CESTAT Directs Release of Seized Gold on payment of Concessional Duty

CESTAT Directs Release of Seized Gold on payment of Concessional Duty

The Custom, Excises, Service Taxes Appellate Tribunal (CESTAT), Delhi bench, Judicial Member Anil Choudhary gave directions for the release of seized gold on payment of Concessional duty

The CESTAT partly allowed the appeal and held that confiscation of gold by the revenue is set aside as Concessional duty is payable under Notification No. 12/2012-Cus. It upheld the absolute confiscation of cigarettes but reduced the penalty under Section 112(a)(i) to Rs.10,000.

Mr. Asalam Khan (appellant) claimed that he was working as a road cleaner in Dubai. He stayed in Dubai for a period of more than 24 months.

The appellant contended that when he came to India (at Jaipur Airport) from Dubai, he was intercepted by the officers of Air Customs, at the exit gate and was asked whether he had any dutiable/contraband goods to which he replied in negative.

He further stated that the officers again X-rayed for a detailed examination of his baggage, one of his checked-in baggage contained 20 yellow metal discs concealed in 10 lids of Tiger Balm and 4 cartons of Gudang Garam International Cigarettes.

The officers seized the gold and the 4 Cartons of Cigarettes (valued at Rs.10,000/-) under Panchnama dated 28 February 2017, on the reasonable belief that the gold discs and Cigarettes were liable to confiscation under Section 111 of the Customs Act.

According to the Revenue Department, as per Rule 3 of Baggage Rules, 2016, (Rule),an Indian returning to India is not allowed to import gold in any form other than ornaments in his baggage.

As per amended Entry No. 321 of Notification dated 17 March 2012, goods are exempted from heavy Customs duty leviable on gold bars, other than tola bars, bearing manufacturers or refiner's engraved serial number and weight expressed in metric units and gold coins having gold content no below 99.5% imported by the eligible passenger. It excluded the ornaments studded with stones or pearls, over 10% of the amount calculated at the standard rate.

The Revenue issued a Show Cause Notice on 13 July 2017 to the appellant asking reasoning for non-confiscation of the 20 gold discs weighing totally 233.00 grams valued at Rs. 6,32,362/- along with 4 cartons of GGI Cigarettes (240 sticks x 4 or 960 sticks) valued at Rs. 10,000/- under Section 111(d), (i), (j) (l) and (m) of the Act.

The appellant preferred an appeal before the Commissioner (Appeals) and the appeal was dismissed on the ground that the appellant had not filed the declaration, but attempted to smuggle the goods with intent to evade payment of duty.

On behalf of the appellant it was urged that the appellant is a bona fide eligible passenger and accordingly, absolute confiscation of the seized goods is bad, on the sole ground of non-declaration and alleged concealment. It was further stated that the appellant was carrying gold in a small quantity, which is not a commercial quantity by any stretch of the imagination. The charge of smuggling is bad and fit to be set aside.

The ITAT held, "The appellant is eligible to pay concessional duty as provided under Notification No. 12/2012-Cus read with the provisions of Customs Tariff Act and there is no case of an alleged violation of the provisions of Section 111(d), (i), (j), (l) and (m) so far gold is concerned. The seized gold is to be released to the appellant on payment of concessional duty."

It further directed, "Cigarettes are concerned, it is not a commercial quantity. However, the appellant was entitled to import only 100 sticks (duty-free). Accordingly, I uphold absolute confiscation of the cigarettes (being 960 sticks in quantity) valued at Rs. 10,000/-. Further, I reduce the penalty under Section 112(a)(i) to Rs.10,000/.A penalty under Section 114AA is set aside."

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