Rajan Ran Vs Commissioner of Customs (CESTAT Chennai)
Facts- On the basis of specific intelligence received by Directorate of Revenue Intelligence (DRI) that one passenger by name Shri Rajan Ran, appellant herein, is arriving at Chennai Airport from Singapore by Indian Airlines and would be carrying huge quantity of gold jewellery and is attempting to clear without declaration and without payment of customs duty, the officers of DRI in the presence of independent witnesses, under a mahazar proceedings, intercepted the passenger at the exit point of the arrival hall of Chennai Anna International Airport when he came out through the green channel.
On conducting search of the passenger and his belongings, it was found that he was carrying a total weight of 9994.38 grams of assorted gold jewellery covered in a polythene cover and pouches. The contents of each pouch were weighed. The gold assayer assayed all jewellery items and he certified that the jewellery is made of 22 carat gold. The appellant had also handed over his Singapore passport, counterfoil of the checked in baggage and boarding pass. He stated that a co-passenger by name Manoj would clear his checked in baggage and that he had filled in the Customs Declaration Form and handed over the same at the Customs gate exit. The said declaration form was collected from the customs officers. In the declaration form the appellant had not declared any dutiable goods. To the query made by the DRI officers, whether he had any dutiable goods or other items, the appellant had replied in negative. On examination of the checked in baggage of the passenger, it was found to be a carton box containing one 40 inches Sony Bravia 40V LCD television. On the personal search of the passenger, he was found to carry a photocopy of three lists showing the total weight and quantity of the gold jewellery carried by him and also currency notes for 5,380 US Dollars and 230 Singapore Dollars. He did not have any bill for purchase of gold jewellery and stated that he was carrying the same for a monetary consideration for Vasu Arumugam @ Manoj. He stated that the said co-passenger of the appellant who is an Indian and knew him as Manoj would clear his checked in baggage and bring it out of the airport. The appellant showed the Indian passport of the said Manoj and handed over the same to the officers. The name in the passport was Shri Vasu Arumugam.
Under mahazar proceedings dated 17/18.2.2009, the gold jewellery totally weighing 9994.38 grams, USD 5,380, Singapore Dollars 230, Sony Bravia LCD TV valued at Rs.1,60,22,391/- were seized. The airline e-ticket of the appellant, counterfoil of the checked in baggage, boarding pass, customs declaration form, the three lists showing the weights and quantities of the gold and the photocopy of the three lists found on the person of the passenger were also seized under the mahazar. The statement of the appellant Shri Rajan Ran was recorded on 18.2.2009 under sec. 108 of the Customs Act, 1962. Shri Vasu Arumugam could not be located and a search was conducted at his residence on 18.2.2009. The appellant was remanded to judicial custody.
Conclusion- The appellant falls into the criteria of an eligible passenger. He is thus allowed to import gold jewellery upto 10 kilograms by paying appropriate customs duty. The currencies seized from him are sufficient to pay the customs duty for the gold carried by him. Further, there is no evidence that the appellant had made any attempt to conceal the gold jewellery. For these reasons, being an eligible passenger, the adjudicating authority ought to have given an option to redeem the gold jewellery and also the foreign currencies in terms of section 125 of Customs Act, 1962. Further, the appellant has also produced documents in the nature of invoices which proves that he has purchased the gold jewellery from Singapore.
As per various decisions being an eligible passenger, the gold jewellery carried by him cannot be considered as prohibited goods rendering them for absolute confiscation.
FULL TEXT OF THE CESTAT CHENNAI ORDER
Brief facts are that on the basis of specific intelligence received by Directorate of Revenue Intelligence (DRI) that one passenger by name Shri Rajan Ran, appellant herein, is arriving at Chennai Airport from Singapore by Indian Airlines and would be carrying huge quantity of gold jewellery and is attempting to clear without declaration and without payment of customs duty, the officers of DRI in the presence of independent witnesses, under a mahazar proceedings, intercepted the passenger at the exit point of the arrival hall of Chennai Anna International Airport when he came out through the green channel.
