[Order per : B.S.V. Murthy, Member (T)]. - When this Stay Petition was called on 5-7-2012, an observation was made that the appeal itself may not be maintainable before the Tribunal in view of the fact that the issue is related to non-declaration of gold in the baggage of the passenger and according to the proviso to Section 129A of Customs Act, 1962, the appeal cannot be filed before this Tribunal. Ld. Counsel submitted that according to him, the appeal shall lie to the Tribunal only and sought time to present detailed argument. Accordingly, the matter was adjourned and was taken up today.

2. Ld. Advocate on behalf of the appellant submitted that in the case of M. Ambalal & Co. - (S.C.), the Hon’ble Supreme Court had distinguished between the imported goods and smuggled goods. It is his submission that following the decision of Hon’ble Supreme Court, the goods in this case, come under the category of smuggled goods and not imported goods. According to Section 129A, the Tribunal has no jurisdiction only when the goods are imported as passenger baggage. The second submission he would like to make is that according to Foreign Trade Policy, only bona fide household goods and personal effects may be imported as a part of passenger baggage and further declaration is also required to be filed. Since no declaration was filed in this case, the goods cannot be considered to have been imported goods at all and they have to be considered as smuggled goods. Further, the ld. Advocate also relied upon the definition of the ‘goods’ under Section 2(22) of Customs Act, 1962, according to which the goods includes baggage also. Therefore, the expression ‘imported goods’ would include the imported baggage also and therefore once the goods are not imported goods but smuggled goods, in the case of smuggled goods the Tribunal will have jurisdiction. Further, he also relied upon the decision of the Sapna Sanjeev Kohli - (Tri.-Mum.), where the Tribunal has considered the case of confiscation of gold jewellery and foreign currency from the passenger. The matter had travelled upto Hon’ble Supreme Court and nowhere the jurisdiction of the Tribunal was questioned.

3. Ld. AR would submit that in this case, the passenger had come from abroad and within the Customs area i.e. airport, the seizure was effected on the ground that the appellant failed to declare the goods and therefore no appeal lies against the Order-in-Appeal impugned in this case.

4. We have considered the submissions made by both sides.

5. The Foreign Trade Policy, 2009-2014 provides that the bona fide household goods and personal effects may be imported as a part of passenger baggage as per limit, terms & conditions thereof in baggage rules notified by Ministry of Finance. Further, the Foreign Trade Policy also required a passenger to give a declaration. According to Section 2(3) of Customs Act, 1962, ‘baggage’ includes unaccompanied baggage but does not include the motor vehicle. Reading of the definition of the ‘baggage’ under Customs Act, 1962 and provisions of Foreign Trade Policy would clearly show that the baggage can consist of any item except motor vehicles. Assessment of baggage as per Foreign Trade Policy is subject to the terms and conditions and limits as per the baggage rules. Section 78 of Customs Act, 1962 requires the passenger to give a declaration and the declaration under Section 77 of Customs Act, 1962 provides that the owner of any baggage for the purpose of clearances has to make a declaration of his contents to the proper officer. The sum and substance of the provisions discussed above is that a passenger is required to bring bona fide household articles which will be allowed as per the terms and conditions in the baggage rules and in the case of goods imported as baggage, the provisions of Section 77 would apply which provides that the declaration of baggage to the proper officer is enough.

6. The contention of the ld. Counsel was that these are smuggled goods and therefore cannot be called as imported goods at all and only in the case of imported goods, imported as baggage, the Tribunal has no jurisdiction. According to Section 2(25) of Customs Act, 1962, ‘imported goods’ means any goods brought into India from a place outside India but does not include the goods which have been cleared for home consumption. According to the definition of the ‘goods’ as already mentioned above, the baggage forms part of the goods. When we read these two definitions together, what emerges is that when the goods are brought into India from a place outside India (in this case, baggage) till they are cleared for home consumption, they are considered as imported goods. In this case, before the clearance has taken place from the airport, the goods have been seized. The definition of the importer also provides that the person is considered to be importer till the goods are cleared for home consumption and when he holds himself to be an importer or the owner of the goods. In terms of above provisions, it becomes quite clear that in this case, whatever is brought by a passenger from abroad is considered as baggage and the passenger is required to make a declaration under Section 77 and till the goods are declared and cleared from Customs area (airport) after declaration, the goods remain imported goods and the person remains the importer. Going by this analogy also, the goods in this case can be considered as imported goods only and as already mentioned earlier, Section 129A provides that the Tribunal has no jurisdiction in respect of any goods imported or exported as baggage.

