2013 (9) TMI 351 - AT - Customs

Confiscation of goods u/s 115(2) - whether the vehicle carrying betel nuts of Third Country Origin was liable for confiscation u/s 115 (2) Held that - Department was not correct as no summon was issued to the assesse nor he was recognized as an authorized person for the said vehicle - the vehicle was carrying the offended goods thus liable for confiscation u/s 115 (2) - only when it was established that the owner or his agent was aware of the fact that the vehicle was used in the transportation of the offended goods. The appellant was not recognized as the authorized operator of the said vehicle, which is evident from the fact that his request for provisional release of the vehicle was turned down and the Power of Attorney executed by the owner in his favour was not accepted. Besides, the penalty on the appellant was based on the premise that he has failed to appear before investigating officers in spite of repeated summons issued to him, giving raise to the suspicion that he was involved in the act of smuggling. The said basis has been found to be un-true. - order of confiscation and penalty set aside. - Decided in favor of assessee.

Issues involved:
1. Confiscation of the vehicle bearing No.WB 03-3947 under Section 115 (2) of the Customs Act, 1962.
2. Imposition of penalty on the appellant under Section 112 of the Customs Act, 1962.

Analysis:

Issue 1: Confiscation of the vehicle bearing No.WB 03-3947
The case involved the interception and seizure of a consignment of Third Country Origin betel nuts loaded on a truck bearing No.WB 03-3947. The appellant, who was the brother of the owner of the vehicle, was managing the day-to-day operations of the truck under a Power of Attorney. The Commissioner had directed the confiscation of the vehicle valued at Rs.3.00 lakhs and imposed a penalty of Rs.1,50,000 on the appellant. However, it was argued that the owner of the vehicle was absolved from any knowledge of the transportation of the betel nuts, and the appellant was not recognized as an authorized operator of the vehicle. The Tribunal found that the appellant was not issued any summons to tender evidence, and the basis for imposing a penalty on the appellant was found to be incorrect. As per Section 115 (2) of the Customs Act, 1962, confiscation of the vehicle is only justified if the owner or agent is aware of the transportation of offending goods, which was not established in this case. Therefore, the Tribunal set aside the order directing the confiscation of the vehicle and imposed penalty, allowing the appeal filed by the appellant.

Issue 2: Imposition of penalty on the appellant
The appellant was penalized for not appearing to give evidence in the matter, which was later found to be incorrect as no summons were issued to the appellant. The Department acknowledged this error. The penalty on the appellant was based on the suspicion of his involvement in smuggling due to his failure to appear before investigating officers. However, it was clarified that the appellant was not recognized as the authorized operator of the vehicle, as evidenced by the rejection of his request for provisional release and non-acceptance of the Power of Attorney. The Tribunal concluded that there was no justification for the penalty imposed on the appellant, considering the lack of evidence and incorrect assumptions made by the adjudicating authority. Therefore, the order imposing a penalty on the appellant was set aside along with the direction for confiscation of the vehicle.

In conclusion, the Tribunal allowed the appeal filed by the appellant, setting aside the orders for confiscation of the vehicle bearing No.WB 03-3947 and imposition of penalty under the Customs Act, 1962. The judgment highlighted the importance of establishing knowledge and authorization in cases of confiscation and penalty under the Customs Act, ensuring fair treatment and adherence to legal provisions.

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