2003 (8) TMI 283 - AT - Customs

Summary

Issues:
Four applications for waiver of pre-deposit and stay of recovery of penalty amounts under Section 112(b) of the Customs Act and Section 74 of the Gold (Control) Act.

Analysis:
The judgment dealt with four applications for waiver of pre-deposit and stay of recovery of penalties imposed on the applicants under the Customs Act and the Gold (Control) Act. The penalties were imposed by the Commissioner, and the applicants sought relief from the pre-deposit requirements. The applicants, Tejmal Gang and Himmat Singh Gang, were penalized for possession of gold seized from their residential premises. The Collector of Customs had ordered absolute confiscation of the gold, except for a few pieces, and deferred the penalty-related questions pending further examination. The Tribunal modified the confiscation order, allowing redemption of some gold pieces on payment of a fine. The Commissioner later imposed penalties on the applicants, leading to the present challenge.

The penalties were imposed under Section 112(b) of the Customs Act based on the finding that the applicants were in 'conscious possession' of the seized gold. While some gold pieces were released to another individual based on a Will, the Commissioner held the applicants responsible for possession as the gold was found in their residence. However, documents such as the Will and a judgment from a Special Magistrate's Court raised doubts about the applicants' possession of the gold. The Tribunal noted that the finding of 'conscious possession' in the impugned order was not flawless, indicating that the applicants should receive a waiver of pre-deposit and stay of recovery.

Upon examination of the evidence and the lack of departmental challenge to the finding of possession, the Tribunal concluded that the imposition of penalties based on 'conscious possession' was not firmly established. Possession of contraband gold is grounds for penalty under the Customs Act, but the finding in this case was deemed prima facie unreliable. Consequently, the Tribunal granted the applicants' request for waiver of pre-deposit and stay of recovery. The appeals were scheduled for further hearing on a later date.