2016 (5) TMI 175 - AT - Customs

Tribunal Upholds Penalties & Confiscation, Reduces Redemption Fine for Smuggling Offenses

The tribunal upheld penalties and vehicle confiscation under Sections 112 and 115 of the Customs Act, 1962, due to strong evidence of smuggling ... Imposition of penalties and confiscation of goods in lieu of redemption fine - Seizure of 13 vehicles - Smuggling of Betel Nuts of third country origin and Garlic of Chinese origin goods from Nepal into India - Held that:- there is no retraction of a confession statement. Appellants never asked for cross-examination of witnesses. None of the persons came forward to claim the ownership of seized goods of more than ₹ 2.00 Crore in value. The act of running away of Drivers from the place of interception is not disputed by Appellants. It cannot be imagined that the drivers who ran away would not have informed the masters that goods/trucks have been detained by some agency. There is thus a plethora of circumstantial evidences corroborating the relied upon statements of drivers and khalasi. As per Section 115 of the Customs Act, 1962 a driver has to be considered as an agent of the owner and accordingly knowledge of the drivers will have to be considered as the knowledge of the owners of vehicles. The argument of appellant that in the absence of test report of the samples sent, it cannot be said that the seized goods were of foreign origin and that even the department was not sure of that nature, can be taken by the owner of goods who produces some documents of licit acquisition of seized goods. Adjudicating authority has given a logical findings that Garlic of Chinese origin can be easily identified by its size. It is also a common experience that in Indian markets Garlic of Chinese origin is easily recognized from indigenous Garlic by its size. However, in the case of Appellants awaiting the reports of testing agencies are not relevant when the drivers/khalasi are themselves confessing to the fact that seized goods were brought from Nepal for the lure of money. Therefore, the penalties imposed upon the appellants and confiscation of vehicles under Section 115 of the Customs Act, 1962 are also upheld. Quantum of redemption fine - imposed upon the vehicles of the owners of the vehicles - Appellant contended that value of seizure is arbitrary and the quantum of redemption fine, nearly 50% of seized value, is very high - Held that:- there is substance in the argument of owner appellants that over the period the seized/confiscated vehicles must have deteriorated and that some of the vehicles have been disposed of without giving any intimation to the owners. It is observed that redemption fine imposed is nearly 50% of the seizure value of vehicles determined on 02.10.2009 which must have further depreciated till the date of adjudication. Therefore, imposing a redemption fine of nearly 50% of the seizure value of vehicles is excessive. In the interest of justice it will be appropriate to restrict the redemption fine to the extent of 25% of the auction price where vehicles have been disposed of by the Revenue in auction. Same ratio of seizure value vs. auction price of auctioned vehicles can be taken for the purposes of imposing redemption fine on vehicles released provisionally. - Decided partly in favour of appellant Issues Involved:1. Penalties imposed under Section 112 of the Customs Act, 1962.2. Confiscation of vehicles under Section 115 of the Customs Act, 1962.3. Quantum of redemption fine imposed on the vehicles.Detailed Analysis:1. Penalties Imposed Under Section 112 of the Customs Act, 1962:The appellants, comprising drivers, owners, and a khalasi of 13 vehicles, were penalized for carrying goods suspected to be smuggled from Nepal. The DRI officers, acting on specific information, intercepted the vehicles loaded with betel nuts and garlic. Statements from drivers and khalasi confirmed the goods were loaded in Nepal and transported using fake registration plates. The appellants argued that the evidence was insufficient to prove the foreign origin of the goods and that there was no proof of the owners' knowledge of the smuggled nature of the goods. However, the tribunal found that the statements were not retracted and no cross-examination was sought. The circumstantial evidence, including the drivers' actions and communication records, supported the smuggling charges. Thus, the penalties imposed were upheld.2. Confiscation of Vehicles Under Section 115 of the Customs Act, 1962:The vehicles were confiscated based on the reasonable belief that they were used for smuggling. The owners did not report the missing vehicles or file FIRs, suggesting their awareness of the smuggling activities. The tribunal noted that the owners' delayed response and lack of inquiry into the whereabouts of their vehicles indicated their knowledge of the illegal activities. The tribunal upheld the confiscation, citing the drivers' statements and the circumstantial evidence as sufficient proof of smuggling.3. Quantum of Redemption Fine Imposed on the Vehicles:The appellants contended that the redemption fine, set at nearly 50% of the seizure value, was excessive and that the vehicles had deteriorated over time. The tribunal agreed that the fine was high, considering the depreciation of the vehicles. It was decided to reduce the redemption fine to 25% of the auction price for the vehicles sold by the department and apply the same ratio for the vehicles released provisionally. This adjustment aimed to balance the interests of justice and the appellants' financial burden.Conclusion:The tribunal upheld the penalties and confiscation of the vehicles, emphasizing the corroborative evidence and the appellants' lack of credible defense. However, it reduced the redemption fine to a more reasonable level, considering the depreciation of the vehicles. The appeals were allowed only to the extent of adjusting the redemption fine.