1995 (2) TMI 180 - AT - Customs

Tribunal confirms cinnamon confiscation, penalty upheld, redemption fine allowed. Collector's decision on cardamom and raisin upheld.

The tribunal confirmed the confiscation of cinnamon and upheld the imposition of a penalty on the appellant. The appellant was allowed to redeem the ... Burden of proof in confiscation proceedings - circumstantial evidence and adverse inference under Section 106, Indian Evidence Act - confiscation as a penalty in rem - penalty under Section 112(b) of the Customs Act despite non-mention of specific clause in show-cause notice - release of seized goods on appealBurden of proof in confiscation proceedings - circumstantial evidence and adverse inference under Section 106, Indian Evidence Act - confiscation as a penalty in rem - Confiscation of the cinnamon was lawful subject to option of redemption on payment of a redemption fine. - HELD THAT: - The Tribunal upheld the finding that the totality of circumstances - the appearance and foreign markings on the packing, the information received by Customs, the incredible story of the appellant about purchase and storage, and inconsistent statements of the driver and cleaner - furnished sufficient prima facie proof that the cinnamon were recently brought into the country and thus smuggled. Applying the authorities cited, the Tribunal accepted that in confiscation proceedings (a penalty in rem) the Department need only produce sufficient direct or circumstantial evidence to raise a presumption in its favour, and that failure of the appellant to disclose documents concerning source of acquisition permits an adverse inference under Section 106. While no specific reasoning was given for absolute confiscation, the Tribunal allowed redemption on payment of a redemption fine and fixed the period for exercising that option. [Paras 5]Confiscation confirmed but redeemed on payment of a specified redemption fine within two months.Penalty under Section 112(b) of the Customs Act despite non-mention of specific clause in show-cause notice - Imposition of penalty under Section 112(b) was upheld notwithstanding that the show-cause notice and order did not specifically cite clause (a) or (b). - HELD THAT: - The Tribunal held that where the source of the adjudicating officer's power can be validly traced to Section 112(b), omission to mention the exact clause in the show-cause notice or order is not fatal. Reliance was placed on earlier tribunal view and on the principle in State of Sikkim v. Dorjee Thering Bhutia that action traceable to a valid source of power cannot be struck down for being levelled under a different provision. As the appellant had claimed the goods, he was a person 'concerned' in their conveyance and liable to penalty under Section 112(b). [Paras 6]Penalty under Section 112(b) confirmed.Release of seized goods on appeal - Release of the cardamom and raisin by the Collector (Appeals) was not interfered with and the department's cross-objection was dismissed. - HELD THAT: - The Tribunal noted that the cardamom and raisin were small quantities, were not packed in containers bearing foreign markings, and had been released by the Collector (Appeals). On that basis there was no reason to disturb the appellate authority's order releasing these items.Cross-objection dismissed; release of cardamom and raisin sustained.Final Conclusion: The appeal is disposed of by confirming the confiscation of the cinnamon subject to redemption on payment of the redemption fine fixed by the Tribunal, confirming the penalty under Section 112(b), and dismissing the department's cross-objection against release of the cardamom and raisin. Issues Involved:1. Confiscation of cinnamon.2. Imposition of penalty on the appellant.3. Release of cardamom and raisin by the Collector (Appeals).Detailed Analysis:1. Confiscation of Cinnamon:The Customs Officers received information about the smuggling of cinnamon and other contraband goods from Chittagong, Bangladesh. Upon intercepting a vehicle, they found 29 bags of cinnamon, 20 kgs of cardamom, and 17.5 kgs of raisin of foreign origin. The goods and the vehicle were seized, and after investigation, the Additional Collector confiscated the goods and imposed a penalty on the appellant. The appellant contended that there was no proof of the cinnamon's foreign origin and that the goods were not notified, thus the burden of proof was on the department. The tribunal considered the circumstances, including the foreign markings on the cinnamon bags and the appellant's inconsistent story about the goods' origin. The tribunal cited Supreme Court judgments, emphasizing that the appearance and packing of the goods indicated recent importation. The appellant's failure to provide documentation for the purchase of the cinnamon supported the conclusion that the goods were smuggled. The tribunal confirmed the confiscation but allowed the appellant to redeem the cinnamon on payment of a redemption fine of Rs. 1 lakh.2. Imposition of Penalty on the Appellant:The appellant argued that the penalty was unjustified due to the absence of mens rea and the non-mention of specific sub-clauses of Section 112 in the show cause notice. The tribunal referenced previous judgments, stating that the burden of proof was on the department to show that the goods were smuggled. The tribunal found that the circumstances and the appellant's false story were sufficient to discharge this burden. The tribunal also addressed the issue of non-mention of specific sub-clauses, citing a Supreme Court decision that the source of power could be validly traced to Section 112(b) of the Customs Act. Therefore, the imposition of the penalty was upheld.3. Release of Cardamom and Raisin by the Collector (Appeals):The department filed a cross-objection against the release of cardamom and raisin. The tribunal noted that these items were in small quantities and not packed in bags with foreign markings. The tribunal saw no reason to interfere with the Collector (Appeals)' decision to release these goods. Consequently, the cross-objection was dismissed.Conclusion:The tribunal confirmed the confiscation of the cinnamon and the imposition of the penalty on the appellant. However, it allowed the appellant to redeem the cinnamon on payment of a redemption fine. The release of cardamom and raisin by the Collector (Appeals) was upheld, and the department's cross-objection was dismissed.