YAKUB IBRAHIM YUSUF Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) HEARD both sides. This appeal is being taken up pursuant to the hon'ble Mumbai High Court's order dated January 27, 2010 in Writ Petition No. 1443 of 2002 and Writ Petition No. 1802 of 2002. This case has a chequered history. Shri Yakub Ibrahim Yusuf (Yusuf) the appellant was intercepted at N.I.P.T., Module II, Mumbai on his arrival from London to Mumbai by AI -132 while he was carrying 25 kgs. of gold. The 25 kgs. of gold was found in two black colour boxes in the brief case along with foreign currency of market value of Indian Rs. 6,54,830. The appellant stated before the DRI officers that the gold carried by him belongs to one Shri Illiyas Patel, Smt. Memuda I. Patel, Smt. Munira M. Laly and her two minor sons, Master Shohil M. Laly and Master Faiyaz M. Laly (hereinafter referred to as five persons). In their statements recorded on October 19, 1992, Shri Illiyas Patel, Smt. Memuda Illiyas Patel and Smt. Munira M. Laly stated that the gold carried by Shri Yakub was not belonging to them and they were not carrying any foreign currency for payment of customs duty. They had also made a written declaration before the customs declaring that they were carrying goods valued at Rs. 2,500, Rs. 2,300 and Rs. 2,000, respectively, and other two passengers, viz., Smt. Memuda I. Patel and Smt. Munira M. Laly had also declared gold ornaments and obtained respective TBREs.

(2.) THE appellant in his statement deposed that earlier he had made six visits from April 5, 1992 to October 19, 1992 and during October, 1992 this was his third visit. He also deposed that he had brought gold from abroad and in the present case he brought the gold to India to earn profit and that the profit was not to be shared with Shri Illiyas Patel or Smt. Laly and their family and he was to remove the gold from Mumbai Airport for further disposal and sale in the Mumbai market. The Department carried out further investigation in the matter and show -cause notice was issued for confiscation of the gold and currency and for penal action against the appellant, Shri Illiyas Patel, Smt. Memuda I. Patel, Smt. Munira M. Laly and her two minor sons. In his adjudication order dated June 24, 1996 the learned Collector of Customs ordered confiscation of the gold along with foreign currency and imposed penalty of Rs. 50 lakhs against the appellant and other co -notices were exonerated. The said order -in -original was challenged by the appellant by way of Writ Petition No. 2436/1994. The hon'ble High Court in their order dated October 24, 1994 directed the Collector of Customs to decide the case afresh. The Commissioner of Customs in fresh adjudication vide his order dated May 30, 1996 ordered absolute confiscation of 25 kgs. of gold and the foreign currency and imposed penalty of Rs. 50 lakhs against the appellant. The appellant preferred an appeal before this Tribunal against the impugned Order. Vide Order No. C -I/1995/WEB -2001, dated August 1, 2001, the Tribunal allowed the redemption of gold for export on payment of fine of Rs. 10 lakhs; the penalty imposed on the appellant was reduced to Rs. 5 lakhs and confiscation of foreign currency from the appellant was set aside and allowed to be re -exported in accordance with law. Aggrieved by this, the Department filed Reference Application No. 17 of 2001 before the hon'ble High Court raising certain important questions of law. The Tribunal vide its Order No. C -I/1746/01 -WZB, dated July 13, 2001 in an application filed by the appellant directed the Department to implement its earlier order dated November 9, 2000. In subsequent Order No. C -I/1995/WZB/2001, dated August 1, 2001, the Tribunal directed the Department to release the sale proceeds of the confiscated gold after deducting a sum of Rs. 10 lakhs. On not being successful, the appellant moved the hon'ble High Court and the hon'ble High Court in Writ Petition No. 2371 of 2001 vide its order dated October 9, 2001 directed the Department to implement the order of the Tribunal within four weeks unless stay was obtained from the Tribunal. The Department accordingly preferred a stay application before the Tribunal staying its order dated November 9, 2000, July 13, 2000, August 1, 2001 and January 21, 2002 pending reference application before the hon'ble High Court. The Tribunal rejected the stay application and directed the Department to comply with its earlier order. Thereby, the Department again filed a notice of motion before the hon'ble High Court. The hon'ble High Court did not grant any relief on the notice of motion, however, permitted certain amendments as prayed by the Department's counsel. The Department carried out the said amendment and Writ Petition No. 1802/2002 was filed by the Department in the hon'ble High Court. The hon'ble High Court vide its order dated November 27, 2001 set aside the order of the Tribunal impugned in Writ Petition No. 1802/2002 as also refund order -cum -demand notice dated March 6 impugned in Writ Petition No. 1443/2002 and directed the Tribunal to de novo hear and adjudicate upon the issues arising out of the aforesaid order.

(3.) THE learned senior Departmental representative reiterated the findings of the adjudicating authority. The contention of the Department is that the absolute confiscation of the gold is sustainable since the gold is a prohibited item. The contention is that the appellant has never claimed to be the owner of the gold therefore, the gold cannot be redeemed to him. The contention is that on redemption the duty has to be paid. The Department also placed reliance on the following case law: