2009 (6) TMI 830 - AT - Customs

Confiscation of goods - Misdeclaration - Penalty on proprietor of supplier-firm - Imposition of

Summary

Issues Involved:
1. Confiscation of goods under Section 111(d), (l), and (m) of the Customs Act, 1962.
2. Imposition of penalties under Section 112(a) and 112(b) of the Customs Act, 1962.
3. Validity of the seizure and subsequent proceedings.
4. Role and liability of various individuals involved in the alleged smuggling activities.
5. Department's appeal against the dropping of penal proceedings against Shri Vishnu Kumar.

Detailed Analysis:

1. Confiscation of Goods:
The primary issue was whether the goods seized from the speed post center were liable for confiscation under Section 111(d), (l), and (m) of the Customs Act, 1962. The seized parcels lacked a proper customs declaration, which is a requirement under Section 82 of the Customs Act and Notification No. 78-Cus., dated 2-4-1938. The Tribunal held that the absence of such a declaration rendered the goods liable for confiscation as they were imported contrary to prohibitions imposed under Section 11 of the Customs Act. The Tribunal rejected the argument that the goods were seized before being sorted by customs, affirming their confiscation.

2. Imposition of Penalties:
Penalties were imposed on various individuals under Section 112(a) and 112(b) of the Customs Act. The Tribunal upheld the penalties on Shri Sandeep Sehgal, Shri Rajesh Kumar, and Shri Kishori Lal, citing their active involvement in the illicit importation and clearance of dutiable goods without payment of duty. However, the penalty on Shri Joginder Gulati was set aside due to a lack of evidence showing his involvement beyond being a supplier.

3. Validity of Seizure and Proceedings:
The Tribunal addressed the argument that the goods were seized before being handed over to customs for examination. It was held that the seizure was valid as the goods were imported without the required customs declaration, making them liable for confiscation under Section 111(d) of the Customs Act. The Tribunal emphasized that the omission of the declaration was not innocent and facilitated the illicit clearance of the parcels.

4. Role and Liability of Individuals:
- Shri Sandeep Sehgal: As the proprietor of M/s. B.T., he was found liable for the illicit importation of goods and was penalized accordingly.
- Shri Rajesh Kumar: The Customs Inspector was found to have actively abetted the illicit clearance of goods and was penalized.
- Shri Kishori Lal: The Postal Clerk was also found to have played a central role in the illicit clearance and was penalized.
- Shri Vishnu Kumar: Initially exonerated by the Commissioner, the Tribunal found that he had abetted the illicit activities by informing Shri Kishori Lal about the arrival of parcels and imposed a penalty of Rs. 10,000 on him.

5. Department's Appeal Against Shri Vishnu Kumar:
The Department's appeal challenged the dropping of penal proceedings against Shri Vishnu Kumar. The Tribunal found that Shri Vishnu Kumar had indeed played a crucial role in the illicit clearance of parcels by informing Shri Kishori Lal about their arrival. Consequently, the Tribunal imposed a penalty of Rs. 10,000 on him, setting aside the Commissioner's order that had exonerated him.

Conclusion:
The Tribunal upheld the confiscation of the goods and penalties on Shri Sandeep Sehgal, Shri Rajesh Kumar, and Shri Kishori Lal. The penalty on Shri Joginder Gulati was set aside due to insufficient evidence of his involvement. The Tribunal also imposed a penalty on Shri Vishnu Kumar, reversing the Commissioner's decision to drop proceedings against him. The appeals of Shri Sandeep Sehgal, Shri Rajesh Kumar, and Shri Kishori Lal were dismissed, while the appeal of Shri Joginder Gulati was allowed. The Department's appeal against Shri Vishnu Kumar was also allowed.