2008 (1) TMI 348 - AT - Customs

Smuggling - Cubic Zircona silver chain - No evidence adduced by Appellant at the spot (exit gate of airport) or thereafter to prove legal importation of the seized goods - Appellant s active involvement in smuggling was not ruled out by any evidence. Valuation of goods was also not contradicted by any cogent evidence confiscation is justified in view of revaluation ordered by Commissioner redemption fine reduced - Involvement of officers of custom department not proved penalty set aside

Issues Involved:
1. Confiscation of goods and imposition of penalties on the first appellant.
2. Imposition of penalties on the second and third appellants, who are customs officers.

Issue-wise Detailed Analysis:

1. Confiscation of Goods and Imposition of Penalties on the First Appellant:

The first appellant arrived at Netaji Subhash Ch. Bose International Airport, Kolkata, from Bangkok on 19-9-2003. He was found in possession of two black zipper bags, one of which contained approximately 45.486 Kgs of Cubic Zirconia and 5.1 Kgs of silver chain. These items were detected by x-ray at the exit gate and were seized due to the absence of evidence proving legal importation. The appellant failed to produce any evidence or disclose the identity of the persons for whom he was carrying the goods.

The investigation included visits to the appellant's local address and native place, revealing his insolvency and lack of involvement in legitimate trade. He was arrested on 20-9-2003 and remanded to judicial custody. During interrogation, he admitted to bringing goods from Bangkok and selling them to certain individuals but failed to provide their addresses. He also admitted to having no evidence to prove the legal import of the seized goods.

A letter received by the Department from one Shri Bhola Yadav, containing photocopies of invoices, was later disowned by Yadav, who claimed he was misled into signing it. Further inquiries revealed that the appellant's solvency was limited, and he did not own the seized goods.

The adjudicating authority concluded that the cubic zirconia and silver chain were smuggled goods and imposed a penalty of Rs. 2,00,000/- under Section 112(a) and 112(b) of the Customs Act, 1962. The appellant was granted the option to redeem the seized goods by depositing a redemption fine of Rs. 10,00,000/-. The authority discarded the appellant's plea that another passenger had exchanged the bags at the exit gate.

2. Imposition of Penalties on the Second and Third Appellants, Customs Officers:

The second and third appellants, customs officers, were charged with helping the first appellant escape with smuggled goods. They were penalized Rs. 50,000/- each under Section 112(b) of the Customs Act, 1962. The adjudicating authority found that they had harbored the first appellant in committing the offense by accepting the baggage as his without proper verification.

The defense argued that there was no evidence to prove the involvement of the second and third appellants. They claimed to have discharged their duties in good faith and examined the bags presented to them, which did not contain the seized goods. The Department failed to prove that the bag examined by these officers was the same as the one seized at the exit gate. No inquiry was conducted with the Airport Authority or Air Ticket issuing Agency to trace whether any baggage ticket was issued to the first appellant.

The tribunal found that the first appellant never revealed the involvement of the second and third appellants during multiple interrogations. The Department could not establish a live link among the three individuals or prove a conspiracy. The tribunal concluded that there was no direct, cogent, and credible evidence against the second and third appellants. Therefore, the penalties imposed on them were waived.

Conclusion:

The tribunal upheld the confiscation of the goods and the penalty imposed on the first appellant but reduced the redemption fine from Rs. 10 lakhs to Rs. 2 lakhs. The penalties on the second and third appellants were waived due to the lack of evidence proving their involvement in the smuggling act. The decision was made solely based on the material before the tribunal and without prejudice to any departmental proceedings against the second and third appellants.

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