2018 (9) TMI 1944 - CGOVT - Customs

Reduction in the quantum of penalty - illegal import of Samsung TV - Gold bars - revision application is filed mainly on the ground that the penalty on the applicant has been wrongly upheld in Order-in-Appeal even when he did not do any act or omission in regard to illegal importation of gold - HELD THAT - It is evident that the applicant does not deny his role with regard to illegal import of Samsung TV, but has vehemently asserted that he was not aware about the gold bars hidden in the TV Stand when it was brought by him from Thailand to India for an amount of ₹ 5,000/- to be given by the person at the Delhi Airport after delivery of the TV to him. Accordingly, the applicant has prayed that penalty of ₹ 5 lakhs which was reduced by the Commissioner (Appeals) from the original penalty of ₹ 10 lakhs is too harsh and should be reduced by considering his involvement in the illicit importation of TV only. Whereas the Government finds that the penalty of ₹ 10 lakhs/5 lakhs are imposed by the lower authorities by assuming that the applicant was fully aware regarding hiding of gold bars in the TV stands and thus the applicant was directly involved in the smuggling of all goods, including gold bars. However after detailed examination of all the facts narrated in the Order-in-Original and the Order-in-Appeal, it clearly emerges that there is no evidence in this case to establish that the applicant was aware about the secretion of gold bars in the TV stand. The applicant s main fault is apparently that he agreed to carry the TV along with him out of his greed to earn extra ₹ 5,000/- to meet his expenses incurred towards visiting Thailand and this weakness was cleverly used by Mr. Parveen in Bangkok to dupe the applicant to believe that he was to carry the TV only along with him for ₹ 5,000/- which could be covered in the baggage free allowance. The department s case is also not that the applicant is a frequent flier or a repeated offender and no concrete evidence is adduced that the applicant was knowingly or consciously involved in the smuggling of gold. Taking all these relevant facts into account, the Government considers it appropriate that the applicant should be held accountable only for carrying TV in India and not for illicit importation of gold bars by hiding in the TV stand which was known to Mr. Parveen in Thailand and Mr. Pramod Saini in India only and not the applicant. Penalty under Section 11AA of Customs Act, 1962 - HELD THAT - No such false declaration, etc., was made by the applicant and rather the case against the applicant is that he did not declare the TV to the Customs authorities for which Section 112 is appropriately attracted. Therefore, the justice and fairness demands that penalty of ₹ 25,000/- will be sufficient under Section 112 of the Customs Act on the applicant in this case for carrying the TV for ulterior design of smuggling of TV for monetary consideration. Revision application disposed off.

Summary

Issues:
1. Penalty imposition under Section 114AA of the Customs Act.
2. Applicant's awareness of gold bars hidden in TV stand.
3. Applicability of penalty under Section 11AA of Customs Act.
4. Just penalty imposition under Section 112 of the Customs Act.

Analysis:
1. The primary issue in this case revolves around the penalty imposition under Section 114AA of the Customs Act. The applicant contested the penalty upheld by the Commissioner of Customs (Appeals) on grounds of lack of involvement in the illegal importation of gold. The Government found that lower authorities assumed the applicant's full awareness of the gold bars hidden in the TV stand, implicating him in smuggling. However, detailed examination revealed no evidence establishing the applicant's awareness of the gold bars, supported by statements from involved parties. Consequently, the Government deemed the penalty imposition unjust and concluded that the applicant should only be held accountable for carrying the TV, not for the illicit importation of gold bars.

2. Another crucial issue was the applicant's awareness of the gold bars concealed in the TV stand. The applicant vehemently denied knowledge of the gold bars, asserting that his mistake was limited to carrying the TV for a small sum offered to him. Various factors, including statements from involved individuals and the absence of evidence linking the applicant to the gold bars, supported the applicant's claim of unawareness. The Government's analysis highlighted the applicant's lack of ownership of the gold bars upon recovery and the absence of any claim for redemption, reinforcing the conclusion that the applicant was not cognizant of the gold bars hidden in the TV stand.

3. The case also addressed the applicability of penalty under Section 11AA of the Customs Act. The Government concurred with the applicant's argument that this penalty was not maintainable in the absence of false declaration or statement documents. Instead, the case against the applicant pertained to non-declaration of the TV to Customs authorities, warranting the application of Section 112 of the Customs Act. Consequently, a just penalty of ?25,000 under Section 112 was deemed appropriate for the applicant's involvement in carrying the TV for smuggling purposes.

4. In conclusion, the Order-in-Appeal was modified, and the revision application was allowed to the extent of reducing the penalty imposed on the applicant. The judgment underscored the importance of evidence and fair application of penalties under relevant sections of the Customs Act, ensuring accountability while safeguarding against unjust impositions based on unsubstantiated assumptions.