Tribunal Upheld Confiscation of Goods with Reduced Penalties

The Tribunal upheld the absolute confiscation of "Gudang Garam" cigarettes and aluminum scrap in a live consignment, with reduced penalties. Penalties on past consignments were set aside due to lack of evidence. Electronic evidence and statements were deemed inadmissible without proper examination. Penalties under certain sections were set aside for specific individuals. The appeals were partly allowed with reduced penalties and consequential relief, while others were allowed with consequential relief.

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Issues Involved:
1. Confiscation and penalties related to "Gudang Garam" branded cigarettes concealed in aluminum scrap.
2. Demand of customs duty and penalties on past consignments based on email evidence and statements.
3. Admissibility and evidentiary value of electronic evidence (emails) and statements.
4. Examination and clearance procedures for imported aluminum scrap.
5. Imposition of penalties under various sections of the Customs Act, 1962.

Issue-wise Detailed Analysis:

1. Confiscation and Penalties on Live Consignment:
The Customs Authority found 13,68,000 sticks of "Gudang Garam" branded cigarettes concealed in aluminum scrap imported by M/s. Dwarkesh Recycling under Bill of Entry No. 7720230 dated 06.12.2016. The cigarettes were absolutely confiscated under Sections 111(d), 111(f), and 111(l) of the Customs Act, 1962. The aluminum scrap used to camouflage the cigarettes was also confiscated under Sections 111(m) and 119. The appellant was given an option to redeem the aluminum scrap on payment of a reduced redemption fine of Rs. 5 Lacs instead of Rs. 20 Lacs. Additionally, penalties under Section 112(a)(i) were reduced from Rs. 25 Lacs to Rs. 10 Lacs, while the penalty under Section 112(a)(ii) was set aside.

2. Demand of Customs Duty and Penalties on Past Consignments:
The respondent demanded customs duty and imposed penalties on past consignments of cigarettes allegedly smuggled by M/s. Dwarkesh Recycling and M/s. Shivanjali Corporation. This was based on an email dated 15.08.2016 from HKM Trading Co. retrieved from the email ID of Shri Bharat Patel and inculpatory statements from various individuals. However, the Tribunal found that all past consignments were physically examined by customs officers, and no discrepancies were found. The examination orders, which are documentary evidence, prevailed over the oral statements. Therefore, the demand of duty and penalties for past consignments was set aside.

3. Admissibility and Evidentiary Value of Electronic Evidence and Statements:
The Tribunal addressed the admissibility of email evidence under Section 138C(2) of the Customs Act and Section 65(B) of the Evidence Act, 1872. It was argued that the email prints were not admissible without a proper certificate. The Tribunal cited the judgment in S.N. Agrotech Vs Commissioner of Customs and emphasized that statements recorded under Section 108 of the Customs Act must be examined and cross-examined under Section 138B for evidentiary value. Since the statements were not examined as required, they were deemed to have no evidentiary value.

4. Examination and Clearance Procedures for Imported Aluminum Scrap:
The Tribunal noted that the imported aluminum scrap was accompanied by a Pre-Shipment Inspection Certificate (PSIC) and was examined as per Circular No. 43/2001-Cus dated 06.08.2001. The customs officers physically examined the consignments, and no mis-declaration was found. The Tribunal held that the clearance procedures under Section 47 of the Customs Act were followed, and the past consignments were lawfully cleared for home consumption.

5. Imposition of Penalties under Various Sections of the Customs Act:
The Tribunal addressed penalties imposed under Sections 112(a), 114A, 114AA, and 117 of the Customs Act. It was held that penalties under Section 114AA were not sustainable for past consignments as there was no evidence of smuggling. Penalties under Section 117 for non-honoring summons were also set aside, as the appellants had already been penalized under IPC in the ACMM Court. The Tribunal reduced the penalties imposed on the live consignment and set aside penalties related to past consignments and certain individuals.

Conclusion:
1. Absolute confiscation of 13,68,000 sticks of "Gudang Garam" cigarettes upheld.
2. Confiscation of 28,340 Kgs of aluminum scrap upheld with reduced redemption fine.
3. Penalties on past consignments set aside due to lack of evidence.
4. Statements and electronic evidence deemed inadmissible without proper examination and certification.
5. Penalties under Sections 114AA and 117 set aside for specific individuals.

Orders:
1. Appeal No. C/11723/2018 partly allowed with reduced penalties and consequential relief.
2. Appeal Nos. C/11724/2018, C/12355/2018, and C/12447/2018 allowed with consequential relief.

Pronouncement:
The judgment was dictated and pronounced in open court on 12.6.2020.

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