2003 (7) TMI 330 - AT - Customs

Summary

Issues Involved:
1. Allegation of smuggling and involvement in the landing of silver ingots.
2. Reliance on statements and their retractions.
3. Evidence and its evaluation.
4. Appellant's conduct and its implications.
5. Grounds for penalty under Section 112 of the Customs Act.

Detailed Analysis:

1. Allegation of Smuggling and Involvement in the Landing of Silver Ingots:
The case centers around the appellant's alleged involvement in the smuggling of 945 kgs of silver at Tak beach near Vengurla on 6-10-92. The Collector of Customs (Preventive), Mumbai, imposed a penalty of Rs. 10 lakhs on the appellant under Clause (b) of Section 112 of the Customs Act. The appellant was accused of planning the smuggling with Mohd. Dossa and Mohd. Kalia and using a truck belonging to R. Prabhu Zantye.

2. Reliance on Statements and Their Retractions:
The Collector relied heavily on the statements of Zantye, Pramod Arolkar, and Sunil Natekar, who initially implicated the appellant. Zantye's statements, recorded on multiple dates, detailed meetings and discussions involving the appellant. However, Zantye retracted his statements on 18-2-1993, claiming he signed them without knowing their contents but later accepted their correctness on 1-3-1993. Similarly, Natekar and Arolkar retracted and later confirmed their statements.

3. Evidence and Its Evaluation:
The Collector's order was based on the statements of Zantye, Natekar, and Arolkar. However, the Tribunal found significant contradictions in the testimonies. Pandarinath Arolkar and Jagannath Warkhandkar did not implicate the appellant or confirm his presence during the smuggling operations. The Tribunal noted the lack of clarity in the show-cause notice regarding the appellant's specific role in the smuggling.

4. Appellant's Conduct and Its Implications:
The appellant's conduct raised suspicion. He was absent from his duty station on the date of the smuggling, and his explanation for the absence was found to be false. The appellant's interaction with Pramod Arolkar, including giving him Rs. 5,000/-, was seen as inconsistent with his duties as a Customs officer. However, the Tribunal emphasized that these actions, while suspicious, did not directly link the appellant to the smuggling act.

5. Grounds for Penalty under Section 112 of the Customs Act:
The Tribunal concluded that the evidence did not establish beyond reasonable doubt that the appellant was involved in the planning or execution of the smuggling. The mere participation in planning, without specific acts or omissions related to the smuggling, was insufficient to justify a penalty under Section 112. The Collector's conclusion that the appellant misused his influence as a Customs officer lacked supporting evidence.

Conclusion:
The Tribunal allowed the appeal, noting that the evidence against the appellant was not conclusive. The contradictions in testimonies and the lack of specific allegations regarding the appellant's role in the smuggling led to the decision to overturn the penalty imposed by the Collector.