ORDER
S. Kalyanam, Member (J)
1. Since the above appeals arise out of the common impugned order, they are taken up together and disposed of by a single order.
2. The appeals are directed against the order of the Additional Collector of Customs, Madras, dated 7.10.1986 absolutely confiscating notified and non-notified goods respectively valued at Rs. 37,076 and Rs. 6,550 detailed in the impugned order, under Section 111(d) and (p) of Customs Act, 1962, read with Section 3(2) of the Imports and Exports (Control) Act, 1947 besides a penalty of Rs. 20,000 on appellant Azeez Khan, Rs. 5,000 on appellants Arul Samy and Ibrahim and Rs. 2,000 on the other appellants under Section 112 of the Customs Act, 1962, the ‘Act’ for short.
3. On 15.9.1985 at about 10.30 a.m. the Inspector of Police, Triplicane Police Station, intercepted appellant Ibrahim, when he was coming out of No. 16, Owalia Sahib Street, Ellis Road, Madras — 2, and recovered from him a hand-bag containing 20 packets of fancy imitation gold chains of foreign origin, each chain valued at Re. 1/-.The Police further searched the said residence No. 16, Owalia Sahib Street, Ellis Road, Madras — 2, and recovered from a room under the occupation of appellant Azeez Khan electronic goods, textiles, YKK zip fasteners, wrist watches, wall clocks, nylon sarees, pant bits, shirtings of foreign origin valued at Rs. 43,626 c.i.f. besides foreign currency equivalent to Indian Rs. 392 as detailed in the impugned order. Appellant Ibrahim gave a statement that he was assisting appellant Azeez Khan in the purchase and sale of goods of foreign origin and appellant Arul Samy also gave a statement that he was engaged as a broker for purchase and sale of goods of foreign origin by appellant Azeez Khan. Appellant Azeez Khan also gave a statement that he was engaged as a broker in Burma Bazaar and used to buy goods of foreign origin and sell them at a profit. It is in these circumstances, after further investigations, proceedings were instituted against the appellants by the Customs authorities resulting in the present impugned order now appealed against.
4. Shri Abdul Huck, the learned counsel for the appellants, submitted that the goods under confiscation fall under two categories viz. notified goods and non-notified goods. Apart from it the goods in question were brought by appellants Jaffer All, Arul Samy, Rajsekar, Nazar and Abdul Gani, as passengers returning from abroad and the goods were left with appellant Azeez Khan. The learned counsel submitted that in respect of the goods, whether notified or non-notified, if they had been cleared under baggage on payment of duty, the goods would not become liable for confiscation under Section 111(d) of the Act. The learned counsel in this connection placed reliance on the ruling of the decision of the CEGAT, West Regional Bench, Bombay, in the Case of Manoharlal T. Punjabi v. Addl. Collector of Customs (P), reported in 1985 (21) ELT 154 (Tribunal). The learned counsel further urged that even if there is a violation on the part of the various passengers in regard to the Baggage (Conditions of Exemption) Rules, 1975 the goods would not become liable for confiscation unless in terms of Rule 2 thereunder the goods were exempted from payment of import duty. The learned counsel further contended that the goods in question were pledged or hypothecated with appellant Azeez Khan, who had lent money as loan to the various Dassengers to enable them to pay duty for the goods and, therefore, even in respect of notified goods under Chapter 1V-A of the Act if the conditions stipulated under Section 11-C, 11-D, 11-E and 11-F are violated, the contravention would only be in the nature of an irregularity not warranting absolute confiscation. The learned counsel further submitted that no offence has been committed by the various passengers, who are appellants herein, and, therefore, the penalty of Rs. 2,000 imposed on each of them under the impugned order is not legally tenable.
5. Shri Krishnan, the learned D.R., submitted that the baggage receipts produced do not cover all the goods in question and the value of the goods also is not fully covered under the baggage receipts. The learned D.R. further urged that even if the goods are cleared under baggage on payment of duty, the passengers are under a statutory obligation to adhere to the condition under the Baggage (Conditions of Exemption) Rules, 1975 and cannot sell the goods. The learned D.R. in this context placed reliance on Appendix I-B of the Exports (Control) Order, 1955 and on clause 11(1) (g) thereunder and contended that the passengers should not sell the goods unless the market price of the goods has depreciated to less than 50% of the price when the goods were new. The learned D.R. further urged that the statement recorded from appellants Azeez Khan, Arul Samy and Ibrahim are inculpatory in nature and would merit acceptance. The learned D.R. further urged that even if confiscation under Section 111(d) is not permissible in respect of goods cleared under baggage, the goods would become liable for confiscation in terms of Section 111(o) of the Act and this charge has been specifically set out in the show cause notice.