2. On conducting search of the passenger and his belongings, it was found that he was carrying a total weight of 9994.38 grams of assorted gold jewellery covered in a polythene cover and pouches. The contents of each pouch were weighed. The gold assayer assayed all jewellery items and he certified that the jewellery is made of 22 carat gold. The appellant had also handed over his Singapore passport, counterfoil of the checked in baggage and boarding pass. He stated that a co-passenger by name Manoj would clear his checked in baggage and that he had filled in the Customs Declaration Form and handed over the same at the Customs gate exit. The said declaration form was collected from the customs officers. In the declaration form the appellant had not declared any dutiable goods. To the query made by the DRI officers, whether he had any dutiable goods or other items, the appellant had replied in negative. On examination of the checked in baggage of the passenger, it was found to be a carton box containing one 40 inches Sony Bravia 40V LCD television. On the personal search of the passenger, he was found to carry a photocopy of three lists showing the total weight and quantity of the gold jewellery carried by him and also currency notes for 5,380 US Dollars and 230 Singapore Dollars. He did not have any bill for purchase of gold jewellery and stated that he was carrying the same for a monetary consideration for Vasu Arumugam @ Manoj. He stated that the said co-passenger of the appellant who is an Indian and knew him as Manoj would clear his checked in baggage and bring it out of the airport. The appellant showed the Indian passport of the said Manoj and handed over the same to the officers. The name in the passport was Shri Vasu Arumugam.
3. Under mahazar proceedings dated 17/18.2.2009, the gold jewellery totally weighing 9994.38 grams, USD 5,380, Singapore Dollars 230, Sony Bravia LCD TV valued at Rs.1,60,22,391/- were seized. The airline e-ticket of the appellant, counterfoil of the checked in baggage, boarding pass, customs declaration form, the three lists showing the weights and quantities of the gold and the photocopy of the three lists found on the person of the passenger were also seized under the mahazar. The statement of the appellant Shri Rajan Ran was recorded on 18.2.2009 under sec. 108 of the Customs Act, 1962. Shri Vasu Arumugam could not be located and a search was conducted at his residence on 18.2.2009. The appellant was remanded to judicial custody.
4. Later, the appellant gave a representation dated 25.2.2009 to the Chief Commissioner of Customs, Chennai where he has stated that he is a citizen of Singapore of Indian original and his father and mother belong to Nagapattinam, Tamil Nadu. He purchased from Singapore the gold ornaments weighing 9994.38 grams and that he is authorized to import gold jewellery and sell them in India. He brought them with the idea to earn interest by depositing the sale proceeds in banks. He knew that customs duty has to be paid and the dollars he carried was for paying the customs duty. He stated that he did not attempt to smuggle the jewellery. It was also stated that he did not conceal the jewellery or the dollars. Further, statements were given on 30.5.2009 in which he furnished details of the shop in Singapore from where he purchased the gold jewellery. Invoices for the purchase of the gold jewellery were also produced.
5. Vide Notification No. 31/2003-Cus dated 1.3.2003, gold ornaments excluding ornaments studded with stones or pearls upto 10 kilograms can be imported by an eligible passenger in his baggage arriving in India on payment of customs duty of Rs.250 per 10 grams. As per sec. 77 of the Customs Act, 1962, the owner of the baggage shall, for the purpose of clearing it, make a declaration of its contents to the proper officer. As per para 2.20 of the Foreign Trade Policy 2004 – 2009 formulated under sec. 5 of the Foreign Trade (Development and Regulation) Act, 1992, bonafide personal baggage may be imported by a person coming to India from a foreign country. The Central Government have made provisions for prohibiting, restricting or otherwise regulating import or export of goods under sec. 3(3) of Foreign Trade (Development and Regulation) Act, 1992 and as per the said section, all goods to which sub-section (2) applies shall be deemed to be goods, the import or export of which has been prohibited under sec. 11 of the Customs Act, 1962. Non-bonafide baggage is to be treated as prohibited goods under sec. 11 of the Customs Act, 1962 r/w sec. 3(3) of Foreign Trade (Development and Regulation) Act, 1992. Such foreign goods brought as non-bonafide passenger baggage without declaration of the same are liable to confiscation under sec. 11 of the Customs Act, 1962 and the person concerned therewith is liable to penal action under sec. 112 and punishment under sec. 135 of the Customs Act, 1962 rad with Section 11(1) of Foreign Trade (Development and Regulation) Act, 1992.
