The Mumbai Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has quashed the absolute confiscation to permit gold jewelry to be redeemed on payment of fine and penalty.
The bench of C J Mathew (Technical Member) and Ajay Sharma (Judicial Member) has observed that gold and articles made of gold are goods and not vested in the government. Illicit import of articles of gold must be deterred but not by alienation of possession from its owner. The cause for restricting import of ‘semi wrought’ gold is monetarily measurable and that would have sufficed as consequence of wrongful import. There was, thus, no justification for absolute confiscation of the goods – either from being restricted or despite being restricted.
The appellant, Shri Vicky Ramchand Asrani was aggrieved at being deprived of the jewellery on his person by customs officials at Chhatrapati Shivaji Maharaj International Airport (CSMIA), Mumbai upon his return from Abu Dhabi, United Arab Emirates on 25th May 2023 after a short visit and, to further rub salt, the order1 of Commissioner of Customs (Appeals), Mumbai-III, under challenge now, merely endorsed the permanent deprivation by the adjudicating authority.
The empowerment to confiscate under section 111(d), 111(l) and 111(m) of Customs Act, 1962 was brought to bear on ‘24 karat crude gold chain’, valued at Rs. 5,41,450, that appellant, admittedly, procured at Abu Dhabi with hopes of making a profit on its sale at some time or the other.
The department contended that the appellant has deprived the Government of India, in revision jurisdiction under section 129DD of Customs Act, 1962, of considering the challenge to ‘absolute confiscation’ of ‘prohibited goods’ that the two lower authorities held to be in accord with legislated intent of section 125 of Customs Act, 1962.
The appellant submitted that they were only concerned with fair disposal of appeal and pleaded only that the relief sought by them should not be allowed to fall between two stools merely from both authorities declining to take the trouble of deciding on their respective, and mutually exclusive, jurisdictions.
The department contended that ‘Baggage’ lacks elaborate definition in section 2 of Customs Act, 1962 and that lack can hardly be made up by reference to the common use of the expression – as that accompanying ‘journeying person’ – owing to the special provisioning made for ‘baggage’ in chapter XI of Customs Act, 1962.
The letter of the law has its own place in legislative schema but when contextual distinguishment of jurisdiction is sought to be based on law that does not define, the spirit of the law governing a transposed mechanism cannot be ignored. Learned Authorized Representative presupposes that rules pertaining to baggage were breached but has omitted to take into consideration that, in reacting to the breach, the consequences traversed beyond the framework of rules pertaining to baggage.
The dispute is no longer about Rules because ‘prohibition’ has been invoked to keep the valuable article away from its owner and recourse to suggested remedy would rescind appellate remedy before the Supreme Court.
In re Ahmed Gatchi Natchair, the High Court of Madras was concerned with a matter in which plea for re-export of gold was allowed by the Tribunal on the finding that the proceedings were bereft of evidence of goods being prohibited for import by person intending to return to country of residence.
The tribunal held that the proposition of department does not impress as the contextual reference to ‘passenger baggage’ is not intended to circumscribe ‘baggage’ that may be carried by a passenger but to adjure that the generality of ‘baggage’ cannot, at any stretch, subsume such goods within it to escape being subjected to policy restrictions in the course of clearance and that, while the privilege of customs exemption or concession may not be denied, the licencing requirements must be adhered to.
“The tariff does not determine licencing restrictions but deployment of the same code system enables easy cross referencing; here, if the goods, indeed, are ‘semi-manufactured’, the goods may be restricted for import. There is, however, no evidence to suggest that this suspicion was, at any time, subjected to scrutiny by expert ascertainment; indeed, no effort was on display to establish conformity of goods with the description corresponding to tariff item 7108 1300 of First Schedule to Customs Tariff Act, 1975. The proposition for confiscation on the ground of being prohibited does not sustain,” the tribunal said.
The tribunal while disposing of the appeal set aside the absolute confiscation to permit the gold jewelry to be redeemed on payment of fine of Rs. 50,000 and for penalty to be reduced to Rs. 50,000.
Case Details
Case Title: Vicky Ramchand Asrani Versus Commissioner of Customs
Case No.: Customs Appeal No: 87030 Of 2024
Date: 19/12/2024
Counsel For Appellant: Prakash Shah and Aishwarya Kantawala
Counsel For Respondent: Deepak Sharma
