2015 (2) TMI 647 - AT - Customs

Fraudulent clearance of bonded goods as ship stores - Lack of evidence - Burden of proof - Held that - It is found from the impugned order in para 5.4.1 read with para 5.4.5, the goods have duly entered the Docks as evident from the endorsement of the BPT staff on the copies of shipping bills. Further, the goods have been received in Port and payment made, which were deposited with the authorized dealer for realization. In the absence of conclusive proof of use of impugned goods in any other manner or recovery or seizure of the said goods elsewhere, it was rightly held that the goods in question are not liable for confiscation. In case of one M.V. Theresa, the goods were entered in 'A' Division Register showing the berthing of ship at 12 ldk, while the ship was berthed at 20 ldk. The adjudicating authority found that in respect of other vessel M.V. Hua Yun - 5 was shifted from one berth to another one and there exists instructions on movements of store-list and EGMs along with vessel. It shows the vessels are shifted from one berth to another quite often in view of the geographical structure and limitation of the Indira docks, Mumbai. Further, the ship can be moved to berth no. 20 ldk only after it is first berthed at 12 ldk. Further, it can certainly be registered in A Division Register, wherein the ship has been re-berthed in B Division. For this, no mala fide can be alleged or adverse view made out for supply on the bonder of ship store Due to oversight for like and alike goods, in view of the quantum of work involved, mistakes are simple and clerical in nature. Further, as regards Nil currency declaration by the concerned officer, it is within the purview of the crew and the captain of the vessel to declare the currency. This being not in the knowledge of the Bonder, it is not the issue that can be probed into by the Bonder or the officers of the customs at the particular moment. The Bonder or others cannot be held responsible for payment received in foreign currency in spite of nil declaration in the IGM. What is important is that the ship officers have acknowledged the receipt of goods and made payment for the same, which have been duly authorized by the authorized dealer on behalf of the Bonder. In all cases, the goods have entered the port area, the entry is there in the Division Register, therefore, the receipts have been given by the concerned ship authority on receipt of goods and payment realized through proper channel. Further, there being no irregularity found in the records maintained in warehouse, such allegation do not stand. - in view of the detailed findings of fact recorded by the adjudicating authority, the same being just and proper, require no interference. Further, the grounds of appeal are general in nature and no perversity in findings of fact has been pointed out or raised in the grounds of appeal. - Decided against Revenue.

Summary

Issues:
Penalty imposed under Section 117 of the Customs Act on bonder and directors, Allegations of fraudulent clearance of bonded goods, Discrepancies in shipping bills, Connivance with customs officers, Alleged removal of goods in contravention of Customs Act, Confiscation of goods, Imposition of penalties on various parties, Examination of evidence and findings by adjudicating authority, Appeal by Revenue, Cross-objections by respondents, Burden of proof in establishing clandestine removal of goods, Lack of concrete evidence in allegations.

Analysis:

1. Penalty Imposition:
The batch of appeals challenged the penalty imposed under Section 117 of the Customs Act on the bonder and two directors. The penalty was based on allegations of fraudulent clearance of bonded goods and discrepancies in shipping bills. The penal proceedings against other noticees were dropped due to insufficient evidence and benefit of doubt.

2. Allegations and Findings:
The case involved allegations of connivance with customs officers, removal of goods in contravention of the Customs Act, and potential confiscation of goods. The adjudicating authority examined the matter in detail and imposed penalties on the bonder and directors while dropping proceedings against other noticees.

3. Appeal and Cross-objections:
The Revenue appealed the decision, challenging various grounds including the lack of concrete evidence for clandestine removal of goods. The respondents raised cross-objections, emphasizing the burden of proof and the necessity for concrete and cogent evidence in establishing allegations of serious offenses.

4. Judicial Review:
Upon considering the rival contentions, the appellate tribunal upheld the impugned order, noting the detailed findings of fact by the adjudicating authority. The grounds of appeal were deemed general in nature, with no specific perversity in the findings highlighted, leading to the dismissal of Revenue's appeals and disposal of cross-objections.

5. Legal Precedents:
Legal precedents were cited regarding the burden of proof in establishing clandestine clearance and evasion of duty, emphasizing the necessity of concrete evidence for sustaining allegations of serious offenses. The tribunal found the detailed findings of the adjudicating authority just and proper, warranting no interference with the impugned order.

In conclusion, the appellate tribunal upheld the penalty imposition under Section 117 of the Customs Act, considering the detailed examination of evidence and findings by the adjudicating authority. The lack of concrete evidence for clandestine removal of goods and the general nature of the grounds of appeal led to the dismissal of Revenue's appeals and the disposal of cross-objections.