2016 (7) TMI 775 - AT - Customs

Levy of penalty for making an attempt to export of broken rice - Validity of statement of Driver the truck - Held that - Penalties have been imposed upon the Appellants with respect to seized goods under Section 114 of the Customs Act, 1962 which according to the Revenue were meant for export to Bangladesh. However, it is observed from the statement of the driver of the intercepted truck that nowhere it is stated that the seized goods were being taken out of the country to Bangladesh. As per Notification No.31/2008-CUS(NT) dated 25.03.2008, an area of 50 kms. in width from the land border with Bangladesh is treated as a specified area . On a specific query from the Bench, the Ld.AR could not explain as at which stage the goods under seizure were within 50 kms. distance from the land border with Bangladesh. In the absence of any documentary evidence, suggesting that seized goods were meant for export to Bangladesh, it cannot be held that the Appellants can be visited with penalties under Section 114 of the Customs Act, 1962. Accordingly Appeals filed by the Appellants are required to be allowed. - No penalty.

Summary

Issues:
Appeal against penalties imposed under Customs Act, 1962 for seized goods suspected to be exported to Bangladesh without sufficient evidence.

Analysis:
The Appeals were filed against penalties imposed by the Adjudicating authority and upheld by the First Appellate Authority for seized goods suspected to be exported to Bangladesh. The Appellants argued that there was no concrete evidence to support the claim that the goods were meant for export. They highlighted that the driver of the intercepted truck did not confess to the intended export, and there was a lack of corroborative evidence indicating the goods' destination. The First Appellate Authority was criticized for not providing individual findings but merely reproducing the Adjudicating authority's conclusions.

The Revenue, represented by AC(AR), contended that the seized Phensedyl Cough Linctus, a specified item under the Customs Act, 1962, required proper documentation and maintenance of statutory records. It was alleged that the Appellants created fake vouchers and invoices to mask the seized goods, indicating illegal activities.

Upon hearing both sides and examining the case records, the Tribunal noted that penalties were imposed under Section 114 of the Customs Act, 1962 based on the suspicion that the goods were intended for export to Bangladesh. However, the driver's statement did not confirm this, and there was no concrete evidence supporting the export claim. The concealment of goods and fake documentation raised suspicions of illegal activities, but these actions did not conclusively prove an intent for export. The Tribunal highlighted that violations of the Drugs & Cosmetics Act could warrant punishment under its provisions but should not serve as the basis for Customs Act penalties. The Tribunal also pointed out the lack of evidence indicating the goods were within 50 km of the Bangladesh border, as required by Notification No.31/2008-CUS(NT) for penalties under Section 114. Consequently, the Appeals were allowed, and the Appellants were granted relief.

In conclusion, the Tribunal emphasized the importance of concrete evidence to support allegations of intended export under the Customs Act, 1962. The judgment underscored the need for clear documentation and adherence to legal procedures, while also highlighting the distinction between violations of different statutes and their respective consequences.