2012 (6) TMI 104 - AT - Customs

Plea for waiver of pre-deposit of duty and penalty imposed on applicants on ground of their role in regard to smuggling of Red Sanders wood of Indian origin - absolute confiscation of goods - Held that - From facts it is clear that when the container containing the Red Sanders was intercepted, both the Applicants(employees of Jain Logistics) left the Office after handing over the keys to an unknown person and after handing over the unaccounted cash on the next day of the seizure, as per the direction of Director of M/s. Jain Logistics. Therefore, their role cannot be ruled out in the abetment of smuggling of Red Sanders. Further, since they could not produce any documentary evidence in support of their claim for financial hardships, therefore, applicants are directed to predeposit 10% of penalty in each case within eight weeks.

Summary

Issues:
1. Waiver of predeposit of penalty under Section 114 of the Customs Act, 1962 for employees of a logistics company involved in the smuggling of Red Sanders wood.

Analysis:
The judgment revolves around the application for waiver of predeposit of penalty of Rs.2,00,000/- each under Section 114 of the Customs Act, 1962 by employees of a logistics company involved in the smuggling of Red Sanders wood. The Applicants contended that they were only employees of the logistics company and had no direct role in the smuggling activity. They relied on legal precedents to support their claim for waiver. On the other hand, the Revenue argued that the employees were complicit in the smuggling based on the evidence provided in the show cause notice and the Order-in-Original. The Tribunal noted that the goods were absolutely confiscated, and the property vested in the Central Government upon confiscation, making it difficult to waive the predeposit requirement. The Tribunal analyzed the statements of the employees recorded under Section 108 of the Customs Act, highlighting their involvement in the logistics of the smuggling operation as directed by their boss. The Tribunal concluded that the employees had abetted the smuggling activity and were liable for penal action under Section 114(i) of the Customs Act, 1962.

Financial Hardship and Compliance:
Regarding the financial condition of the Applicants, the Tribunal noted that they claimed to be earning meager salaries but failed to provide documentary evidence to support their financial hardships. Consequently, the Tribunal directed the Applicants to predeposit 10% of the penalty in each case within eight weeks and report compliance by a specified date. The judgment emphasized the employees' involvement in the smuggling operation based on their actions and directions from their superior, leading to the decision not to grant a total waiver of the predeposit of penalty. The Tribunal's decision was based on a detailed analysis of the legal provisions, evidence presented, and the lack of sufficient proof of financial hardship by the Applicants.