2024 (11) TMI 1145 - AT - Customs

Rs.10 lakh penalty upheld for abetting cigarette smuggling under Section 112(b), second appellant's penalty set aside

CESTAT Kolkata upheld penalty of Rs.10 lakhs imposed on Appellant No.1 under Section 112(b) of Customs Act, 1962 for abetting cigarette smuggling ... Confiscation of the illegally imported cigarettes in the guise of stationery items - imposing penalties for the appellants herein for their role in the alleged offence - HELD THAT:- As evidences available on record indicate that Sri Man Singh was well aware of the smuggling activities of the smuggling syndicate involved in the subject case, who diverted smuggled cigarettes concealed in the Nepal bound container No. 3707024, in transit. Thus, we hold that the evidences available on record prove that Shri Man Singh has abetted the act of smuggling in the present case also. Knowing fully well that the container in transit contained smuggled cigarettes, he provided the transportation and helped in replacing the smuggled cigarettes with stationery items. He also helped in storage of the stationery goods to be replaced in the godown owned by Shri Akhilesh Singh. We hold that the Appellant No. 1 has abetted the act of illegal smuggling activities and thereby connived with the smuggling racket for smuggling of cigarettes in to the country. Accordingly, we hold that the ld. adjudicating authority has rightly imposed penalty on the Appellant No. 1 under Section 112(b) of the Customs Act, 1962 in the impugned order and hence, we uphold the same. Regarding the penalty imposed on the Shri Pravin Kumar Singh (Appellant No. 2), we observe that penalty has been imposed on him for abetting the alleged offence and for the role played by him in the past and present smuggling activities. The role played by him has been elaborated by the ld. adjudicating authority of the impugned order. From the statements of Shri Santosh Kumar Prasad and Shri Srimonta Rakshit, it is evident that Shri Pravin Kumar Singh has refused the clearance work of the said consignment brought to him and advised Shri Santosh Kumar Prasad to approach Shri Srimonta Rakshit as he has no experience of clearance of Nepal bound transit containers. In respect of clearance of the goods imported through the container GESU 5984886, we observe that Shri Santosh Kumar Prasad had come to his office again on 18/19.05.2015, when he was not available in the office. Shri Prasad had informed him over phone that he had left some documents in his office related to clearance of one more Nepal bound import consignment of the same party. In turn, he had given the said documents to Shri Srimonta Rakshit for clearance of the second consignment. From the statements mentioned above, therefore, we observe that Shri Pravin Kumar Singh has played no role in the clearance of the earlier import vide container no. VMLU 3707024 or in the smuggling of cigarettes through the container GESU 5984886 in the present case. Thus, we find that the evidence on record does not indicate that the Appellant No. 2 had played any role in the alleged smuggling of foreign origin cigarettes. Accordingly, we hold that the penalty imposed on him under Section 112(b) of the Customs Act, 1962 in the impugned order is not sustainable and hence, we set aside the same. We pass the following order: - (i) We uphold the penalty of Rs.10,00,000/- (Rupees Ten Lakhs only) imposed on the Appellant No. 1 (Shri Man Singh) under Section 112(b) of the Customs Act, 1962. (ii) We set aside the penalty of Rs.20,00,000/- (Rupees Twenty Lakhs only) imposed on the Appellant No. 2 (Shri Pravin Kumar Singh) under Section 112(b) of the Customs Act, 1962. Issues Involved:1. Imposition of penalty on Appellant No. 1 under Section 112(b) of the Customs Act, 1962.2. Imposition of penalty on Appellant No. 2 under Section 112(b) of the Customs Act, 1962.Issue-wise Detailed Analysis:1. Imposition of Penalty on Appellant No. 1:The primary issue concerning Appellant No. 1, Shri Man Singh, revolves around the imposition of a penalty of Rs.10,00,000 under Section 112(b) of the Customs Act, 1962, for his alleged involvement in smuggling activities. The facts of the case indicate that the Directorate of Revenue Intelligence (DRI) intercepted a container at Kolkata Port, which was declared to contain stationery goods but was found to contain 649 cartons of foreign-origin cigarettes. It was alleged that Appellant No. 1 facilitated the transportation and storage of these goods.The evidence against Appellant No. 1 includes his admission that he allowed the transport of a container to a godown where the goods were replaced, and his arrangement of a godown for storing stationery goods. The tribunal noted that Appellant No. 1, with 30 years of experience in transporting export and import containers, should have been aware of the illegality of opening and replacing goods in a sealed container. The tribunal found that Appellant No. 1 was aware of the smuggling activities and actively participated by providing transportation and storage facilities. Consequently, the tribunal upheld the penalty imposed on Appellant No. 1, concluding that he abetted the act of smuggling.2. Imposition of Penalty on Appellant No. 2:The issue concerning Appellant No. 2, Shri Pravin Kumar Singh, involves the imposition of a penalty of Rs.20,00,000 under Section 112(b) of the Customs Act, 1962. The allegation was that he was involved in the smuggling activities by facilitating the clearance of the smuggled goods. However, the tribunal found that there was no specific evidence implicating Appellant No. 2 in the smuggling activities. It was noted that Appellant No. 2, an employee of a CHA firm, had introduced the smuggling syndicate to another individual who handled the clearance of the goods. The tribunal observed that merely introducing individuals does not establish knowledge or involvement in smuggling activities.The tribunal found that the evidence on record did not support the allegation that Appellant No. 2 played any role in the smuggling of foreign-origin cigarettes. As such, the tribunal set aside the penalty imposed on Appellant No. 2, concluding that the imposition of the penalty was not sustainable based on the available evidence.Conclusion:In conclusion, the tribunal upheld the penalty imposed on Appellant No. 1, Shri Man Singh, for his active role in the smuggling activities, while setting aside the penalty on Appellant No. 2, Shri Pravin Kumar Singh, due to a lack of evidence implicating him in the alleged smuggling activities. The appeals were disposed of accordingly.