Non-Offering of Option to pay Fine in lie of Confiscation to the Person in Possession of Gold is Arbitrary: CESTAT [Read Order]

The Bangalore bench of the Customs and Service Tax Appellate Tribunal (CESTAT), while quashing an order of the customs authorities, held that the order of confiscation without offering an option to the person in possession of gold is arbitrary since the provisions of law provide such an option to the person.

Before the Tribunal, the appellant, an individual, argued that the gold did not belong to her but to her neighbor in Kerala and that she had no intention to smuggle the gold. A finding is recorded thereafter that by virtue of the appellant being not the owner of the gold in question which was not declared before the Customs authorities, had rendered the gold liable for absolute confiscation under Section 111 ibid read with Section 3(3) of the Foreign Trade (D&R) Act, 1992. The said authority has also imposed a penalty of Rs. 1,00,000/- under Section 112(a) & (b).

After analyzing the provisions of the law, Judicial Member P. Dinesha observed that the heading of the very Section makes it clear that an option to pay a fine in lieu of confiscation is available.

“Further, an amendment w.e.f. 12/07/1985 is made to include the person from whose possession or custody, the goods have been seized if the owner of such goods is not known who shall be offered an option to pay fine in lieu of confiscation. Therefore as per the above, it is in the nature of a mandate that the officer shall extend, in the case of any other goods, an option to the person from whom the gold is seized since the gold is not a prohibited item. It appears that the gold is treated as a prohibited item and no option for redemption was offered. Hence, non-offering of such an option clearly provided by the statute amounts to arbitrariness which cannot be sustained.”

To Read the full text of the Order CLICK HERE

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