1993 (11) TMI 132 - AT - Customs

Tribunal sets aside penalty under Customs Act, rules on car ownership liability and redemption fine.

MOKHTAR MISTRY Versus ADDL. COLLECTOR OF CUSTOMS (PREVENTIVE), PATNA

The tribunal set aside the penalty imposed under Section 112 of the Customs Act, finding that avoiding summons alone is insufficient to establish ... Avoiding summons - Effect of - Penalty Issues Involved:1. Whether the appellant is liable to be penalized under Section 112 of the Customs Act.2. Whether the appellant is the owner of the car and if the car is liable for confiscation under Section 115(2) of the Customs Act.3. Whether the appellant is entitled to an option to redeem the car upon payment of a redemption fine.Issue-wise Detailed Analysis:1. Liability under Section 112 of the Customs Act:The first point for determination is whether the appellant is liable to be penalized under Section 112 of the Customs Act. The adjudicating officer did not provide specific reasoning for holding the appellant concerned with the conveyance of the Hashish and Ganja. The order stated that the appellant avoided summons and did not appear before the department, indicating a culpable mental state. However, the appellant had submitted an application through his advocate citing illness and requesting another date, which contradicts the adjudicating officer's conclusion. Therefore, the tribunal found that the mere fact of avoiding summons is insufficient to conclude involvement in smuggling. The penalty imposed under Section 112 was set aside.2. Ownership and Liability for Confiscation under Section 115(2) of the Customs Act:The next point for consideration is whether the appellant is the owner of the car and if it is liable for confiscation. The appellant claimed ownership by filing an application on 22-4-1988 and producing a copy of the FIR and the car's registration certificate. The tribunal found sufficient evidence proving the appellant's ownership. No other claims to the car were made, and the adjudication order did not dispute the appellant's ownership.Regarding the car's liability for confiscation, Section 115(2) stipulates that any conveyance used for smuggling is liable for confiscation unless the owner proves it was used without their knowledge or connivance or that of their agent or person in charge. The appellant argued that during the material period, the car was taken by his driver, Rajkishore Singh, and never returned, corroborated by a police complaint. However, the tribunal noted that the car was taken with the appellant's consent, and there was no proof it was used without the knowledge of the appellant's agent or the person in charge. The tribunal concluded that the car is liable for confiscation.3. Option to Redeem the Car upon Payment of Redemption Fine:The final issue is whether the appellant is entitled to redeem the car by paying a redemption fine. Section 115(2) provides that if a vehicle used for hire is confiscated, the owner should be given an option to redeem it by paying a fine not exceeding the market price of the goods. The adjudicating officer failed to provide this option, rendering the order partially flawed. The tribunal determined the market price of the car on the date of seizure (17-4-1988) as Rs. 25,000/-. A redemption fine of Rs. 15,000/- was fixed. If the department had already sold the car, the appellant should receive the sale proceeds minus the redemption fine. The appeal was disposed of accordingly.