Tribunal overturns confiscation order for sugar & bags, ruling penalties illegal due to lack of evidence.

The Tribunal set aside the Order-in-Original confiscating sugar and empty bags, ruling penalties imposed on appellants were illegal due to lack of evidence supporting illegal export claims. The Tribunal found no concrete evidence of illegal export attempts, citing lack of admissible evidence and legal acquisition efforts. Confiscation of empty bags under Section 118(b) was deemed inappropriate. Consequently, the appeals were allowed, and the original order was set aside, providing relief to the appellants.

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Issues Involved:
1. Confiscation of sugar and empty bags.
2. Alleged intention for illegal export of sugar to Bangladesh.
3. Legality of penalties imposed on the appellants.
4. Applicability of Section 118(b) of the Customs Act, 1962 for confiscation of empty bags.

Detailed Analysis:

1. Confiscation of Sugar and Empty Bags:
The appellants challenged the Order-in-Original No. 26/Cus/CC(P)/WB/2007 dated 30.11.2007, which confiscated 1866 quintals of sugar and 279 empty bags. The sugar was valued at Rs. 25,21,860/- and was allowed redemption upon payment of a Rs. 20 lakh fine. The confiscation was under Sections 113(c), (d), and (f) of the Customs Act, 1962, read with Section 11 of the Customs Act, 1962 and Foreign Trade (Regulation) Rules, 1983. Penalties of Rs. 5 lakh were imposed on M/s. Laxmi Narayan Udyog Pvt. Ltd. and Rs. 2 lakh each on its director and another individual under Section 114 of the Customs Act, 1962.

2. Alleged Intention for Illegal Export of Sugar to Bangladesh:
The Revenue's case was based on the voluntary statement of Shri Yunus Mondal, who was apprehended by BSF in another case. However, no such statement was on record in this case. The adjudicating authority's decision relied on presumptions and hearsay evidence, which is not admissible as per established case laws, including:
- Oudh Sugar Mills Ltd. vs. UOI.
- State of Kerala vs. M.M. Mathew.
- A.K. Saba vs. Commissioner.

The appellants argued that the sugar was meant for legal export, and they had been seeking necessary permissions since April 2006, before the restrictions imposed by the Ministry of Consumer Affairs on 10.05.2006. The Tribunal found no evidence of an illegal export attempt, as the sugar was stored in godowns, and the appellants had documentary evidence of legal acquisition and efforts to obtain export permissions.

3. Legality of Penalties Imposed on the Appellants:
The Tribunal noted that the statements of the appellants did not indicate any intention for illegal export. The existence of a demand draft in favor of M/s. Balrampur Chini Mills Ltd. further supported the claim of legal acquisition. The Tribunal referred to the case of Babban Khan vs. Collector of Customs (Preventive), where it was held that mere preparation does not constitute an attempt to commit an offense. The Hon’ble Supreme Court in State of Maharashtra vs. Mohd. Yakub and Others clarified that an attempt requires a proximate act towards the commission of the offense, which was not present in this case.

4. Applicability of Section 118(b) of the Customs Act, 1962 for Confiscation of Empty Bags:
Section 118(b) pertains to the confiscation of packages and their contents brought within a customs area for export. In this case, the empty bags were neither in packages nor brought into a customs area for export. Therefore, the confiscation of empty bags under Section 118(b) was deemed inappropriate and set aside.

Conclusion:
The Tribunal found no merit in the confiscation of sugar and the imposition of penalties. The entire case of the Revenue was based on presumptions and lacked concrete evidence. The confiscation of empty bags was also found to be legally unsustainable. Consequently, the appeals were allowed, and the Order-in-Original dated 30.11.2007 was set aside with consequential relief to the appellants.

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