6. Based on the above investigation, Show Cause Notice was issued to the appellant and also Shri Vasu Arumugam by DRI under sec. 124 of the Customs Act, 1962. The appellant replied to the Show Cause Notice on 19.9.2009. Shri Vasu Arumugam did not reply to the Show Cause Notice nor did he appear for personal hearing.
7. After due process of law, the adjudicating authority vide order impugned herein passed the following order:-
(i) I order for confiscation of the assorted gold jewellery totally weighing 9994.38 grams and valued at Rs.1,55,95,610/- (Indian Market value), Rs.1,42,84,146/-(International Value) under section 111(d), (l) and (m) of the Customs Act, 1962 read with Section 3 of Foreign Trade (Development and Regulation) Act, 1992.
(ii) I order for confiscation of the 40 inches Sony Bravia 40V LCD Television Model No. KLV-40V400A valued at Rs.1,50,000/- on the day of seizure under section 111(d), 111(l) and 111(m) of the Customs Act, 1962
(iii) I order confiscation of the foreign currency of USD 5,380 and 230 Singapore dollars equivalent to Rs.2,76,781/- on the day of seizure under sec. 111(d) read with Regulation 6 of the Foreign Exchange Management (Export and Import of Currency) Regulations, 2000.
(iv) I impose a penalty of Rs.55,00,000/- (Rupees fifty five lakhs only) on Shri RajanRan under sec. 112(a) of the Customs Act, 1962 and
(v) I impose a penalty of Rs.10,00,000/- (Rs. Ten lakhs only) on Shri Vasu Arumugam under sec. 112(a) of the Customs Act, 1962.”
8. Aggrieved by the above order in which the gold jewellery, Sony Bravia TV, foreign currencies has been absolutely confiscated and penalties have been imposed, the appellants are now before the Tribunal.
9. The learned counsel Shri B. Satish Sundar appeared and argued for the appellants. The foremost argument put forward by the learned counsel is that the entire case of the department is based on the allegation that the appellant has not declared the gold jewellery or the foreign currencies. Though it is stated that the declaration form has been seized under mahazar proceedings, the department has not produced it as part of the relied upon documents. The appellant, in fact, was waiting to declare the items and pay appropriate customs duty. He had sufficient dollars for making payment of customs duty towards the gold jewellery carried by him. The allegation of the department that the appellant had made false declaration and intended to smuggle the gold without paying duty is without any basis. The allegation that the appellant failed to declare the dutiable goods cannot sustain as the department has not furnished the alleged declaration.
10. The entire case is based on the statements recorded from the appellant Shri Rajan Ran. These statements were retracted immediately and these statements cannot be relied at all. Further, the appellant is an eligible passenger who is entitled to import gold into India. He adverted to Notification No. 31/2003-Cus. which reads as under:-
“In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962) and in supersession of the notification of the Government of India in the erstwhile Ministry of Finance (Department of Revenue) No. 171/94-Customs, dated the 30th September, 1994, published in the Gazette of India, vide number G.S.R. 733 (E), dated the 30th September, 1994, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts goods of the description specified in column (2) of the Table below and falling under Chapter 71 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), when imported into India by an eligible passenger, from so much of the duty of customs leviable thereon which is specified in the said First Schedule, as is in excess of the amount calculated at the rate as specified in the corresponding entry in column (3) of the said Table and from the whole of the additional duty leviable thereon under section 3 of the said Customs Tariff Act.
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