2014 (8) TMI 126 - AT - Customs

Tribunal upholds penalty under Customs Act for smuggling, appellant's awareness of contraband goods crucial.

Mr. Yakub Ishaq Gandhar Versus CC Jamnagar

The Tribunal upheld the penalty imposed on the appellant under Section 114(i) of the Customs Act, 1962, dismissing the appeal. The appellant's awareness ... Penalty u/s 114 - lack of knowledge of contraband article - Whether penalty under Section 114(i) of the Customs Act, 1962 is imposable upon the appellant - Held that:- appellant was well aware of the fact the Red Sanders wood was loaded on to the Vessel MSV Ramban at Veraval which was subsequently towed to Gulf countries and also that he was aware of the fact that taking out Red Sanders wood from a port in India to a place outside India was not permitted. He was also aware that such wood was not to be declared to the Customs. The statements of the appellant recorded by the investigation were never retracted but have also been corroborated by the other statements. In the case of smuggling and clandestine activities under the Customs Act it is difficult to expect that other documentary evidences will be created by the persons involved and in such cases only corroborative statements have to be relied upon. In view of the above observations, appellant does not have a case and penalty was correctly imposed by the adjudicating authority - decided against assessee. Issues:- Imposition of penalty under Section 114(i) of the Customs Act, 1962 on the appellant.Analysis:1. The appellant filed an appeal against a penalty of Rs. 1.5 lakhs imposed under Section 114(i) of the Customs Act, 1962. The appellant was ordered to pre-deposit Rs. 15,000 as per a Stay Order. The appellant, represented by Shri R. Subramanya, argued that they were not aware of the contraband nature of goods found on Vessel MSV Ramban, emphasizing the lack of independent evidence supporting the allegations. The allegations were primarily based on statements from individuals associated with the vessel.2. On the other hand, Shri Manoj Kutty, representing the Revenue, highlighted statements recorded from the appellant and others, indicating the appellant's awareness of the contraband nature of Red Sanders wood found on the vessel. The Revenue argued that the penalty was rightfully imposed on the appellant based on these statements and their non-retraction.3. The key issue in this case was whether the penalty under Section 114(i) of the Customs Act, 1962 was justified. The appellant's role, as detailed in the show cause notice, revealed their knowledge of the presence of Red Sanders wood on Vessel MSV Ramban and their awareness of the legal restrictions regarding exporting such goods from India without declaration to Customs. The appellant's statements, supported by other corroborative statements, indicated their involvement in the smuggling activity.4. The Tribunal, after hearing both sides and examining the case records, concluded that the appellant was well aware of the presence of Red Sanders wood on the vessel and the illegal nature of exporting it without proper declaration. The appellant's statements were deemed credible and not retracted, with no additional documentary evidence expected in cases of smuggling. Therefore, the penalty imposed on the appellant was upheld, and the appeal was dismissed.5. In the final judgment, the Tribunal ruled to dismiss the appeal filed by the appellant, affirming the imposition of the penalty under Section 114(i) of the Customs Act, 1962. The operative portion of the order was pronounced in court, finalizing the decision in the case.