2007 (9) TMI 472 - AT - Customs

Tribunal Upholds Confiscation of Goods, Reverses Penalties Due to Lack of Evidence

The Tribunal upheld the confiscation of 600 cartons of bricks and 190 cartons of stainless steel utensils but set aside the confiscation of 950 cartons ... Confiscation and redemption fine - Penalty - DFRC Scheme - Evidence - Offence Issues Involved:1. Alleged substitution of export goods with bricks.2. Confiscation of goods and imposition of penalties.3. Appellant's knowledge and involvement in the fraud.Summary of Judgment:1. Alleged Substitution of Export Goods with Bricks:The case involved the live seizure of factory-stuffed export goods at the port and another seizure at the factory premises. It was alleged that the exporter attempted to substitute stainless steel utensils with bricks of no commercial value to fraudulently avail benefits under the Duty Free Replacement Certificate (DFRC) Scheme. The goods were manufactured and stuffed by M/s. Rajguru Impex India Pvt. Ltd., managed by the Appellant, who filed two shipping bills for export under the DFRC Scheme.2. Confiscation of Goods and Imposition of Penalties:Based on specific information, the containers were examined, revealing that 600 cartons of bricks were substituted for stainless steel utensils. A Show Cause Notice was issued proposing confiscation of the seized goods and penalties u/s 114(iii) of the Customs Act, 1962. The Commissioner confiscated the goods u/s 113(d), (h), (i) of the Customs Act, 1962, and imposed penalties on the Appellant and other involved parties. However, the Commissioner allowed the redemption of goods except for the bricks on payment of a fine.3. Appellant's Knowledge and Involvement in the Fraud:The Appellant denied knowledge of the fraud, attributing the substitution to an employee, Shri Bhurra Ram Narayanji Vishnoi, who confessed to the act. The statements of employees and excise officials did not implicate the Appellant in the illegal act. The Tribunal noted the Appellant's past clean record and the absence of evidence showing conscious knowledge or mens rea. The Tribunal found that the substitution of 600 cartons of bricks was not conclusively proven to involve the Appellant.Conclusion:The Tribunal upheld the confiscation of 600 cartons of bricks and 190 cartons of stainless steel utensils but set aside the confiscation of 950 cartons found in the labourer's room, as they were not brought into the customs area. The penalties imposed on the Appellant and other parties were set aside due to the lack of evidence proving their involvement in the fraud. The appeals were allowed accordingly.