The expression "goods in respect of which any prohibition is in force" in Section 112 of the Customs Act, 1962, should be strictly construed and confined to goods expressly prohibited from being imported into the country.

Sanjib Banerjee, J.

The petitions involve a common issue and pertain to the same order of November 24, 2015.

2. Though the petitions carried prayers challenging the constitutionality of amended Section 129E of the Customs Act, 1962, such challenge has been expressly abandoned at this stage on the ground that the petitions can be pursued otherwise since the order impugned is without jurisdiction.

3. By the common order of November 24, 2015, the Commissioner of Customs (Preventive) has imposed “exemplary penalty” of Rs. 10,07,00,000/- in case of either petitioner. The petitioner in the first matter has been found to be “the mastermind and king pin of the instant smuggling operation” and the petitioner in the second matter has been found to be “the principal accomplice of” the other petitioner.

4. The penalty in either case has been imposed under Section 112 of the said Act for improper importation of gold bars of foreign origin. The penalty that has been levied on the petitioners is on the basis of a clause in the relevant provision that permits “a penalty not exceeding the value of the goods or five thousand rupees, whichever is greater” to be imposed for improperly bringing into the country “goods in respect of which any prohibition is in force under this Act or any other law for the time being in force”.

5. The question of law that has been urged is as to whether the expression “goods in respect of which any prohibition is in force” implies goods which have been specifically barred from being brought into the country and not the smuggling of any goods into the country which may otherwise have been brought into the country by the appropriate channel upon payment of due duty thereon. In such view of the matter the facts are not really relevant, except to appreciate how the legal issue arises in the context thereof.

6. It is the allegation of the Customs authorities that the Directorate of Revenue Intelligence had specific intelligence input that nine Bongaon residents would carry smuggled gold from Bongaon to Kolkata on April 8, 2013. According to such information, the smuggled gold was to be collected from the petitioner in the second matter to be delivered to the petitioner in the first matter in Kolkata.

7. In course of the search and seizure operations carried out on the nine carriers, 272 rectangular-shaped gold bars weighing 36.856 kg were recovered from such persons and the materials were seized on the belief that they were illegally imported into the country from Bangladesh and were liable for confiscation under Section 111 of the Act. All nine persons, from whose possession the gold was recovered, were examined under Section 108 of the Act and, on the basis of their statements, it was perceived that the two key players were the two petitioners herein. The petitioner in the first matter was also examined but the petitioner in the second matter did not respond to the several summons issued to him.

8. The facts are not much in dispute and the findings rendered in course of the order of adjudication as to the culpability of these petitioners have not been questioned. The only ground urged is that the penalty imposed on either petitioner on the basis of the value of the smuggled gold could not have been made as gold is not a prohibited item nor is the import thereof prohibited by virtue of any notification or order under the Act of 1962 or any other law for the time being in force. The petitioners assert that only the duty that may have been sought to be evaded on these smuggled goods could have been made the basis of assessing the penalty liable to be imposed on the petitioners; and the petitions have been heard only on such limited aspect without calling for any affidavit from the Customs authorities.

9. It is imperative to notice Section 112 of the Act at the outset to consider whether the penalty imposed on either petitioner is in accordance therewith :

“112. Penalty for improper importation of goods, etc. - Any person, -

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