2019 (3) TMI 1240 - AT - Customs

Smuggling Penalties Reduced; Individual Penalties Cut, Companies Exonerated

M. Mohammed Sadham, A. Selvaraj, A. Ashkar Ali, S. Mohammed Rabeek, S. Rahamath Ali, Afrin Express Courier Service, Bin Dawood Travels and Cargo Versus Commissioner of Customs, Tuticorin, Chennai

The Tribunal found that the penalties imposed on individuals involved in a smuggling operation were excessive and reduced them. The penalties on Mohammed ... Smuggling - Gold - Cigarettes - unaccompanied baggage imported in container - Absolute confiscation - penalty - Held that:- Although the said container may well have been brought from Colombo to Tuticorin Port at the behest of the D.R.I, nonetheless, it had been initially destined for Tuticorin Port only. Although the connection sought to be established between the second container CAXU 3151576 and the appellants is not absolutely watertight and absolute, nonetheless, enough linkage has been established between these two persons and the gold and cigarettes that have been attempted to be smuggled in the said container. There is a preponderance of probability that in this case also, that had the two appellants been footloose and free, they would very well have filed import documents for the container load, moved the container out of the port and taken it to their godown for possible removal replacement / swapping of goods and / or container. The acts and omissions on the part of Mohammed Rabeek and Rahamath Ali will attract penalty for abetting the said attempted smuggling under Section 112 of the Customs Act, 1962. However, the quantum of such penalty will have to be commensurate not only to the degree of proof that the investigation has been able to throw up against these two persons but also / to the degree of complicity and abetment of each of them. Undoubtedly, there is a needle of suspicion that had the earlier container TLXU 2021855 not been seized and Shri Mohammed Rabeek and Shri Rahamath Ali not been in judicial custody, they would have caused clearance of the second container CAXU 3151576 also, and facilitated Mr.Roselan on the smuggling gold and cigarettes etc. from Malaysia and handed over the same to persons as instructed by Roselan. But it remains only a needle of suspicion. As mentioned earlier, statements from Rabeek have been recorded after the seizure from container CAXU 3151576 which in any case have been retracted subsequently. The main linkage that now connects Mohameed Rabeek with the seizure from the second container is the exchange of e-mails between Roselan and him with regard to attempt of Roselan to call back the second container from Colombo back to Malaysia. And from a legal view point, a needle of suspicion is not watertight proof or incontervertible evidence - The requests for cross examination made by both Rabeek and Rahamath Ali were also not acceded to. These inadequacies in the investigation and adjudication proceedings only serve to dilute the degree of abetment and complicity that has been alleged in the SCN. In the circumstances, the penalty of ₹ 25 lakhs is unnecessarily high and not commensurate with all these factoids. In our view, interest of justice will be more than adequately served by modifying and reducing the penalty imposed on Shri Mohammed Rabeek under Section 112 of the Customs Act, 1962 to ₹ 5,00,000/-. Penalty imposed on Shri Rahamath Ali - Held that:- There is no allegation that any such e-mails have been exchanged between Roselan and Rahamath Ali. Rahamath Ali has also pointed out that he was not informed by Mohammed Rabeek from where the contraband goods originated, who only was in touch with Roselan or anyone else in Malaysia through e-mail or phone. He has also alluded to the letter of Roselan dt. 3.10.2016 where latter has stated that he was never in touch with Rahamath Ali and that he never spoke to him - the penalty of ₹ 25,00,000/- imposed on Shri Rahamath Ali under Section 112 ibid is undoubtedly high and that penalty of ₹ 2,50,000/- would meet the ends of justice in this case. Penalty imposed on Bin Dawood Cargo & Travels, Chennai - Held that:- Penalty is set aside since the penalty has already been