Aiyakannu vs Joint Commissioner of Customs

R. Sudhakar, J.—This Writ Petition is filed praying to issue a Writ of Certiorarified Mandamus, calling for the records on the file of the third

respondent made in 373/60/B/2001-RA and by Order No. 11 of 2002 dated 28-1-2002, confirming the orders of the first respondent dated 3-1-

2001 and the second respondent dated 3-4-2001, quash the same and direct the respondents to release the 10 Nos. of gold bars weighing 1165

grams valued at Rs. 4,78,081.00 to the petitioner being the subject matter of the Order O.S. No. 254 of 2000-INT dated 3-1-2001 on the file of

the first respondent. On 11-12-2000, the officers of Anna International Airport, Chennai, while maintaining surveillance over the passengers and

their baggages arrived by Indian Airlines flight IC574 from Colombo, intercepted a passenger by name Shri S. Aiyakannu, holder of Srilankan

Passport No. M0444299 dated 7-12-1998 issued at Colombo. While the petitioner/passenger was at the green channel, the officers on suspicion

and on reasonable belief that the passenger was trying to clear dutiable goods without declaration and payment of duty stopped him at the said

place and verified the baggage. The petitioner/passenger stated that he had no dutiable goods to declare. After the said statement, the baggage was

checked and in the baggage it was found concealed 10 gold bars with foreign markings wrapped in carbon paper each weighing 10 tolas. The 10

gold bars totally weighing 1165 grams valued at Rs. 4,78,081/- were seized as per the procedure along with other documents and a statement was

recorded on the same day wherein the petitioner inter alia stated that he brought the gold from Colombo to sell it for profit in India so as to meet

the educational expenses of his children studying in India at Chennai. Petitioner accepted the offence and pleaded for leniency. Petitioner, by letter

dated 2-1-2001 pleaded for waiver of show cause notice and prayed for personal hearing, which was held on 3-1-2001 and the petitioner

appeared in person. The Joint Commissioner of Customs referring to clause 3 of Foreign Trade (Exemption from Application of Rules in Certain

Cases) Order, 1993 issued from Foreign Trade (Development & Regulation) Act, 1992 came to the conclusion that import of gold in any form

including ornaments will be allowed as part of baggage by a passenger of Indian origin or a passenger holding a valid passport issued under the

Passport Act, 1967, subject to certain eligibility conditions. Since the petitioner is a Srilankan Passport Holder, he is not entitled to bring gold into

India. Further, the gold in question was not declared to the Customs on arrival. Therefore, there was an attempt to smuggle the same into India by

way of concealing it inside the zip bag covered with black colour adhesive carbon tapes. The adjudicating authority came to the conclusion that the

gold bars so imported are liable for confiscation u/s 111(d) , (1) and (m) of the Customs Act, 1962. Accordingly, for the aforesaid reasons, he

held that the 10 numbers of gold bars weighing 1165 grams valued at Rs. 4,78,081/-are liable for absolute confiscation and accordingly ordered

absolute confiscation and imposed a penalty of Rs. 24,000/- u/s 112(a) of the Customs Act, 1962. This order was passed in O.S. No. 254 of

2000 INT dated 3-1-2001.

An appeal was filed by the petitioner to the Commissioner of Customs (Appeals) staring that gold was brought for the use of petitioner

daughter''s marriage and redemption should have been given u/s 125 of the Customs Act in terms of the various decisions of the CEGAT,

Government of India and the High Court. The authority failed to grant redemption of gold and imposed penalty erroneously. The Commissioner of

Customs (Appeals) after hearing the counsel for the appellant (writ petitioner) came to the conclusion that it was a case of proved concealment and

attempt to smuggle gold into India. The appellant (writ petitioner) is a Srilankan National and therefore, not an eligible passenger to bring gold into

India and the import is contrary to the Rules and the Act. Therefore, absolute confiscation of the gold bars and imposition of penalty was justified.

This order was passed in C4/207/0/2001-Air C.Cus. No. 272/2001 dated 30-1-2001.

