PARTIES: AHMED GANI NATCHIAR vs COMMISSIONER OF CUSTOMS Appearances: For Appellant: Ms. Shabnam Banu For Respondent: Depratment Representative- Joint Commissioner This appeal arose before The Customs Excise and Service Tax Appellate Tribunal (CESTAT) challenging on the absolute confiscation of 626 grams of gold jewellery that belonged to the Appellant, a resident of Malaysia, under Sections 111(d) and 111(l) of the Customs Act, 1962 and imposition of penalty under Section 112(a) of the same Act by the customs authorities. The appellant was intercepted at the Airport and was interogated and gold jewellery was seized.
Appearances:
For Appellant: Ms. Shabnam Banu
For Respondent: Depratment Representative- Joint Commissioner
This appeal arose before The Customs Excise and Service Tax Appellate Tribunal (CESTAT) challenging on the absolute confiscation of 626 grams of gold jewellery that belonged to the Appellant, a resident of Malaysia, under Sections 111(d) and 111(l) of the Customs Act, 1962 and imposition of penalty under Section 112(a) of the same Act by the customs authorities. The appellant was intercepted at the Airport and was interogated and gold jewellery was seized.
The Hon’ble Madras High Court vide an Order directed the tribunal to dispose off matter at the earliest and a special bench was constituted. The Hon’ble bench clarified that the notion of “baggage” in the instant case is highly misplaced as it does not apply to the present case and therefore held the Respondent’s argument to be untenable. It is pertinent to bring to light here that this novel question of law has been earlier dealt only by the Hon’ble High Court of Kerala and this is one of the very few cases in the country wherein the legal question pertaining to what constitutes baggage is being dealt with by a Tribunal.
The Appellant challenged the grounds of confiscation which are concealment, intent to smuggle, purity of gold, and the veracity of the mahazar document which the Respondent solely relied upon to establish their case. Placing reliance on a catena of High Court and Apex Court judgements, that Section 125 of the Customs Act has been misdirected in the present case and the opportunity to pay fine in lieu of confiscation was denied to the Appellant.
The Tribunal, after perusing the records submitted by the Respondent, called it “flimsy” and bereft of any investigation and pointed out that undue advantage was taken by the authorities in making the Appellant waive her right to present a show cause notice. Further, conceding with the Appellant’s argument that gold is not a “prohibited item”, the Tribunal also pointed out that as the Appellant argued, there is no possibility of manufacturing jewels from “24 carat gold” as stipulated in the mahazar in the absence of a certificate to that extent. The Tribunal set aside the confiscation under Section 111 of the Act and also held that the gold is not susceptible to any kind of duty. The Tribunal levied only a penalty and directed the Appellant to retrieve here gold jewellery. It is pertinent to note that this decision is sui-generis in this untrodden subject matter by the Hon’ble Bench of CESTAT, Chennai.
