2003 (8) TMI 321 - AT - Customs

Summary

Issues:
Imposition of penalty under Section 112(a) and (b) of the Customs Act for missing consignments.

Analysis:
The appeal was filed against an order imposing a penalty of Rs. 2 lakhs on the appellants under Section 112(a) and (b) of the Customs Act for missing consignments. The goods arrived from Singapore, misdescribed as books/printed matter, were found to contain prohibited electronic goods. The consignments were kept in the custody of the appellants, but four consignments went missing. The consignee was fictitious, and prior importers disowned connection with the goods. The appellants argued they took precautions, reported to the police, and should only pay duty on missing goods, not a penalty. The Commissioner imposed the penalty, leading to the appeal.

The appellants contended that only duty could be demanded for violating Section 45(2) without findings on confiscation in the order. They argued there was no evidence of negligence leading to the disappearance of the consignments. The appellants cited legal precedents to support their case. The respondent reiterated the correctness of the order, stating that missing goods implied negligence, making the custodians liable for a penalty. Legal precedents were cited to support this argument.

The Tribunal found that the appellants were custodians of the goods and failed to produce four consignments for examination, with one produced containing prohibited goods. The consignee was fictitious, and the missing goods were dutiable. The Tribunal rejected the appellants' claim of no negligence, inferring a security lapse and connivance in the disappearance. The Tribunal held that the penalty under Sections 112(a) and (b) was justified, along with duty payment under Section 45.

The Tribunal dismissed the appeal, upholding the penalty imposed on the appellants. It rejected the argument that only duty could be demanded, stating the provisions of Sections 112(a) and (b) were applicable due to abetting in the removal of goods without payment. Legal precedents cited by both sides were analyzed, with the Tribunal finding the appellants liable for penalty due to proven negligence and deliberate actions leading to the disappearance of the goods.

In conclusion, the Tribunal upheld the penalty imposed on the appellants, emphasizing their custodial responsibility and the seriousness of the security lapse. The legal arguments presented by both parties were considered, with the Tribunal finding no illegality in the order and dismissing the appeal.