As against the order of the Commissioner of Customs (Appeals), a revision application was filed before the Central Government u/s 129 DD of

the Customs Act, 1962 raising the very same ground as was raised before the Commissioner of Customs (Appeals). The Central Government

after considering the plea and after affording personal hearing came to the conclusion that the petitioner attempted to smuggle the prohibited goods

as defined in Section 2(33) of Customs Act, 1933. The Central Government after considering the plea of the petitioner and the provisions of

Foreign Trade (Exemption from Application of Rules in Certain Cases) Order, 1993, which provides for import of gold only by passengers of

Indian origin subject to following conditions:-

(a) that the passenger importing the gold is coming to India after a period of not less than six months of stay abroad;

(b) that quantity of gold shall not exceed 5 kgs per passenger;

(c) import duty on gold shall be paid in convertible foreign currency; and

(d) there will be no restriction on sale of such imported gold, held that the petitioner is a foreign national and he attempted to smuggle the goods

into India. It held that the goods in question were rightly held to be prohibited goods relying upon the Supreme Court decision in Sheikh Mohd.

Omer Vs. Collector of Customs, Calcutta and Others, ). It came to the conclusion that the goods in question became prohibited goods on account

of the attempt to smuggle through green channel and import by the petitioner contrary to the provisions of the 1993 order. The Government

justified the absolute confiscation and the penalty. The Government confirmed the order of the lower authority. Challenging the same, the writ

petition has been filed.

An interim order has been granted not to dispose of the seized commodity.

Shri Sathish Sundar, learned counsel appearing for the petitioner contended that in terms of Section 125 of the Customs Act, 1962, option to

pay fine in lieu of confiscation should have been allowed.

Similar plea was considered and rejected by the Division Bench of this Court in C.M.A. No. 2040 of 2007 [Commissioner of Customs (Air) v.

Samyna-than Murugesan and Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench reported in 2009 (166) ECR 160

(Madras) = 2009 (247) E.L.T. 21 (Mad.) decided on 27-4-2009 in a case of smuggling of gold by a passenger of Indian Origin who attempted to

clear the goods imported under the provisions of the Foreign Trade (Exemption from Application of Rules in Certain Cases) Order, 1993 by

concealment in a television set. The customs authorities seized the goods and confiscated the goods absolutely and refused to allow redemption.

The Tribunal granted redemption of the goods on payment of fine which was set aside by the High Court on an appeal by the Commissioner, who

justified the absolute confiscation. The Division Bench considering the decision of the Supreme Court in Om Prakash Bhatia Vs. Commissioner of

Customs, Delhi, came to the conclusion that the prohibition in terms of Section 2(33) of the Customs Act, 1962 was attracted in a case of this

nature. Therefore, absolute confiscation was justified. This order of the Division Bench was taken up on appeal to the Supreme Court in Special

Leave to Appeal (Civil) No. 22072 of 2009 [2010 (254) E.L.T. A15 (S.C.) and the Special leave Appeal was dismissed holding as follows:-

Applying the ratio of the judgment in the case of Om Prakash Bhatia v. Commissioner of Customs, Delhi reported in 2003 (6) S.C.C. 161, to the

facts of the case, we find that, in the present case, the assessee did not fulfill the basic eligibility criteria, which makes the imported item a

prohibited goods; hence, we see no reason to interfere with the impugned order. The SLP is, accordingly dismissed.

In the present case, the petitioner being a foreign national is not entitled to import the gold in terms of the 1993 order as it will apply only to the

passenger of Indian origin or a passenger holding a valid passport issued under the Passport Act, 1967. The petitioner does not satisfy the above

condition. Further, the attempt to smuggle the goods by green channel without payment of duty justifies the order of absolute confiscation as has

been held by the Division Bench of this Court and upheld by the Supreme Court referred to above.

Petitioner''s plea for redemption cannot be justified as he attempted to misuse the facility which does not apply to a foreign national. This is

revealed by the petitioner''s statement given to the Customs Officer referred to supra.

A new plea was taken by the petitioner''s counsel today that any passenger holding a valid passport is entitled to import the gold, which plea

apparently is misconceived as the Notification clearly states that the import can be made only by the passengers of Indian origin or a passenger

holding a valid passport issued under Passport Act, 1967 (Act 15 of 1967). Admittedly, petitioner is not a holder of valid passport under the

Passport Act, 1967 and therefore, he is not entitled to claim such a relief. In any event this is a new plea taken in the writ petition for the first time.

Finding no merit, this Writ Petition is dismissed. No costs.