Telangana High Court
Smt.Elete Suseela, And Another vs Government Of India, And 4 Others on 19 March, 2024
Author: P.Sam Koshy
Bench: P.Sam Koshy, N.Tukaramji
THE HONOURABLE SRI JUSTICE P.SAM KOSHY
AND
THE HONOURABLE SRI JUSTICE N. TUKARAMJI
Writ Petition No.13867 of 2019
ORDER:
(per Hon'ble Sri Justice P.SAM KOSHY) The instant Writ Petition has been filed by the petitioners under Article 226 of the Constitution of India praying the Court to issue a Writ, Order or direction, more particularly one in the nature of Writ of Mandamus to declare: (1) the Order-in-Original No.108/2014-Adjn.Cus (ADC), dated 30.12.2014, passed by the Adjudicating Authority and (2) the order of the Appellate Authority dated 26.03.2018 in Appeal No.HYD-CUS-000-APP- 152 & 153-17-18 and order passed in Appeal No.6/2015-(D)Cus, dated 22.05.2015, and the consequential order in Appeal No.C/31096/2018, dated 01.04.2019 (Final Order No.A/30446/2019) (for short, 'the impugned order'), as totally arbitrary, irregular and without basing on the facts and consequently to set aside the same.
2. Heard Mr.A. Ramakrishna, learned counsel for the petitioner and Mr.Dominic Fernandes, learned Senior Standing Counsel for Central Board of Indirect Taxes (C.B.I.C.), for the respondents.
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3. The impugned order is one which has been passed by the Customs, Excise and Service Tax Appellate Tribunal, Regional Bench at Hyderabad (C.E.S.T.A.T.), (for short, 'the Tribunal') on 01.04.2019 whereby the Tribunal had affirmed the Order-in- Appeal, dated 26.03.2018, passed by the 2nd respondent in Appeal Case No.HYD-CUS-000-APP-152&153-17-18.
4. The brief facts which led to the filing of the present Writ Petition is that the petitioners herein are wife and husband who had in the year 2014 gone to the United States of America where they had stayed for a period little less than six months. After staying there for some time, the petitioners came back to India on 29.10.2014 via Doha and from Doha they took the flight to Hyderabad. After collecting their baggage, the petitioners passed through the green channel and just while they were about to cross the exit gate, the officials of the respondents stopped the petitioners for searching their baggage. When the petitioners were passed through the metal detector, the 'beep' sound ran and it was found that petitioner No.1 was wearing five (05) gold bangles, the value of which at that point was ₹.8,50,185/-. When the bangles were subjected to test, the same were found to be of pure gold and the purity thereof being 99.9 and the total weight of the five bangles was around (311.00) gms. During the 3 course of investigation, the petitioners took a stand that the gold bangles were given to them by her daughter while she was in Chicago.
5. After thorough investigation, it was found that petitioners have not given proper declaration in respect of the gold they were bringing in even if it was allegedly in the form of jewelry or bangles. Secondly, it was found that the petitioners were carrying gold much beyond the permissible limit for a passenger to bring from overseas in accordance with the Foreign Trade Policy applicable at the relevant point of time. For the aforesaid non-disclosure of value of the gold being brought and the weight of the gold and the price of the gold being much beyond the permissible limits, the five (05) bangles were liable to be confiscated under Section 111(i) of the Indian Customs Act, 1962 (for short, 'the Act').
6. On completion of the investigation, a show-cause notice was issued to which the petitioners responded, and finally the Order-in-Original was passed on 30.12.2014 ordering confiscation of gold under Section 111(i) of the Act.
After the above order of confiscation was passed, the authorities concerned gave them an option of redeeming the 4 goods on payment of fine and penalty under Section 112(a)(ii) and also under Section 114(AA) of the Act. In addition, the petitioners were also given the option to re-export the said gold bangles.
