2016 (12) TMI 968 - AT - Customs

Tribunal overturns penalty under Customs Act due to lack of evidence on appellant's knowledge.

M/s. Ana Jamil Versus Commissioner, Customs (Prev.), Shillong

The Tribunal allowed the appeal, finding the penalty under Section 112(b) of the Customs Act, 1962 unjustified as there was no evidence proving the ... Seizure - Smuggling - Penalty - Held that: - It is observed from the case records that there is no evidence on record as to how the seized goods are smuggled, by whom, and from which route these goods were brought into India. Seized goods are not one of the categories of goods appearing in Section 123 or which are notified under Section 123 of the Customs Act, 1962. The burden is on the department to lead evidence that goods of foreign origin are in fact smuggled. Simply, bearing some foreign marks does not mean that goods are smuggled ones. There is even no evidence on record that appellant was aware of the foreign origin of goods, much less knowledge of being smuggled. Knowledge of goods being of smuggled nature is an essential element for imposing penalty under Section 112(b) of the Customs Act, 1962. In the absence of such a knowledge of the appellant, who is a housewife, no penalty can be imposed upon her under Section 112(b) of the Customs Act, 1962 - appeal allowed - decided in favor of appellant. Issues:- Imposition of penalty under Section 112(b) of the Customs Act, 1962 based on the ownership and knowledge of seized goods.Analysis:1. The appellant filed an appeal against the Order-in-Appeal upholding a penalty imposed under Section 112(b) of the Customs Act, 1962. The appellant argued that as an Air Cargo Agent, they were not the owner of the seized goods and had no knowledge of the contents of the packages. It was contended that being a housewife, the clerical employees handled all paperwork, and obtaining the address of the concerned person did not make them liable for penalty.2. The Revenue argued that the seized goods were of Chinese origin and included electronic goods, mobile phones, and other items. It was highlighted that the appellant failed to provide complete addresses of shippers and consignees, and was evasive during the investigation. The Revenue asserted that the appellant's conduct indicated abetment, justifying the penalty imposed by the Adjudicating Authority and upheld by the First Appellate Authority.3. The key issue was whether the penalty under Section 112(b) of the Customs Act, 1962 was correctly imposed on the appellant. The Tribunal noted that there was no evidence on record to prove that the seized goods were smuggled or that the appellant was aware of their foreign origin. The burden of proof lies on the department to establish that the goods are smuggled, and mere foreign marks do not suffice. As the appellant, a housewife, lacked knowledge of the goods being smuggled, the penalty under Section 112(b) could not be justified.4. Ultimately, the Tribunal allowed the appeal filed by the appellant, granting consequential relief. The decision was based on the lack of evidence proving the appellant's knowledge of the seized goods being smuggled, thereby rendering the penalty under Section 112(b) unjustified.This detailed analysis of the judgment highlights the arguments presented by both parties, the legal provisions involved, and the Tribunal's reasoning leading to the decision in favor of the appellant.