CEGAT Tribunal in New Delhi overturns penalty under Customs Act, stresses importance of solid evidence

PREM KUMAR CHADHA Versus COLLECTOR OF CUSTOMS, CHANDIGARH

PREM KUMAR CHADHA Versus COLLECTOR OF CUSTOMS, CHANDIGARH - 1996 (81) E.L.T. 214 (Tribunal) Issues:
- Imposition of personal penalty under Section 112 of the Customs Act, 1962 based on recovery of a chit containing a name allegedly linking the appellant to smuggling of narcotic drugs.

Detailed Analysis:

The appeal before the Appellate Tribunal CEGAT, New Delhi was against the order-in-original passed by the Additional Collector, which involved the absolute confiscation of heroin and hashish under Section 111(d) of the Customs Act, 1962, along with the imposition of a personal penalty of Rs. 20,000 on the appellant. The appellant did not challenge the confiscation of goods but contested the penalty imposed. The case was based on the recovery of a chit containing the name of an individual, allegedly linking the appellant to the smuggling activity. The appellant denied any connection with the seized goods and challenged the imposition of the penalty. The adjudicating authority, however, deemed the appellant involved in smuggling based on the chit and imposed the penalty under Section 112 of the Customs Act.

The Tribunal heard arguments from both sides, where the appellant's counsel argued that there was no evidence linking the chit to the appellant. It was highlighted that the name on the chit was different from the appellant's name, and the appellant was wrongly implicated in the case without any substantial proof. The counsel contended that the order was unsustainable in law due to baseless assumptions and presumptions made against the appellant.

Upon careful consideration, the Tribunal examined the contents of the chit, which was in Urdu and addressed to someone as "Bhai Saheb Adab." The chit mentioned sending chocolate to a person named Prem Pathan in Amritsar. The Tribunal noted that the department failed to prove the seizure of the chit properly. No proper procedure for seizure, as required by the Customs Act, was followed in this case. There was no evidence of where and how the chit was seized, raising doubts about its authenticity and connection to the appellant. The Tribunal found discrepancies in the department's version of events and concluded that the appellant was unfairly targeted without concrete evidence linking him to the smuggling activity. As a result, the Tribunal set aside the penalty imposed on the appellant, as the proceedings were deemed flawed and lacking substantial proof.

In conclusion, the Tribunal allowed the appeal, emphasizing the importance of following proper procedures and providing concrete evidence before imposing penalties under the Customs Act. The judgment highlighted the necessity of establishing a clear link between the accused party and the alleged offense to ensure fair and just legal proceedings.