6. I have carefully considered the submissions made before me. The seizure of the goods from the possession of appellant Azeez Khan is not disputed. It is also not further disputed that the statement of appellant Azeez Khan, Arul Samy and Ibrahim are inculpatory in nature. The question that arises for my consideration in the appeals is whether the goods notified and non-notified are liable for confiscation under the Act in the facts and circumstances of the case. A number of baggage receipts have been produced by the appellant Azeez Khan from whose possession the goods were admittedly recovered. On going through the baggage receipts I am inclined to agree with the submission of the learned D.R. that the baggage receipts do not cover all the items under seizure much less the value of all the items. I agree with the learned D.R. that even in respect of goods which have been cleared under baggage on payment of duty even if they are not confiscable in terms of Section 111(d) of the Act, the goods would become certainly liable for confiscation under Section 111(o) of the Act. Section 111(o) clearly states that the goods shall be liable for confiscation if the import of the same is prohibited either under the Customs Act, 1962 or under any other law for the time being in force in respect of which the condition subject to which the goods are imported is not observed. In the instant case the Imports (Control) Order, 1955 made under the Imports and Exports (Control) Act, 1947, Clause 11 stipulates that nothing in the said order shall apply to import of any goods by a person as passenger baggage provided the exemption shall be subject to the condition that such goods shall not be sold or offered for sale or displayed for sale by the person or, passenger unless the market price has depreciated to less than 50% of the market price when the goods were new. In other words, the import of most of the goods admittedly is not permissible in law except with a valid import licence. If such of those goods are permitted to be brought by passengers under exemption and if such an exemption is subject to the conditions that the goods shall not be sold or offered for sale or displayed for sale unless the value has depreciated to less than 50% of the market value, such condition would come within the mischief and ambit of Section 111(d) and (o) of the Act rendering the goods in respect of which the violation is proved confiscable under the Act. In my opinion the ratio of the ruling relied upon by the learned counsel and referred to supra is not applicable to the facts and circumstances of the case. The Supreme Court has clearly held in the case of Sheikh Mohd. Omer v. Collector of Customs, Calcutta, reported in AIR 1971 Supreme Court 293 that the prohibition envisaged by Section 1ll(d) of the Act applies to every type of prohibition. The prohibition may be complete or partial. Any restriction on import or export is to an extent a prohibition. Therefore, Section 111(d) includes restrictions. It would, therefore, be clear that the goods which are permitted clearance subject to certain conditions would become liable for confiscation under the Customs Act, 1962 under Section 111(d) and (o), if the conditions are not complied with. Therefore, the passengers who are alleged to have sold the goods as per the statements of the appellants referred to above would also be liable to be proceeded against penalty for breach of the conditions subject to which clearance was submitted to them in respect of the goods under law. Therefore, on careful consideration of the entire materials on record I am inclined to hold that the findings of the adjudicating authority that the goods are liable for confiscation and the appellants are liable for penalty are correct and sustainable in law.
7. Shri Abdul Huck, the learned counsel, made a fervent plea for release of the goods on payment of a fine. I find that some of the goods have already suffered duty having been cleared as baggage as evidenced by the baggage receipts. In respect of the goods which have already suffered duty and which have been cleared under baggage, even if they become technically liable for confiscation for violation of the condition attached to such clearances as baggage, this Tribunal has taken the view that absolute confiscation in those circumstances may not be warranted. Keeping this factor in mind, I hold that goods which are proved to have suffered duty as per law under the baggage receipts would be released on a payment of a fine of 50% of the value of each item. Likewise, goods which are not notified goods and which are not covered by baggage receipts are permitted to be cleared by the appellant on payment of duty as per law in addition to fine of 50% of the value of each of the goods. In respect of notified goods, which are not covered by any duty paid baggage receipts in the case, I uphold the order of absolute Confiscation. In respect of non-notified goods and covered by the baggage receipts evidencing payment of duty, I direct that they be released on payment of a fine of 50% of the value of each goods. Since I do not have all the records before me and since the learned D.R. finds it difficult to correlate the nature of the goods, the duty paid on it with reference to the baggage receipts, I think it proper to leave that issue to be decided by the adjudicating authority himself with reference to the goods and relevant records. In this view of the matter I remand this issue to the adjudicating authority to be decided in the light of the directions indicated above. So far as the quantum of penalty is concerned, in the facts and circumstances of the case, I reduce the penalty imposed on appellant Azeez Khan from Rs. 20,000 to Rs. 10,000 (Rs. Ten thousand), the penalty on appellants Arul Samy and Ibrahim from Rs. 5,000 each to Rs. 3,000 (Rs. Three thousand) each, the penalty imposed on the other appellants is reduced from Rs. 2,000 each to Rs. 500 (Rs. Five hundred) each. Except for the modifications indicated above, the appeals are otherwise dismissed.