2017 (11) TMI 492 - AT - Customs

Tribunal overturns penalties in smuggling case due to lack of evidence

Budget Logistics Pvt. Ltd., Manoj Kumar, Satadev Kataria And Sanjay Chauhan Versus CC, Air Cargo (Export), New Delhi

The Tribunal set aside the penalties imposed on the appellants in a case involving the smuggling of memory cards, RAMs, and gold bars into India. It found ... Smuggling - RAMs - Gold Bars - penalty - whether the provisions of Section 111(d) and 111 (m) can be invoked under the circumstances of the present case for confiscation of the goods, resulting in imposition of penalties under Section 112 and Section 114AA ibid on the appellants? - Held that: - It is an admitted fact on record that the DRI officers intercepted the goods before filing any document in respect of the imported goods by the concerned persons. Since none of the appellants had signed any document for the purpose of obtaining a licence or for the purpose of importing the goods, it cannot be said that any fraudulent practice was adopted by the appellants for illegal importation of goods, which were liable for confiscation. Thus, it is obvious that the provisions of sub-section (d) of Section 111 ibid do not get attracted for confiscation of the goods. Since the appellants are no way concerned with the goods or making any declaration in respect of the imported goods, the provisions of Section 112(a) and 114AA ibid cannot be invoked against them for imposition of penalties. Appeal allowed - decided in favor of appellant. Issues:1. Confiscation of goods under various sub-sections of Section 1112. Imposition of penalties under Section 112 and 114AAAnalysis:1. The case involved the smuggling of memory cards, RAMs, and gold bars into India. The Directorate of Revenue Intelligence (DRI) received intelligence about the smuggling operation, implicating certain individuals. Upon examination of the goods, the DRI initiated proceedings against the appellants, alleging fraudulent import practices. The Show Cause Notice proposed confiscation of goods under different sub-sections of Section 111 of the Customs Act, 1962, along with the imposition of penalties. However, the adjudication order only discussed confiscation under specific sub-sections, leading the appellant to argue that confiscation under other sub-sections cannot be upheld without proper discussion. The appellant also contested the imposition of penalties, claiming a lack of specific findings regarding their role in the alleged fraud.2. The Tribunal focused on whether the provisions of Section 111(d) and 111(m) could be invoked for confiscation of goods and subsequent penalty imposition. Section 111(d) pertains to goods imported contrary to prohibitions, while Section 111(m) deals with discrepancies in declared values or particulars. The Tribunal noted that the goods were intercepted before any documentation by the appellants, indicating no direct involvement in illegal importation. As no fraudulent practices were attributed to the appellants, Section 111(d) was deemed inapplicable. Additionally, since no bill of entry was filed by the appellants, Section 111(m) could not be invoked for confiscation. The Tribunal emphasized that the appellants had no role in clearing the goods or making declarations, thus negating the basis for penalties under Section 112(a) and 114AA.In conclusion, the Tribunal found no merit in the adjudication order regarding penalties imposed on the appellants. Consequently, the penalties were set aside, and the appeals were allowed in favor of the appellants.