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Issues:
1. Imposition of penalty on a partnership firm and its partner under Section 114 of the Customs Act, 1962 based on intercepted goods containing sandalwood powder. Analysis: The case involved appeals against an order imposing penalties on a partnership firm and its partner under Section 114 of the Customs Act, 1962, due to intercepted goods containing sandalwood powder instead of the declared turmeric powder for export. The adjudicating authority concluded that the appellants rendered the goods liable for confiscation under Section 113 of the Customs Act, leading to the penalty imposition. The appellant's representative argued that the penalties were based on presumptions and assumptions, highlighting that the appellants had legitimately purchased "Agarbatti powder" from a manufacturer with proper invoices. They held a license to export such goods, questioning the lack of evidence linking them to the misrepresented goods. The representative contended that relying solely on the statement of a co-accused was improper, citing legal precedents to support their argument. On the contrary, the Departmental Representative (D.R.) argued that the statement of the main noticee established a clear connection between the main noticee and the appellants, suggesting that the appellants used this method to circumvent restrictions and exploit their export license. The D.R. emphasized the evidentiary value of statements under Section 108 of the Customs Act, stating that corroboration was unnecessary. After considering both sides' submissions and examining the records, the judge found that the appellants held a valid license to export sandalwood powder, supported by years of legitimate exports. The judge noted that the appellants had provided extensive documentary evidence, including invoices and certificates from the supplier, corroborating their legitimate transactions. Critically, the judge highlighted the failure of the adjudicating authority to consider this compelling evidence and over-reliance on the co-accused's statement without corroborative evidence, which could lead to a miscarriage of justice. Consequently, the judge set aside the penalties imposed on the appellants, emphasizing the importance of proper evidence and due process in penalizing individuals under the Customs Act, 1962.
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