2010 (2) TMI 832 - HC - Customs

Penalty imposed under Section 112 of the Customs Act 1962 for improper importation of goods - inculpatory statement of the petitioner and the co- accused Shymal Chakraborty the recovery of 14 gold bars from the person kept under concealment in Shri Chakraborty s shoes and the fact that the said shoe was purchased by the petitioner and was given to Shymal Chakraborty only for the purpose of carrying out the smuggling mission are also relevant factors which persuades the Court to accept that the statement was truthful and can be the basis for imposition of the impugned penalty - Held that - petitioner entered smuggling activities to augment his meagre income and was a recent entrant in the field. penalty of Rs. 1.50 lakhs deposited by the petitioner would be sufficient penalty for the crime committed as the gold has already been subjected to seizure. petition stands disposed of in terms of the above order.

Summary

Issues:
Challenge to penalty under Section 112 of the Customs Act for improper importation of goods.

Analysis:
1. The penalty imposed on the petitioner under Section 112 of the Customs Act, 1962 was challenged in the present proceeding, based on the penalty order dated 14-5-2001 of the Commissioner of Customs, which was affirmed by the Customs Excise and Gold (Control) Appellate Tribunal (CEGAT) by its order dated 25-2-2002.

2. The case involved the interception of a vehicle carrying gold bars of foreign origin, leading to the recovery of 14 gold bars from one of the passengers. The investigation revealed that the gold bars were handed to the passenger by the petitioner, who admitted his involvement in previous smuggling activities as well.

3. The petitioner argued that the recovery of gold was not made from him and his alleged involvement was based on statements obtained under duress. However, the Tribunal found that the penalty was rightly inflicted as the petitioner was involved in smuggling contraband gold, supported by the statements made by the co-accused and the petitioner himself.

4. The judgment referred to the Supreme Court case of K.I. Pavunny v. Assistant Collector, emphasizing that penalties based on statements recorded under Section 108 of the Customs Act can be justified. The Court analyzed the statements given by the petitioner and the co-accused, concluding that the statements made on the day of the seizure were relevant and truthful.

5. Additionally, the recovery of gold bars from the co-accused, the circumstances of the concealment, and the connection to the petitioner further supported the imposition of the penalty. The Court noted that the petitioner, a petty shop owner, engaged in smuggling activities to increase income, leading to a reduction in the penalty amount to Rs. 1.5 lakhs from Rs. 2 lakhs.

6. Ultimately, the Court upheld the penalty imposed on the petitioner, considering the evidence and circumstances of the case, while reducing the penalty amount due to the petitioner's background and the seizure of the gold bars.