepared to declare or was to declare later also is required to be re-appreciated in the light of judgements cited. But, however, the plea raised by DR has got force in as much as that voluntarily statement given by the passenger cannot be said to be taken with coercion or force, although the passenger has taken four days to resile from the same. The Commissioner has not given his finding as to whether such resilement was an after-thought or not. We notice that Tribunal has already taken a view in the case of MOHIT THAKORE's case (supra) that in view of relaxation made in the RBI's circular and other circulars of FERA, absolute confiscation is not valid and the option of redemption is required to be given. Such a view has also been expressed by the West Regional Bench rendered in the case of V.P.HAMEED Vs COLLR. (supra) and in view of the judgment rendered by Sh.S.S.KHOSLA JT.SECRETARY, GOI in KAMLESH KUMAR Vs CC-1993 (67) ELT 1000 (G.O.I) and in respect of JASPAL SINGH BATTY, 1994 (73) ELT 240 (GOI). We also note that in the case of SHANKAR KUMAR KARIKAR Vs CC Madras (supra) the option to redeem was also accepted and such direction was given.
9. However, we are not agreeable to the arguments of Ld.Counsel that Tribunal should take up the plea of fixing of redemption fine. It is for the original authority to reconsider all the pleas and also to see as to whether the present case falls within the ambit of grant of release by fixing the redemption fine in the light of judgements cited. The authorities also have to clearly give a clear cut decision as to whether violation of law has taken place before crossing the green channel. The contention of the appellant was that he had clear mind to declare and the authorities ought to have waited till he crossed the channel as held by the judgements of the High Courts already cited is required to be considered by the original authority. We are of the considered opinion that the Commissioner ought to have examined and addressed himself to all the questions which have been raised before him and as the orders does not deal with the all aspects of the matter, we are of the considered opinion that the matter has to go back to the Commissioner of Customs, Chennai for readjudication of the matter. The Commissioners shall hear the appellant and record a clear cut finding on all aspects of the matter and reconsider the prayer for grant of redemption of fixing redemption fine as has been held in large number of cases including the judgement of Calcutta High Court in UMA SHANKAR (supra). Therefore, the impugned order is set aside and matter remanded to the Commissioner of Customs, Chennai for de novo consideration in the light of observations made in this order.
10. At this stage, Ld.Counsel seeks for a direction to the Commissioner to adjudicate the matter within a time frame of three months as the gold was seized in the year 1996 and five years have lapsed in the matter.
11. Ld.DR opposes the prayer.
12. We have considered this submission and we direct the Commissioner to readjudicate the matter de novo within a period of five months from the date of receipt of this order. Ordered accordingly.
(Pronounced & dictated in open court)