CESTAT | If the ownership of gold is proved to the customs, can it still be penalized? Tribunal upholds confiscation of gold concealed inside the inner garment

Customs, Excise and Services Tax Appellate Tribunal (CESTAT): S.S. Garg (Judicial Member) partly allowed an appeal which was filed aggrieved by the order passed by the Commissioner(Appeals) whereby the Commissioner(Appeals) had rejected the appeal upholding the Order-in-Original.

The officers of Air Intelligence Unit, Cochin International Airport, Nedumbassery seized two gold biscuits total weighing 120 grams valued at Rs.3,55,680/- (international value) from the appellant on his arrival from Sharjah to Cochin on 20/09/2018. The gold biscuits were concealed inside the inner garment worn by the appellant. Since the seized gold biscuits were undeclared, the original authority confiscated the same absolutely under Section 111(d), (i), (l) and (m) of the Customs Act, 1962 and also imposed penalty of Rs.10,000/- under Section 112(a) and (b) of the Customs Act, 1962.

Counsel for the appellant submitted that the impugned order is not sustainable in law as the same has been passed without properly appreciating the facts and the law. He further submitted that the appellant was ignorant of the law that gold ornaments brought from abroad must be reported to the Customs authorities and he was also ignorant that he is required to pass through the red channel and without knowing these facts, the appellant passed through green channel. He further submitted that the quantity of gold brought was only 120 grams which was purchased by him from Malabar Gold and Diamonds, Bahrain with proper bill and the said purchase was purely for making ornaments for his family.

AR defended the impugned order and submitted that the appellant was not entitled to bring gold from outside India as the duration of his stay in abroad was only 35 days; therefore he was not eligible for import of gold. She further submitted that the appellant has been frequently travelling abroad in connection with his work and he is presumed to know the Customs rules and procedures. She further submitted that gold recovered was not declared to the Customs which amounts to violation of Section 77 of the Customs Act, 1962 read with Baggage Rules, 1998 and relevant policy provisions which renders the gold liable for confiscation.

The Tribunal finally found that the appellant was carrying two gold biscuits weighing 120 grams valued at Rs 3,55,680/- which was concealed inside the inner garments by the appellant and the same was not declared and the appellant passed through green channel so as to avoid payment of customs duty. The Tribunal perused the original copy of the invoice issued by Malabar Gold and Diamonds and the said bill showed that the appellant was the owner of the gold which was purchased by him only 2-3 days before the start of the journey from Bahrain but since he was not eligible to bring gold in terms of Notification No.12 of 2012 and the same was not declared, the impugned goods had rightly been confiscated.

The Tribunal while upholding the confiscation found that the penalty of Rs 10,000/- imposed on the appellant under Section 112(a) and (b) of the Customs Act, considering the facts and circumstances of the case specifically when the appellant has proved his ownership was not justified. Appeal was thud partly allowed by the Tribunal.[Muhammed Rafi Kuruthilakath Lafarkantavida v. C.C, 2021 SCC OnLine CESTAT 1058, decided on 06-08-2021]


Suchita Shukla, Editorial Assistant has reported this brief.

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