TaxTMI 
TaxTMI 
1987 (6) TMI 162
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....eras valued at Rs. 1,61,200/- were, therefore, seized under Section 110 of the Customs Act on the reasonable belief that the same had been smuggled into India in violation of the restrictions imposed on the import thereof and were liable to confiscation under the provisions of the said Act. The notified goods register was also taken into possession. 2. Shri Dass was summoned to the office on 6-12-1984. His statement was recorded under Section 108 of the Customs Act. Shri Dass gave a detailed and long explanation regarding shortage of 14 still cameras along with the evidence of purchase/import of 28 cameras seized by the Customs Officers. Further investigation was undertaken by the authorities consequent to the statement given by Shri Dass. Thereafter, a show cause notice dated 3-6-1985 was issued to the appellant firm as well as Shri R.C. Dass alleging contravention of (i) clause 3(i) of the Import Trade (Control) Order, 1955 issued under Sections 3 and 4A of the Imports and Exports (Control) Act, 1944 (ii) provisions of Chapter IV-A of the Customs Act, 1962 and the rules made thereunder, (iii) Baggage (Condition of Exemption) Rules, 1975 and (iv) ITC Public Notice No. 27/80 ....
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....nd had no knowledge about the Customs law; that the goods cleared under the Baggage Rules, 1975 could be sold when its value had depreciated by 50% on account of use and since all the cameras purchased by him were duly covered under the above provisions of the Baggage Rules, he had not contravened any provisions of Customs law by purchasing the same. The appellant then goes on to give detailed explanation for each of the specific allegation in respect of specific cameras mentioned in the show cause notice. 6. After setting out the defence of the appellant, Collector of Customs, New Delhi, respondent herein, has set out his discussions and findings in para 25 of the impugned order. For a correct appreciation and the conclusions hereinafter to be given, it is reproduced below:- "I have carefully gone through the case records and the submissions made in reply to show cause notice: From the facts given above and the submissions made, it is obvious that M/s Dass Photo Electronics have been scouting around and purchasing cameras which have been brought in as baggage by the passengers. Sale of items cleared in baggage is prohibited unless the market value depreciates by 50 per cen....
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....hat the goods had been illegally acquired by the appellants. In fact, all documentary evidence, namely receipts and vouchers taken from the customers, registers and documents taken into possession by the Customs Officers were verified; vouchers were tallied with the enquiries from the customers. The Collector has not given any valid reasons or grounds for holding the appellants guilty for not maintaining the accounts properly and are not getting the proper vouchers. There was thus no ground for imposition of penalty under Section 112 of the Customs Act. Imposition of penalty on the appellants firm without a finding on their mensrea and guilty knowledge and malafide is improper and illegal. Penalty has been imposed by the learned adjudicating authority on mere technical violations, if any, merely to justify the checking made by his subordinates. At the most the warning would have been sufficient. For this proposition the learned advocate has relied upon Supreme Court's judgment in the case of Hindustan Steel v. State of Orissa (AIR 1970 SC 253) and Tribunal's decision in the case of R.S. Subramaniam v. Collector of Customs and Central Excise, Trichi [1987 (27) E.L.T. 74-SRB] with th....
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.... cause notice. Therefore, penalty imposed on the appellant must be within the four corners of the ingredients of the provisions of Section 112(b). If those ingredients are not found in the impugned order, the penalty imposed is liable to set aside. 8. Learned SDR appearing for the Revenue has reiterated the findings of the Collector in the impugned order. Learned SDR has also conceded that the department has not filed any cross-objections to the appeal filed by the appellant herein or cross-appeal against the impugned order. 9. I have carefully considered the pleas advanced on both sides. It is true that the learned adjudicating authority has not considered it just and proper to order confiscation of the seized cameras. Non-confiscation of the seized cameras however, cannot alone be a ground for setting aside the penalty imposed under Section 112 of the Customs Act as has been sought to be argued by the appellant's learned advocate. Section 112(a) imposes the liability of penalty on a person if such person does or omits to do an act rendering goods liable to confiscation under Section 111 or abets the doing or omission of such an act. No allegation of abetment of doing ....
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....by the learned Collector in defining the role of the appellants is a very strong expression and may well be covered by the provisions of Section 112 of the Customs Act as referred to above regarding the commission or omission of any action on the part of the appellant. The term 'collusion' by definition means a deceitful agreement... between two or more persons... to some evil purpose such as to defraud a third of his right. Collusion may be either apparent and patent, or what is more common, secret and covered by an apparent show of honesty. In either case, collusion implies a community of purpose and intention between parties colluding." (Page 369 Law Lexicon Vol. I 1982 by T.P. Mukherjee)". But it is again to be noted here that the learned Collector has not discussed any evidence on record before making this finding against the appellants. Appellants' contention has been all through that persons of status and respectability with fixed addresses have sold their goods under proper letters of sale and this is what was required by the appellants in complying with the provisions of Chapter IV-A of the Customs Act; the appellants themselves have not been instrumental in importing the....