1993 (8) TMI 172 - AT - Customs

Tribunal Waives Penalty Pre-Deposit, Allows Appeal to Proceed

The Tribunal waived the pre-deposit of a penalty amount of Rs. 25,000 and allowed the appeal to proceed without the need to deposit the penalty. The ... Stay/Dispensation of pre-deposit Issues Involved:1. Waiver of pre-deposit of penalty.2. Legitimacy of penalty imposed under Section 112 of the Customs Act, 1962.3. Non-mention of specific sub-section of Section 112 in show cause notice and order.4. Evidence of involvement in smuggling.5. Confiscation of gold and sale proceeds.6. Prima facie case for stay of recovery proceedings.Issue-wise Detailed Analysis:1. Waiver of Pre-deposit of Penalty:The applicant filed a stay application seeking waiver of the pre-deposit of a penalty amounting to Rs. 25,000 and a stay on recovery proceedings. The Tribunal, after careful consideration, found that prima facie case was in favor of the applicant, thus dispensing with the requirement to deposit the penalty amount for hearing the appeal. The dissenting opinion by Member (Technical) proposed rejecting the stay application, leading to a referral to a third Member who ultimately agreed with the waiver of the pre-deposit for hearing the appeal.2. Legitimacy of Penalty Imposed under Section 112 of the Customs Act, 1962:The appellant was penalized Rs. 25,000 under Section 112 of the Customs Act, 1962, for being involved in smuggling gold biscuits. The appellant argued that the penalty was unjustified as the adjudicating authority found no evidence of his involvement in smuggling gold into India. The dissenting Member (Technical) noted that the provisions of Section 112 are broad, and the evidence provided in the show cause notice was sufficient for imposing the penalty.3. Non-mention of Specific Sub-section of Section 112 in Show Cause Notice and Order:The appellant contended that the non-mention of the specific sub-section of Section 112 in the show cause notice and the impugned order rendered the penalty invalid. The Tribunal referenced previous decisions, such as Borivli Hosiery Mills v. Collector of Customs & Central Excise, which held that non-mention of the sub-section does not vitiate the proceedings if the show cause notice provides sufficient material and evidence. The third Member concluded that the non-mention did not cause prejudice to the appellant.4. Evidence of Involvement in Smuggling:The appellant argued that the adjudicating authority had found no evidence of his involvement in smuggling gold into India. The dissenting opinion highlighted that the gold was recovered from the appellant's residence at his instance, and the appellant's possession of foreign-marked gold justified the penalty. The third Member noted that the gold was indeed smuggled and recovered at the appellant's instance, supporting the imposition of the penalty.5. Confiscation of Gold and Sale Proceeds:The case involved the confiscation of 16 gold biscuits valued at Rs. 6,38,254.08 and Rs. 1 lakh as sale proceeds of 4 foreign-marked gold biscuits. The dissenting Member (Technical) emphasized that the gold and sale proceeds were recovered from the appellant's residence, justifying the penalty. The third Member acknowledged that the gold and sale proceeds were in the Department's custody, supporting the decision to waive the pre-deposit.6. Prima Facie Case for Stay of Recovery Proceedings:The appellant argued for an unconditional stay, citing discrepancies in the adjudicating authority's findings and the lack of evidence of smuggling. The Tribunal, considering the submissions, found that a prima facie case existed in favor of the appellant, leading to the waiver of the pre-deposit for hearing the appeal. The dissenting opinion suggested that the matter was arguable and did not warrant a stay of recovery proceedings.Conclusion:In accordance with the majority decision, the pre-deposit of the penalty was dispensed with, allowing the appeal to be heard without the requirement of depositing the penalty amount. The Tribunal's decision considered the evidence, legal precedents, and the specific circumstances of the case, ultimately favoring the appellant's request for waiver of the pre-deposit.