imposed on its proprietor of Shri S. Rahamath Ali. Application disposed off. Issues Involved:1. Legality and propriety of penalties imposed under Section 112(a) and Section 114AA of the Customs Act, 1962.2. Legality and propriety of the revocation of courier registration of Afrin Express Courier Service.Issue-wise Detailed Analysis:1. Legality and Propriety of Penalties Imposed:Mohammed Rabeek (Appeal C/41821/2018) and Rahamath Ali (Appeal C/41820/2018):- Facts: Investigations and subsequent proceedings related to the interception of container TLXU 2021855 and the search of the godown of Bin Dawood Cargo and Travels Service resulted in the seizure of 12 pieces of foreign-marked gold (FMG) bars and 2 cut pieces of foreign-origin gold, totally weighing 11993.400 grams and valued at Rs. 3,43,01,124/-, and 4,00,000 cigarette sticks valued at Rs. 30,00,000/-.- Contentions: Mohammed Rabeek claimed he got to know about the concealed gold only after being requested by Roselan to handle certain packets carefully. Rahamath Ali contended that he was only helping his brother and had no direct involvement in the smuggling.- Findings: The Tribunal found that both brothers were involved in the smuggling operation, albeit with different degrees of complicity. Mohammed Rabeek was the primary abettor, while Rahamath Ali played a supporting role. The penalties imposed were found to be excessively high and were reduced to Rs. 15,00,000/- for Mohammed Rabeek and Rs. 7,50,000/- for Rahamath Ali.Mohammed Sadham (Appeal C/41262/2018):- Facts: Mohammed Sadham, the son of Mohammed Rabeek, was found to have accompanied the driver of the lorry carrying the container TLXU2021855.- Contentions: Sadham claimed he was falsely implicated and had no knowledge of the smuggling.- Findings: The Tribunal found that Sadham's role was minimal and reduced the penalty from Rs. 15,00,000/- to Rs. 1,50,000/-.A. Selvaraj (Appeal C/41263/2018):- Facts: Selvaraj was accused of managing accounts related to the clearance of unaccompanied baggage and abetting the smuggling operation.- Contentions: Selvaraj claimed he was not aware of the ownership of the consignment and was only facilitating clearance of goods.- Findings: The Tribunal found no substantial evidence of Selvaraj's involvement in the smuggling operation and set aside the penalty imposed on him.A. Ashkar Ali (Appeal C/41264/2018):- Facts: Ashkar Ali was implicated for lending his passport for the import of goods.- Contentions: Ashkar Ali claimed he was a poor laborer who lent his passport for a small fee and had no knowledge of the smuggling.- Findings: The Tribunal found that Ashkar Ali's involvement was minimal and reduced the penalty under Section 112(a) to Rs. 25,000/- while setting aside the penalty under Section 114AA.Bin Dawood Travels & Cargo (Appeal C/41819/2018):- Facts: The firm was implicated in the smuggling operation as it had rented the godown where the contraband was found.- Contentions: The firm contended that it was only involved in the delivery of goods and not in the smuggling operation.- Findings: The Tribunal found that the firm was not directly involved in the smuggling operation and set aside the penalty imposed on it.2. Legality and Propriety of Revocation of Courier Registration of Afrin Express Courier Service (Appeal C/41432/2018):- Facts: The registration of Afrin Express Courier Service was revoked based on the alleged involvement of its proprietor, Rahamath Ali, in the smuggling operation.- Contentions: Afrin Express contended that no show cause notice was issued to it and that its proprietor's alleged misconduct should not affect the firm's registration.- Findings: The Tribunal found that the alleged misconduct of Rahamath Ali in his personal capacity or through another firm should not affect the registration of Afrin Express Courier Service. The revocation of the registration was set aside.Conclusion:- The penalties imposed on Mohammed Rabeek, Rahamath Ali, Mohammed Sadham, and A. Ashkar Ali were reduced, while the penalties on A. Selvaraj and Bin Dawood Travels & Cargo were set aside.- The revocation of the courier registration of Afrin Express Courier Service was set aside.