2006 (11) TMI 70 - AT - Customs

Tribunal overturns penalty in Customs Act case citing lack of evidence, aligns with judicial findings

The Tribunal allowed the appeal, setting aside the penalty imposed on the appellant under Section 114(i) of the Customs Act. The decision was based on the ... Penalty – Alleged that appellant were engage in the smuggling of musical instruments made of redsanders and accordingly penalty were imposed on him- After assessing the evidence HC discharged the appellant as not guilty of the offences Issues Involved:1. Legitimacy of the penalty imposed on the appellant under Section 114(i) of the Customs Act.2. Validity of the evidence used to implicate the appellant.3. Relevance of the appellant's past transactions to the current case.4. Impact of the High Court's findings on the departmental proceedings.Issue-wise Detailed Analysis:1. Legitimacy of the Penalty Imposed on the Appellant Under Section 114(i) of the Customs Act:The Commissioner of Customs imposed a penalty of Rs. 5 lakhs on the appellant under Section 114(i) of the Customs Act, based on the appellant's alleged involvement in the conspiracy to smuggle sandalwood, peacock feathers, and mica powder. The appellant contested this penalty, arguing that there was no evidence to support the allegations and that he had no connection with the seized containers or the individuals involved in the smuggling attempt. The Tribunal, considering the High Court's findings, concluded that the penalty was not sustainable as the evidence did not satisfactorily implicate the appellant.2. Validity of the Evidence Used to Implicate the Appellant:The evidence against the appellant included statements from various individuals, a handwritten account of musical instrument parts, and a slip of paper allegedly linking the appellant to the contraband. The appellant retracted his earlier statements and argued that the evidence was either exculpatory or insufficient to prove his involvement. The High Court found that the statements from other accused did not implicate the appellant significantly and that the slip of paper was not in the appellant's handwriting. The Tribunal agreed, noting that the same evidence had been considered by the High Court, which found no prima facie case against the appellant.3. Relevance of the Appellant's Past Transactions to the Current Case:The Commissioner of Customs relied on the appellant's past transactions involving red sanders to support the allegations. However, the appellant argued that past transactions should not be the basis for the current charges, especially when they were unrelated to the seized contraband. The Tribunal found merit in this argument, noting that the past transactions were not relevant to the current proceedings and that the evidence only raised suspicion rather than proving guilt.4. Impact of the High Court's Findings on the Departmental Proceedings:The High Court had discharged the appellant under Section 239 of Cr.PC, finding no material to make out a prima facie case against him. The Tribunal considered this discharge significant, noting that the High Court's findings were based on the same evidence used in the departmental proceedings. The Tribunal referred to the Supreme Court's decision in Union of India v. Prafulla Kumar, which held that if evidence raises only some suspicion but not grave suspicion, the accused should be discharged. The Tribunal also cited the Supreme Court's ruling in Captain M. Paul Anthony v. Bharat Gold Mines Ltd., which stated that departmental proceedings should not stand if the accused is acquitted in a criminal case on the same facts and evidence. Consequently, the Tribunal concluded that the impugned order was not sustainable and allowed the appeal.Conclusion:The Tribunal allowed the appeal, setting aside the penalty imposed on the appellant. The decision was based on the High Court's findings, which exonerated the appellant, and the lack of substantial evidence to prove his involvement in the smuggling attempt. The Tribunal emphasized the principle that departmental proceedings should not contradict judicial findings based on the same set of facts and evidence.