2017 (8) TMI 146 - AT - Customs

Tribunal overturns penalties for lack of evidence in gold smuggling case

Miss Nim Lhamu Sherpa, Smt. Mingma Lhamu Sherpa Versus Commissioner of Customs, Central Excise & Service Tax, Siliguri

The Tribunal set aside the penalties imposed on the appellants for insufficient evidence of their knowledge and involvement in gold smuggling. However, ... Absolute confiscation of vehicle - smuggling of Gold - claim of appellant is that she had no knowledge of the alleged offense. Further, she was not available at the time of seizure, imposition of penalty is not justified - whether the appellants had any knowledge of the seized gold recovered from the vehicle for the purpose of imposition of penalty under section 112 of the Act? - Held that: - The enquiry officers proceeded on the basis of probability of the knowledge of the appellant No.1 and there is no attempt to prove it at all. It is well settled that the penalty cannot be imposed merely on the basis of suspicion unless there is sufficient material available on record. There is no evidence on record to show that the appellants were actually in possession of the seized goods. It is noted that there were co-occupants in the seized vehicle - penalty set aside. The Tribunal in the case of Jai Narain Verma v. Collector of Customs, New Delhi [1994 (2) TMI 171 - CEGAT, NEW DELHI], set aside the penalty on the appellant and observed that burden of establishing appellant s involvement in offence not discharged by department beyond doubt, there being no evidence to link appellant with the contraband gold. The imported gold bars were recovered from the vehicle and, therefore, confiscation of the conveyance and imposition of redemption fine under section 115 of the Act is justified - penalties set aside. Appeal allowed - decided partly in favor of appellant. Issues Involved:1. Knowledge and involvement of the appellants in the smuggling of gold.2. Justification of penalties imposed on the appellants under Section 112(a) and 112(b)(i) of the Customs Act, 1962.3. Justification of confiscation of the vehicle and imposition of redemption fine under Section 115 of the Customs Act, 1962.Issue-wise Detailed Analysis:1. Knowledge and Involvement of the Appellants in the Smuggling of Gold:The primary issue was whether the appellants had knowledge of the gold found in the vehicle. The appellant No.1, who was driving the vehicle, claimed she had no knowledge of the gold bars concealed under the driver's seat. She argued that someone might have planted the gold to implicate her. The Customs officers recorded statements from various individuals, including police officers who confirmed the recovery of gold. However, there was no direct evidence that the appellant No.1 had knowledge of the gold. The co-occupants of the vehicle did not indicate that appellant No.1 was aware of the gold. The Tribunal noted that the appellant No.1 consistently maintained her lack of knowledge from the beginning and there was no evidence to contradict her claim.2. Justification of Penalties Imposed on the Appellants:The penalties were imposed under Section 112(a) and 112(b)(i) of the Customs Act, 1962, which penalizes improper importation of goods. The adjudicating authority based the penalties on the assumption that the appellants were aware of the smuggling. However, the Tribunal found that there was no substantial evidence to prove that the appellants had knowledge of the gold. The Tribunal emphasized that penalties cannot be imposed based on suspicion alone and must be supported by concrete evidence. The Tribunal referred to previous judgments, including the case of Jai Narain Verma v. Collector of Customs, New Delhi, where penalties were set aside due to lack of evidence linking the appellant to the contraband.3. Justification of Confiscation of the Vehicle and Imposition of Redemption Fine:The vehicle was confiscated, and a redemption fine was imposed under Section 115 of the Customs Act, 1962, as the gold bars were found in the vehicle. The Tribunal upheld the confiscation and the redemption fine, stating that the recovery of the gold bars from the vehicle justified these actions. The Tribunal acknowledged that while the penalties on the appellants were not warranted due to lack of evidence of their knowledge, the confiscation of the vehicle was justified as it was used in the smuggling of gold.Conclusion:The Tribunal modified the impugned order by setting aside the penalties imposed on the appellants due to insufficient evidence of their knowledge and involvement in the smuggling of gold. However, the confiscation of the vehicle and the imposition of the redemption fine were upheld as justified under the circumstances. The judgment emphasized the need for concrete evidence to impose penalties and distinguished between the penalties on individuals and the confiscation of the vehicle used in the smuggling.