1984 (5) TMI 252 - AT - Customs

Tribunal upholds penalty under Customs Act for involvement in clearing incriminating briefcase, sets aside penalty for lack of direct evidence.

The Tribunal upheld the penalty of Rs. 1 lakh on Appellant No. 1 under Section 114 of the Customs Act, citing sufficient evidence of involvement in ... - Issues Involved:1. Imposition of penalty under Section 114 of the Customs Act.2. Vagueness of the show cause notice.3. Classification of foreign currencies as goods under the Customs Act.4. Applicability of Section 13(2) of FERA 1973 read with Notification dated 1-1-1974 under Section 11 of the Customs Act.5. Legality of actions taken without a notification under Section 11 of the Customs Act.6. Applicability of penal provisions of Section 114 to FERA offences.7. Establishment of wilful or criminal intent for penalty under Section 114.8. Evaluation of evidence on record.9. Onus or burden of proof on the Customs authorities.10. Weight of evidence and correctness of the order.11. Evidence of conspiracy and abetment.Issue-wise Detailed Analysis:1. Imposition of Penalty under Section 114 of the Customs Act:The Additional Collector imposed a penalty of Rs. 1 lakh on Appellant No. 1 and Rs. 10,000 on Appellant No. 2 under Section 114. The Tribunal upheld the penalty on Appellant No. 1, finding enough evidence to support the allegation that the incriminating briefcase was cleared through Customs by Appellant No. 1 and was recovered from his possession. However, the penalty on Appellant No. 2 was set aside due to lack of evidence of direct knowledge, possession, or custody of the incriminating foreign currency.2. Vagueness of the Show Cause Notice:Appellant No. 1 argued that the show cause notice was vague and did not clearly indicate the offence. However, the Tribunal found that the notice sufficiently detailed the alleged violations and the basis for the charges.3. Classification of Foreign Currencies as Goods under the Customs Act:Appellant No. 1 contended that foreign currencies are not goods for the purposes of the Customs Act. The Tribunal rejected this argument, stating that the restrictions imposed by or under Section 13 of FERA are deemed to be imposed under Section 11 of the Customs Act, thereby attracting the penal provisions of Section 113 of the Customs Act.4. Applicability of Section 13(2) of FERA 1973 Read with Notification Dated 1-1-1974 under Section 11 of the Customs Act:The Tribunal held that the restriction under Section 13(2) of FERA, read with the Notification dated 1-1-1974, is deemed to have been imposed under Section 11 of the Customs Act. This interpretation was supported by Section 67 of FERA, which states that restrictions under Section 13 shall be deemed to be under Section 11 of the Customs Act.5. Legality of Actions Taken Without a Notification under Section 11 of the Customs Act:The Tribunal found that the absence of a notification under Section 11 of the Customs Act does not invalidate the actions taken. Section 67 of FERA provides that restrictions under Section 13 are deemed to be under Section 11 of the Customs Act, thereby conferring jurisdiction on Customs authorities.6. Applicability of Penal Provisions of Section 114 to FERA Offences:The Tribunal rejected the contention that penal provisions of Section 114 are not applicable to FERA offences. Section 67 of FERA makes all other provisions of the Customs Act applicable to contraventions of Sections 13, 18(1)(a), and 19(1)(a) of FERA.7. Establishment of Wilful or Criminal Intent for Penalty under Section 114:The Tribunal found that the evidence against Appellant No. 1, including his own statements and those of his co-accused, sufficiently established wilful and criminal intent. However, for Appellant No. 2, there was no evidence of wilful participation or prior knowledge of the concealed currency.8. Evaluation of Evidence on Record:The Tribunal thoroughly evaluated the evidence, including statements made under Section 108 of the Customs Act and other circumstantial evidence. It found that the evidence against Appellant No. 1 was compelling, while the evidence against Appellant No. 2 was insufficient to establish guilt.9. Onus or Burden of Proof on the Customs Authorities:The Tribunal held that the onus of proving licit possession and producing a permit for export was on Appellant No. 1, given the concealed nature of the foreign currency. Appellant No. 1 failed to discharge this burden.10. Weight of Evidence and Correctness of the Order:The Tribunal found that the order against Appellant No. 1 was supported by substantial evidence and was not against the weight of evidence. However, the order against Appellant No. 2 was based on suspicion and lacked corroborative evidence, leading to its reversal.11. Evidence of Conspiracy and Abetment:The Tribunal found no evidence of conspiracy between the appellants. While there was suspicion against Appellant No. 2, it did not amount to legal evidence. The Tribunal accepted the explanation that Appellant No. 2 was merely assisting Appellant No. 1 due to his ill health and set aside the penalty on Appellant No. 2.Conclusion:The Tribunal confirmed the penalty on Appellant No. 1 and set aside the penalty on Appellant No. 2. The legal contentions raised by Appellant No. 1 were rejected, and the actions taken by Customs authorities were held to be valid under the provisions of the Customs Act and FERA.