2008 (5) TMI 251 - AT - Customs

Detention of goods passenger intercepted near the exit gate of airport attempt of smuggling - concealment of watches - declaration column in the customs clearance gate pass was kept blank - passenger not tell the name of officer to whom he had approached for declaration at Red counter - declaration was not made by the passenger to the proper customs officer, u/s 77 of the Customs Act, which is essential for seeking detention of the imported goods confiscation, fine & penalty are justified

Summary

Issues Involved:
1. Declaration of goods under Section 77 of the Customs Act, 1962.
2. Alleged attempt to smuggle goods.
3. Validity of the seizure panchnama.
4. Cross-examination and procedural fairness.
5. Contradictions in statements and evidence.
6. Legitimacy of issuing a second show cause notice.
7. Burden of proof under Section 123 of the Customs Act, 1962.
8. Confiscation and penalties under Section 112 of the Customs Act, 1962.

Issue-wise Detailed Analysis:

1. Declaration of Goods:
The adjudicating authority examined whether the passenger made a declaration under Section 77 of the Customs Act, 1962. It was found that the passenger did not declare the goods on the gate pass, which was a prerequisite for seeking detention of the imported goods under Section 80. The blank gate pass and lack of signatures from the Customs Superintendent indicated no declaration was made. The passenger's inability to specify the counter number or the name of the officer further weakened his claim of having declared the goods.

2. Alleged Attempt to Smuggle Goods:
The adjudicating authority relied on the blank gate pass and the seizure panchnama to conclude that the passenger attempted to smuggle the goods. The personal search of the passenger revealed the concealment of 13 wrist watches and two mobile phones, which were not declared. The concealment and the passenger's position near the Exit Gate indicated an attempt to smuggle the goods into India.

3. Validity of the Seizure Panchnama:
The appellant challenged the authenticity of the panchnama, arguing that it was false and fabricated. However, the adjudicating authority found no inconsistency in the panchnama and the statements of the panch witnesses. The argument that the passenger was admitted to the hospital at 10 AM was refuted by hospital records showing admission at 2 PM. The adjudicating authority held that the panchnama and the panch witnesses' statements were reliable and admissible as evidence.

4. Cross-examination and Procedural Fairness:
The appellant argued that the adjudicating authority did not allow meaningful cross-examination, particularly questioning the entry of panch witnesses into a high-security area. The adjudicating authority justified the limitation on cross-examination, stating that the questions were irrelevant to the recovery and seizure of goods. The adjudicating authority provided all necessary documents and evidence to the appellants, and the decision to discontinue cross-examination was made by the appellant's advocate.

5. Contradictions in Statements and Evidence:
The adjudicating authority noted several contradictions in the passenger's statements and representations. The passenger's claims about his business, the source of air tickets, and the purpose of his travel were inconsistent and unsupported by evidence. The adjudicating authority found that these contradictions undermined the credibility of the passenger's defense.

6. Legitimacy of Issuing a Second Show Cause Notice:
The appellant contested the issuance of a second show cause notice under the same file number. The adjudicating authority justified this approach, stating that the second notice was based on new evidence interconnecting both cases. The adjudicating authority held that issuing a second notice was permissible and necessary for a comprehensive investigation.

7. Burden of Proof under Section 123 of the Customs Act, 1962:
The adjudicating authority emphasized that watches are notified goods under Section 123 of the Customs Act, 1962, and the burden of proving that the seized watches were not smuggled lay on the persons from whom they were seized. The appellants failed to provide documents indicating licit import, leading to the presumption that the watches were smuggled.

8. Confiscation and Penalties under Section 112 of the Customs Act, 1962:
The adjudicating authority confiscated the 13 wrist watches and two mobile phones seized from the passenger and imposed a penalty of Rs. 2 lakhs on him. The seven wrist watches seized from M/s. Swiss Gallery were also confiscated, with an option to redeem them on payment of a fine and applicable duties. Penalties of Rs. 50,000 each were imposed on Shri Aftab Patel and Shri Mukhtar Umer Gojaria. A penalty of Rs. 2 lakhs was imposed on Shri Abedulla Kadiwala for his complicity.

Conclusion:
The appeals were disposed of with the confiscation of the goods upheld, but with an option for redemption on payment of fines and duties. The case was remanded for expert examination of six seized watches to determine their genuineness. The penalties imposed were largely upheld, with minor adjustments based on the findings.