7. Aggrieved by the Order-in-Original No.108/2014-Adjn.Cus (ADC), dated 30.12.2014, whereby the petitioner was permitted to redeem the gold upon payment of fine, the order of re-export along with penalties were subjected to challenge in an Appeal under Section 138(i) of the Act. The Appellate Authority, upon due consideration of the contentions put forth by the petitioners herein, had preferred an appeal before the CESTAT challenging the Order-in-Original. Both these appeals came up for hearing together and the appellate authority vide its order dated 30.12.2014 dismissed the appeal filed by the petitioners, whereas the appeal filed by the respondent-Department was partly allowed by modifying the Order-in-Original to the extent that the petitioners would be liable to pay customs duty @ 35% plus cess, as is applicable on the gold. It is this order which was subsequently subjected to challenge before the CESTAT.
8. The CESTAT also after hearing the petitioners has decided the appeal elaborately dealing with all the issues that the petitioners have raised as grounds in the appeal that they had 5 preferred and finally vide the impugned order rejected the appeal confirming the order passed by the Commissioner Appeals. It is these orders which are under challenge by the petitioners in the instant appeal.
9. Learned counsel for the petitioners highlighted the fact that the authorities concerned and also the Appellate Tribunal failed to appreciate the fact that there was no mens rea on the part of the petitioners to smuggle gold into India. According to the petitioners, the fact that the bangles were worn by petitioner No.1 on her hand which was glaringly visible to one and all itself establishes that the petitioners did not have an intention of suppression or there was an intention of bringing the said product by hiding the same either physically or by hiding within the baggage.
10. According to the learned counsel for the petitioners, the fact that the adjudicating authority himself had permitted the petitioners to re-export gold without any duty clearly indicates that it was not an act of smuggling on the part of the petitioners. The fault on the part of the authorities concerned in not appreciating the gold bangles worn by petitioner No.1 was not a prohibited good but was personal jewelry which was permissible for any citizen of India to wear and come.
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11. It was also the contention of the learned counsel for the petitioners that once when the petitioners were given the option to re-export the gold ornaments without payment of duty, thereafter passing an order for payment of duty, fine and penalty under Section 112a and 114AA of the Act is highly unjustified, unfair and arbitrary on the part of the respondents. According to the learned counsel for the petitioners, both of them are senior citizens and had gone to visit their daughter in United States of America and it was a gift on the part of their daughter and therefore, they had brought it.
12. It was the contention that the petitioners did carry a declaration form and it was in the pocket of petitioner No.2 and for this reason, the authorities concerned ought to have taken a sympathetic view and imposition of penalty, fine and duty had been waived.
13. Per contra, learned counsel for the respondent-Department opposing the petition submits that it is a clear case where the petitioners had illegally tried to smuggle gold worth more than Rs.8.5 lakhs without even declaring the same in the course of bringing it into the country. It is a case where in fact the authorities concerned have already taken a very liberal approach while dealing with the case of the petitioners and therefore there 7 is hardly any scope left for this Court now to invoke its extraordinary jurisdiction under Article 226 of the Constitution of India.
14. It was also the contention of the learned counsel for the respondent-Department that the facts which are narrated in the preceding paragraphs of this order by itself would clearly establish the fact that there being a dispute that the petitioners admittedly brought 311.00 gms. of five gold bangles, the market value of which at that point of time was more than Rs.8.5 lakhs. The gold bangles which is said to have been brought by the petitioners was not in fact a jewelry as it would be evident from the fact that it was pure gold with its purity at 99.9 which is not normally used for manufacture of jewelry and therefore a strong inference has to be drawn. That it was with an intention of suppressing it from the Government and for evading tax and other liabilities that would had occurred in favour of the petitioners.
15. According to the learned counsel for the respondent- Department the case of the petitioners squarely falls within the definition of smuggling and also falls in violation of the foreign trade policy in so far as smuggling of gold is concerned. That since the petitioners have not been saddled with the tax liability 8 of payment of excess duty, but has only been ordered to pay fine and penalty which too has been subsequently reduced substantially by the Appellate Authority, there is hardly any scope left for interfering with the same now.
16. It was also the contention of the learned counsel for the respondent-Department that the fact that the authorities concerned have already taken a liberal view at the first instance and which further stood modified in favour of the petitioners when the penalty amount was further substantially reduced by 1/4th, it cannot be said that the authorities have at any point of time shown any arbitrariness or malafides against the petitioners. For this reason also, the Writ Petition deserves to be dismissed.
