2015 (12) TMI 1093 - AT - Customs

Smuggling of goods - export of the smuggled zirconia into India from Malaysia by a premeditated design - Confiscation of goods - undeclared goods - Held that - It is surprising that show cause notice does not reveal any incriminating evidence against M/s. Carvel Shipping Services Pvt. Ltd. Therefore, in absence of justifiable ground by Revenue in its appeal, it is very difficult at this stage to implead M/s. Carvel Shipping Services Pvt. Ltd. as respondent. Therefore, Revenue s appeal against M/s. Carvel Shipping Services Pvt. Ltd. is dismissed. But it does not mean to say that there was no smuggling racket operated to occasion export of the smuggled zirconia into India from Malaysia by a premeditated design. - there was a smuggling racket operated to bring cubic zirconium into India. It is also shocking to note that there was a total failure of investigation to conduct proper investigation in India and overseas. Spirit and intent of section 11 of the Customs Act, 1962 was burried causing prejudice to the interest of customs without bringing the members of smuggling racket to the fold of law. When the investigating authority as well as adjudicating authority failed in their duty to bring necessary parties to the fold of law, it is not possible at appellate stage to implead them and press them to undergo trial. M/s. Caravel Shipping Services Pte. Ltd. was neither issued show cause notice nor was adjudicated. There appears lapse on the part of adjudicating authority to keep this concern out of purview of adjudication. No efforts were made by investigation to identify the members of the smuggling racket. Authority failed to conduct overseas enquiry against the racket and no thorough investigation was made into the affairs of CHA, freight forwarder as well as the consignee and there was only pretence to justice by investigation following an empty formality to pass a superfluous adjudication order. - No doubt there was confiscation. But that is merely a consolation to this country when the racket and mastermind behind that remained in mystery and unidentified. Facts and circumstances of the cases suggest that there was premeditated design to cause subterfuge to Revenue. It is high time to arrest smuggling, without encouraging that to perpetuate. - Decided against Revenue.

Summary

Issues:
1. Appeal against Adjudication Orders dated 18.2.2009 and 25.2.2009.
2. Smuggling of goods in two containers from Malaysia to India.
3. Confiscation and seizure of undeclared goods.
4. Involvement of various parties - consignees, shipping services, and CHA.
5. Failure of investigation and adjudication to identify the smuggling racket.
6. Exoneration of respondents from penal consequences.
7. Dismissal of Revenue's appeals.

Analysis:

1. The appeal was made against Adjudication Orders dated 18.2.2009 and 25.2.2009 concerning the smuggling of goods in two containers from Malaysia to India. The containers contained undeclared goods, leading to confiscation and seizure by customs authorities.

2. The investigation revealed that the containers had excess packages of goods not declared to customs, including cubic zirconium stones concealed in biscuit tins. The consignees claimed innocence, stating they were unaware of the undeclared items.

3. The adjudication resulted in the confiscation of cubic zirconium stones and other goods. The involvement of various parties, including consignees, shipping services, and Customs House Agents (CHAs), was examined. Some parties were found innocent, while others were implicated in the smuggling operation.

4. Revenue raised concerns about the failure to penalize certain parties involved in the smuggling operation, including shipping services and CHAs. They argued for penalties against all respondents implicated in the case.

5. The respondents, represented by their advocates, pleaded innocence. The adjudicating authority exonerated all respondents from penal consequences, citing a lack of evidence linking them to the smuggling racket.

6. Revenue's appeals were dismissed due to insufficient grounds and lack of incriminating evidence against certain parties. The investigation and adjudication process were criticized for failing to identify the smuggling racket's masterminds and properly prosecute those involved.

7. The judgment highlighted the need for thorough investigations and enforcement actions to combat smuggling effectively. It called for the Department to address the lapses in the investigation and take appropriate measures to prevent future smuggling activities.

By dismissing the appeals, the court emphasized the importance of upholding customs laws and preventing smuggling activities to protect national interests and revenue.