2013 (2) TMI 679 - AT - Customs

Confiscation u/s 113(d) 113(i) - Penalty u/s 114(i) and 114AA - Levy of fine - Appellant did not dispute he allegations in the show cause notice nor the findings given by the adjudicating authority - Appellant plead only for leniency in the matter of imposition of fine and penalty - Violation of principle of natural justice - Held that - As far as the goods seized at the Air Cargo Complex, Sahar is concerned, the appellant Mr. Pradeep Dhond had declared the goods as 1360 kgs. of Lead Acetate Commercial Grade with an FOE value of ₹ 3,81,017.60. However the goods were found to be 116.400 kgs. of Amphetaminil, 320.600 kgs. of norephedrine hydrochloride totally valued at ₹ 1,10,25,000/- and 842.400 kgs of Lead Acetate valued at ₹ 2,10,600/-. Thus there is clear misdeclaration of both the description and value of the goods. Therefore, the provisions of 113(i) of the Customs Act is clearly attracted. Secondly the goods were sought to be exported using the IEC code of M/s. KLM Exports India without their knowledge. Thus violation of Section 7 of FTDR Act and Rules 12 and 14 of Foreign Trade (Regulations) Rules, 1993 is also established. The goods were brought within the customs area for the purpose of being exported. Thus the provisions of Section 113(d) are also attracted. Therefore, the confiscation of the goods is justified. Consequently penalty under Sections 114 and 114AA are also attracted. Regarding the goods seized at the transporter s premises and the office premises of the appellant, confiscation has been proposed under Section 113(d). For confiscation under the said section, either there should be an attempt to export the goods or the goods should have been brought within the customs area for the purposes of export. Both these conditions are not satisfied in respect of these goods. Therefore, we set aside the confiscation, imposition of fine and penalty in respect of these goods as unsustainable in law. Adjudicating authority has dealt with this matter quite extensively. The allegation against the appellant has been very clearly established by the export documents seized, test reports on the nature of the goods, the statements of Satish Parab, the person who organized for the clearance of goods for export, Ankush Mohite, employee of the appellant, Ajay P. Singh, the transporter, officers of the CHA firm and the Airlines through whom the cargo was sought to be exported. None of these statements have been retracted and all of them along with the documents seized clearly establish the charge against the appellant Sri Pradeep Dhond. - Decided partly in favour of assessee.

Issues Involved:
1. Confiscation of goods under Section 113(d) and 113(i) of the Customs Act.
2. Imposition of fine and penalty under Sections 114 and 114AA of the Customs Act.
3. Alleged violation of principles of natural justice due to denial of cross-examination of witnesses.

Issue-wise Detailed Analysis:

1. Confiscation of Goods under Section 113(d) and 113(i) of the Customs Act:

The Directorate of Revenue Intelligence (DRI) intercepted a tempo at the Air Cargo Complex, Sahar, Mumbai, containing 80 drums supposedly of lead acetate. However, 28 drums tested positive for "Amphetamine." Further searches revealed additional quantities of amphetamine and other substances. The samples were analyzed, and it was found that the goods were norephidrine hydrochloride, amphetaminil, ethyl amphetamine, and phenyl propanolamide, which were not covered under the NDPS Act but were misdeclared as lead acetate. Consequently, the goods were re-seized under the Customs Act for misdeclaration.

The appellant, Mr. Pradeep Dhond, had declared the goods as 1360 kgs of Lead Acetate Commercial Grade, but the actual goods were 116.400 kgs of Amphetaminil, 320.600 kgs of norephedrine hydrochloride, and 842.400 kgs of Lead Acetate. This clear misdeclaration of description and value of the goods invoked the provisions of Section 113(i) of the Customs Act. Additionally, the goods were sought to be exported using the IEC code of M/s. KLM Exports India without their knowledge, violating Section 7 of the FTDR Act and Rules 12 and 14 of the Foreign Trade (Regulations) Rules, 1993, thus attracting Section 113(d) of the Customs Act.

2. Imposition of Fine and Penalty under Sections 114 and 114AA of the Customs Act:

The adjudicating authority imposed fines and penalties based on the misdeclaration and attempted export of prohibited goods. The quantum of fine was 25% of the value of the goods seized, and the penalty was 10% of the value under Section 114 and 5% under Section 114AA. Considering the gravity of the offense, the Tribunal found the fines and penalties reasonable and upheld them.

Regarding the goods seized at the transporter's premises and the office premises of Mr. Dhond, the Tribunal found that the conditions for confiscation under Section 113(d) were not satisfied as there was no attempt to export the goods or bring them within the customs area for export. Therefore, the confiscation, fine, and penalty for these goods were set aside as unsustainable in law.

3. Alleged Violation of Principles of Natural Justice:

The appellant contended that the principles of natural justice were violated due to the denial of cross-examination of witnesses. However, the adjudicating authority had dealt with this matter extensively. The allegations against the appellant were established through export documents, test reports, and statements from various individuals involved in the attempted export. These statements were not retracted, and the evidence was sufficient to prove the charge against Mr. Dhond. Therefore, the Tribunal did not find merit in the appellant's contention regarding the denial of cross-examination.

Conclusion:

The Tribunal upheld the confiscation of the goods seized at the Air Cargo Complex, Mumbai, under Sections 113(d) and 113(i) of the Customs Act, along with the imposition of fine and penalty under Sections 125, 114, and 114AA. However, the confiscation, fine, and penalty for the goods seized at the transporter's premises and the office premises of Mr. Dhond were set aside as unsustainable in law. The appeals were disposed of accordingly.

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