ORDER
Gowri Shankar, Member (T)
1. The appellant before us imported a consignment of goods, described in the air way bill issued by the carrier as “personal and household goods.” Acting on the information that they had received, the Customs officers examined the goods before any declaration has been made for its clearance and seized them. The goods consisted of mostly items in trade quantity for example 333 spectacle frames, 265 ball point pens, 641 watch straps. The passenger, on examination by the officers, admitted the purchase and import of the goods, saying that his intention was to sale them in order to make a profit. In the order impugned in this appeal, the Commissioner has found that the goods could not be baggage, by virtue of the provisions of paragraph 5.6 of the Export Import Policy 1997 2002; that most of the goods were prohibited for import without a licence. He has therefore ordered their confiscation under Clause (d) of the Act, and imposed a penalty on the appellant.
2. The contention of the Counsel for the appellant is that the Import Policy permits, in paragraph 5.2, import of these goods by any person. The appellant was therefore entitled to import these. Even though paragraph 5.6 appears to restrict the import of such goods by passenger, the benefit of the conflict between the provisions would go to the passenger. In any event, the goods have not been declared to be baggage, and there is no warrant for holding that they were cleared by the appellant. Of the goods imported valued at Rs. 29.00 lakhs approx, the appellant does not wish to clear spectacle frames valued at Rs. 23.00 lakhs. Of the remaining goods, watch dials, cases, straps and other watch parts, parts of fountain pen, cases for pen, garments, leather belts, refills of ball point pen are freely importable. The import of other goods is not prohibited but only restricted and they may be permitted on appropriate redemption fine.
3. The departmental representative emphasises the provisions of paragraph 5.6 of the Policy and the part that the importer had described the goods as personal and household goods. He says that the facts of the case demands deterrent action.
4. We find a conflict in the provisions of the policy with regard to import of items by a passenger as baggage with are otherwise freely importable. Paragraph 5.2 of the Policy makes it clear that the goods which are importable without any restriction may be imported by any person. It says “Capital goods, raw material, etc. and other goods (emphasis ours), which are importable without any restriction, may be imported by any person. It goes on to say that where such import requires a licence, the actual user may import them, unless this condition is dispensed with. Paragraph 5.6 says “Samples of such items that are otherwise freely importable under this Policy may also be imported as part of a passenger baggage without a licence.” Now, a passenger would belong to the category of “any person” figuring in paragraph 5.2. Paragraph 5.2 thus itself permits a passenger to import goods which are freely importable. Why paragraph 5.6 should restrict import by passengers of such goods is unclear. It also makes no sense. If the appellant before us could, as a commercial venture, import, say that, 10 million watch cases without a licence, it makes no sense that he could not import 500 watch cases as baggage. Such a restriction would have made sense in the earlier days, when the policy was strict and rigorous. At that time, passengers were permitted to import as baggage items which were otherwise not importable. The consideration was that these goods were for personal and household use and there would be no outgo of the foreign exchange.
5. Those considerations would no longer apply. We are therefore of the view that the policy does not restrict import by passengers of goods, which are otherwise freely importable without a licence. In any event, even assuming that this conclusion is incorrect, it would still be correct to say that the appellant had not declared these goods to be baggage. The position would have been different if the officers waited till the appellant filed a baggage declaration form. But they did not. In theory, the appellant could no doubt file a bill of entry for clearance of these goods. The description of the goods in the airway bill is not an entry within the meaning of the Act. In any event, Clause (m) of Section 111 of the Act has not been invoked for alleging misdeclaration. Confiscation is only under Clause (d) of Section 111.
6. We, therefore, conclude that confiscation of the goods which were otherwise freely importable is not called for and set aside the confiscation of such goods valued at Rs 4.24 lakhs. We confirm the confiscation of the spectacle frames as not having challenged. We also confirm the confiscation of other goods valued at Rs 2.76 lakhs under Clause (d) of Section 111 of the Act.
7. We however permit their redemption on payment of fine. Having regard to the fact that the appellant did attempt to import these goods without a licence, and their value and quantity, and since the possibility that it cannot be excluded in the facts of this case, we direct the Commissioner to fix the redemption fine, not, as he may normally do, on the basis of margin of profit but by applying the provisions of Sub-section (2) of Section 125 of the Act i.e. on the sale price less duty payable thereon. On the same consideration, we are unable to interfere with the penalty imposed and confirm it.
8. Appeal allowed in part.