1987 (10) TMI 207 - AT - Customs

Customs penalty overturned due to lack of evidence of appellant's knowledge or involvement in smuggling activities. Penalty refund ordered.

DINESH ISHWARLAL PATEL Versus COLLECTOR OF CUSTOMS, BOMBAY

DINESH ISHWARLAL PATEL Versus COLLECTOR OF CUSTOMS, BOMBAY - 1988 (34) E.L.T. 382 (Tribunal) Issues:- Appeal against penalty imposed on the appellant by the Addl. Collector of Customs, Bombay.Detailed Analysis:1. The appeal was directed against the penalty of Rs. 2,000/- imposed on the appellant by the Addl. Collector of Customs, Bombay, in connection with the seizure of 105 wrist watches of foreign origin from the appellant's premises following the interception of an individual carrying smuggled wrist watches.2. The appellant contended during the appeal that he was innocent and unaware of the contents of the packages kept by the individual in his house. He claimed that he did not know the wrist watches were of foreign origin until the Customs Officers opened the packages in his presence. The appellant also mentioned language barriers during questioning and stated that he had only signed statements without understanding their contents.3. The Collector argued that the appellant had received a monthly consideration for keeping the wrist watches, implying knowledge of their foreign origin. It was suggested that the appellant's acceptance of payment indicated awareness of the nature of the goods stored in his premises.4. The judgment highlighted that the Addl. Collector's decision lacked evidence to support the conclusion that the appellant was knowingly involved in the smuggling activities. The appellant's statement, which denied knowledge of the smuggled goods, was deemed self-exculpatory. The Collector failed to establish that the appellant was aware or had reason to believe that the watches were smuggled goods, a prerequisite for imposing a penalty under the Customs Act.5. The judgment emphasized that mere possession of the watches without knowledge or reason to believe they were smuggled goods was insufficient to justify a penalty. The high consideration offered by the individual storing the watches in the appellant's premises raised suspicion but did not automatically imply knowledge of the watches' smuggled nature.6. Ultimately, the Tribunal set aside the penalty imposed on the appellant, ruling that the Addl. Collector had erred in imposing the penalty without sufficient evidence of the appellant's awareness or belief regarding the nature of the seized wrist watches. The appellant was deemed not liable for penal action, and any paid penalty was ordered to be returned to the appellant.