Order Date – 6th July 2022

Facts – 

• The Respondent, Sri Rajesh Jhamatmal Bhat and Anr., had been intercepted by the G.R.P. (Government Railway Police) and during search gold bars were recovered from the specially designed cavities made in the shoes of the respondents.
• The gold bars were found to be weighing 4,076 grams and valued at Rs.1,09,98,018/- only. On 30.12.2015 the Additional Commissioner had passed an order for absolute confiscation of the seized gold bars and some foreign currencies recovered from the respondents. Further a penalty of Rs.10,00,000/- was imposed on each of the respondents.
• The respondent filed an appeal in which the tribunal held that gold is not a prohibited item under the foreign trade policy, the only offence made out in respect of the Gold bars is its non-declaration in the disembarkation slip in contravention of Section 77 of the Act rendering the same liable to confiscation under Section 111 (1) of the Act. 
• Therefore they gave an option to redeem the confiscated gold on payment of redemption fine of Rs.25,00,000/- with applicable duty, which was later modified to Rs.15,00,000/- and the penalty was reduced to Rs.5,00,000/-.
• Aggrieved the appellants filed an appeal.

Issue – 

• Whether the appellate tribunal has exceeded his jurisdiction while modifying the order passed by the “adjudicating authority” and whether they are correct in allowing releasing the smuggled gold on redemption of fine and also by reducing the redemption fine? 

Order – 

• The Court observed that the power conferred by Section 128-A (3) (a) of the Act to “modify” the decision or order appealed against, is not at all curtailed by Section 2 (1) of the Act.  Therefore, the Commissioner (Appeals) has not exceeded his jurisdiction while modifying the order passed by the “adjudicating authority”.
• Also, the Additional Commissioner, Customs (P.) Commissionerate, Lucknow had passed the order of confiscation of Gold without taking into consideration the fact that Gold is not a prohibited item.
• The court held that it should be offered for redemption in terms of Section 125 of the Act and thus the Tribunal has not committed any error holding that Gold is not a prohibited item and, therefore, it should be offered for redemption in terms of Section 125 of the Act.
• The court held that the appeal lacks merits and hence, liable to be dismissed.