7. Ld. Counsel would try to convince us that the goods, if they are not declared, become smuggled goods. However, the definition of imported goods would clearly show that so long as the goods are pending clearance by Customs from Customs area, they remain imported goods. Only when they are brought out of the Customs area without payment of duty and if they are seized outside Customs area, they become smuggled goods. The observations of Hon’ble Supreme Court in Para 7 of the judgment in the case of M. Ambalal & Co. also would support the conclusion reached above, which is reproduced below.

“7. Dutiable goods are goods whose import is permitted by the Act or any other law in force. Duty is the tax leviable on the goods occasioned by their import into India or their export out of India. The dutiability of the goods is covered by Section 12 of the Act which is the charging section. Under this Section, all goods imported into or exported from India are liable to Customs duty unless the Customs Act itself or any other law for the time being in force provides otherwise. The rate of duty is fixed by the Customs Tariff Act, 1975. “Import” and “Imported Goods” means that if goods are brought into India, meaning thereby into the territory of India from outside, there is import of goods and the goods become imported goods and become chargeable to duty upto the moment they are cleared for home consumption. The word ‘importer’ has been defined in the Act as importer in relation to any goods at any time between their importation and the time when they are cleared for home consumption includes any owner or any person who holding himself out to be importer. The word ‘smuggling’, in relation to goods, means any act or omission which will render such goods liable to confiscation under Section 111 or Section 113 of the Act.”

8. Further, the Hon’ble Supreme Court has remanded the matter to the Tribunal in the case of M. Ambalal & Co. and the Tribunal has passed an order on remand by Hon’ble Supreme Court as reported in (Tri.-Mum.). In the case of M. Ambalal & Co., the Revenue wanted to charge the duty on the goods considering them as baggage. The Tribunal has denied it on the ground that the seizure had not taken place in the Customs area but outside the Customs area and the Revenue has no evidence to show that the goods have been brought as baggage. The observations of the Tribunal in a portion of Paragraph 5.5 is relevant and is reproduced below.

“5.5 ………Secondly, there is no evidence that the goods have been imported by passengers in their baggage except for a statement given by the appellant which is not conclusive to say that the goods have been actually imported as passenger’s baggage. Further as per the said statement - “diamonds used to be imported/smuggled personally or through carriers by air and by other means”. Since the appellants failed to declare those ‘other means’, the adjudicating authority took the view that all the diamonds under seizure were imported personally in baggage or through carriers and therefore the goods could be charged to duty at the baggage rate. This is only a hearsay evidence and in our view cannot be taken as a basis for classification of goods as baggage. Further the seizure has not taken place in a customs area at all so as to have a reasonable presumption that it could have been brought in the baggage. Besides, there is no declaration filed in respect of such baggage to apply the rate of duty applicable to baggage on the impugned goods under Section 78 read with Section 77 of the Customs Act. In view of this, the claim of the department to levy duty under Chapter Heading No. 98.03 does not have sufficient legal basis and we hold accordingly. The question would then arise what would be the relevant classification for the purpose of levy in the instant case. “Diamonds, whether or not worked, but not mounted or set” fall under Heading No. 71.02 of the Customs Tariff. Since the goods under seizure are rough as well as cut and polished diamonds, they would be correctly classifiable under Heading No. 71.02 of the Customs Tariff for the purpose of levy and we hold accordingly.”

9. The observations reproduced above would clearly show that if the goods have been brought as baggage, they have to be treated as baggage only. This decision clearly provides that only when the goods are not brought as baggage, the other methods of assessment can be considered. In that case, it was held that the goods were not brought as baggage and therefore the Department should not levy tax treating diamonds as part of baggage. In this case, there is no dispute at all that the gold jewellery was brought as a part of baggage and not declared and therefore they remained imported goods since they were not cleared out of the Customs area on payment of duty nor were they smuggled out of Customs area to become smuggled goods without evidence put forth to show that they were a part of baggage.

10. Under these circumstances, it is quite clear that the submissions made by ld. Counsel that the Tribunal has jurisdiction, cannot be accepted.

11. As regards the decision of the Tribunal cited above by ld. Counsel, the same cannot be applied to the facts of the case since the impugned order was passed by Commissioner and not Commissioner (Appeals) and Tribunal has jurisdiction.

12. Since the detailed submissions were made about maintainability and appeal is found to be not maintainable, there is no need for considering the Stay Petition at this stage and postpone the final hearing to a later stage. In view of the above discussion, the appeal has to be rejected as not maintainable and is accordingly rejected and since the jurisdiction lies with Government of India, the Registry is directed to transfer the file to Government of India for necessary action.

(Operative portion of the order pronounced in Court)