17. Having heard the contentions put forth on either side and on perusal of records, it is necessary to be appreciated at this juncture that the imported items from a foreign country into India is classifiable under three (03) categories which for ready reference is reproduced herein under:
"i. Free importable - Goods which are importable without any condition;
ii. Restricted goods - Goods which can be imported subject to fulfillment of certain conditions; and 9 iii. Prohibited goods - Goods which cannot be permitted to be imported into India."
18. In this regard, it is to further mention that gold bangles (kada) brought by the petitioners can be safely held to be one which falls under the restricted category of items. That any restricted item which has been brought into India from foreign country without fulfilling the conditions of import becomes a prohibited item. The Hon'ble Supreme Court in the case of M/s.Omprakash Bhatia vs. Commissioner of Customs, Delhi 1 in paragraph No.9 held as under:
"9. From the aforesaid definition, it can be stated that (a) if there is any prohibition of import or export of goods under the Act or any other law for the time being in force, it would be considered to be prohibited goods; and (b) this would not include any such goods in respect of which the conditions, subject to which the goods are imported or exported, have been complied with. This would mean that if the conditions prescribed for import or export of goods are not complied with, it would be considered to be prohibited goods. This would also be clear from Section 11 which empowers the Central Government to prohibit either 'absolutely' or 'subject to such conditions' to be fulfilled before or after clearance, as may be specified in the 1 (2003) 155 ELT 423 10 notification, the import or export of the goods of any specified description. The notification can be issued for the purposes specified in sub-section (2). Hence, prohibition of importation or exportation could be subject to certain prescribed conditions to be fulfilled before or after clearance of goods. If conditions are not fulfilled, it may amount to prohibited goods."
19. The said judgment has further been reiterated on various occasions. Thus, the said stand gets confirmed. According to the baggage rules, 1998, a person is entitled to import articles in a bona fide baggage including gold ornaments of only up to Rs.15,000/- or of the value of Rs.45,000/- free of duty if the passenger is returning from stay in the foreign country for a period of less than three (03) days respectively. As per the baggage rules, 1998, if a lady passenger is residing abroad for over a period of one (01) year, she is eligible to bring jewelry up to an average value of Rs.1,00,000/- free of duty. In contravention to the same, the petitioners herein have brought bangles weighing around 311.00 gms., the market value of which was more than Rs.8.5 lakhs as assessed by the Government approved valuer.
20. The import and export of goods into and out of India are subject to the provisions of the Foreign Trade (Development and 11 Regulation) Act, 1992. In exercise of the powers conferred by Section 3 read with Section 4 of the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992), the Central Government has framed the Foreign Trade (Exemption from Application of Rules in Certain Cases) Order, 1993. As per Rule 3(h) of this Order, a passenger of Indian Origin or having a valid Indian passport and who has a stay of more than six months abroad is allowed to import gold subject to certain conditions. Further, as per Notification No.12/2012-Customs dated 17.03.2012, as amended, eligible passengers of Indian Origin or having a valid Indian passport and who have a stay of more than six months abroad are permitted to bring gold up to 1 Kg. under concession rate of duty of 10% ad volarem.
21. An international passenger is required to file International Customs Declaration Form (I.C.D.) with the Customs Department under Section 77 of the Customs Act, 1962. Merely wearing the bangles on body by the petitioners does not obviate the statutory requirement of filing an ICD form with the Customs Department. Further, the fact of non-filing this ICD Form and not submitting the same to the Customs Department has not been disputed by the petitioners.
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22. The word "smuggling" has been defined under Section 2(39) of the Act as under :
" "smuggling", in relation to any goods, means any act or omission which will render such goods liable to confiscation under Section 111 or Section 113".
23. Lastly, as regards the contention of learned counsel for the petitioners that imposition of custom duties by the adjudicating authority while extending the option to re-export the gold bangles to be bad, it is necessary to appreciate that the petitioner in the instant case was not eligible for duty-free clearance of gold bangles brought from a foreign country leading to its confiscation. The petitioners were permitted to redeem only on payment of redemption fine and appropriate customs duty so that the gold bangles would be cleared for domestic consumption. However, the option of re-export of gold bangles does not provide any right on the petitioner to get the gold bangles cleared for home consumption and it is under these circumstances that no duty is demanded on the option of re-export of gold bangles. Thus, for all the aforesaid reasons we do not find any illegality or perversity on the part of the adjudicating authority at the first instance and then by the Commissioner of Appeals subsequently, while modifying the 13 order, both of which subsequently stood affirmed by the CESTAT vide the impugned order under challenge in the present case.
24. The decision relied on by the learned counsel for the petitioners in Directorate of Revenue Intelligence vs. Pushpa Lekhumal Tolani 2 is a decision which is distinguishable on its facts itself and would not come to the rescue of the petitioners for the simple reason that the facts of the case are entirely different to the facts in the instant case.
25. In the case of Pushpa Lekhumal Tolani (2 supra), the respondent therein had come to India from London as a tourist and under the Baggage Rules, tourists were permitted to bring in personal old jewelry. In was in this context that the said decision was rendered, and unlike the facts of the instant writ petition where the factual matrix which has been narrated in the initial part of this judgment would itself clearly indicate the distinction of the facts in the present writ petition with the facts of the case in Pushpa Lekhumal Tolani (2 supra).
26. Further, the Delhi High Court in the case of Ms. Jasvir Kaur vs. Union of India 3, the learned Division Bench, while dealing with the responsibility of the person who brings high 2 AIR 2018 S.C. 438 3 AIR 1992 DELHI 332 14 value articles with them, held at paragraph Nos.6 and 7 as under, viz., "6. It is the tourist who knows as to whether he has brought with him any article of high value. As we read Rule 7 it appears to us that it is incumbent on the tourist who comes into this country bringing with him articles of high value which are intended to be re-exported by him when he goes out of the country, to make a declaration and give the undertaking as contemplated by Rule 7. For the sake of convenience the Customs authorities may distribute a list to the passenger who lands at the airport but even if, without demand, no such list is given to a passenger but the passenger has brought an article of high value, then it is for him to give an undertaking as contemplated by sub-rule (1) of Rule 7. It is for him to ask for the form in which an undertaking is to be given. Sub- rule (2) has to be read along with sub-rule (1) and the said sub-rule requires a list of articles of high value to be given by the tourist. If, for any reason, the Customs authorities on their own do not give a list to be filled by a tourist that does not absolve the tourist of his obligation to obtain a list and list the articles of high value which have been brought by him.
7. In the present case, admittedly this was not done. It is only if such a list which is filed is signed can the articles be cleared for export when the tourist leaves India."
27. In the instant case, the petitioner No.1 was in possession of the gold bangles while passing through the Green Channel of 15 the Customs at the Rajiv Gandhi International Airport, Shamshabad. Despite possessing the gold bangles which are dutiable goods, the petitioners neither adopted the Red Channel nor submitted the ICD Form to the Customs Department and thus tried to take the undue advantage of the Green Channel facility at the Customs violating the provisions of Section 77 of the Act.
28. It is an admitted fact that in the case on hand petitioners do not satisfy the condition of having stayed abroad for more than six months and the same has not been disputed by the petitioners before the appellate foras. In view of this, since the petitioners are not eligible passengers in terms of the provisions of the Foreign Trade (Development and Regulation) Act, 1992 read with the Foreign Trade (Exemption from Application of Rules in Certain Cases) Order, 1993, the original authority was correct in finding the petitioners ineligible to import the gold bangles. Thus, the order of the original authority to confiscate the gold bangles in terms of Section 111(1) of the Act, cannot be found fault with.
29. Another reason why this Court is not inclined to entertain the Writ Petition is the fact that the petitioners have voluntarily availed the option that was floated by the adjudicating authority 16 at the first instance. Having availed the option floated and having paid the redemption fine and customs duty while redeeming the gold bangles, the petitioners cannot now be permitted to turn around and challenge the order which he has voluntarily complied with.
30. Therefore, for all the above reasons, we are of the considered opinion that the present Writ Petition, being devoid of any merit, deserves to be and is accordingly dismissed. No costs.
31. Consequently, miscellaneous petitions pending, if any, shall stand closed.
__________________ P.SAM KOSHY, J ___________________ N. TUKARAMJI, J Date : 19.03.2024 Ndr/Gsd