2017 (6) TMI 1096 - HC - Customs

Smuggling - red sander logs - allegation against the appellant is that, he had master minded the smuggling of 538 red sander logs which had an approximate value of ₹ 80 Lakhs in the grey market - confiscation - penalty - claim of appellant was that it was only his intention to smuggle which was not put into action - Held that - The fine distinction between preparation and attempt , is in the given facts and circumstances of the case, not a distinction which is sustainable for the reason that the record shows that, the appellant had taken actions which demonstrate that the intent to smuggle the subject goods out of the Country had been put into action. There was, thus, according to us, a clear attempt to smuggle the subject goods out of the Country, which is evident from the following surrounding facts. Preparation, in our view, is a state of mind, which obtains prior to its manifestation in the form of concrete steps, which are taken to give shape to a plan which germinates in the mind, in the first instance. Once a concrete shape is given to a plan in the form of steps taken on ground, clearly an attempt to smuggle would have been made, as was the case in the instant matter. The appellant miserably failed to prosecute his case, diligently, before the Tribunal. The Tribunal, in our opinion, rightly, after granting adequate opportunities to the appellant, took the decision to decide the matter on merits - appeal dismissed - decided against appellant.

Summary

Issues:
Appeal against Judgment of Customs, Excise and Service Tax Appellate Tribunal regarding smuggling of red sander logs valued at ?80 Lakhs.

Analysis:
1. Allegation of Smuggling: The appellant was accused of masterminding the smuggling of 538 red sander logs worth ?80 Lakhs in the grey market. The appellant arranged premises for storing the logs and paid ?10 Lakhs to facilitate the smuggling operation.

2. Legal Proceedings: The Directorate of Revenue Intelligence discovered the smuggling plan and seized the red sander logs. Show cause notices were issued to the appellant and others involved. Statements were recorded under section 108 of the Customs Act, which were not retracted.

3. Confiscation and Penalty: The Adjudicating Authority confiscated the red sander logs and imposed a penalty of ?5.7 Lakhs. An amount of ?3.50 Lakhs deposited by one of the co-accused was adjusted towards the penalty imposed on the appellant.

4. Legal Arguments: The appellant raised questions of law concerning the interpretation of Section 113(d) of the Customs Act, contending that confiscation could only be ordered if there was an attempt to export the goods. The appellant argued that the seized goods were not within the customs area and no attempt to export them was made.

5. Court's Decision: The Court noted that the appellant did not raise the issue before the Tribunal, rendering the appeal on legal grounds unsustainable. The Court found that there was clear evidence of an attempt to smuggle the goods based on the actions taken by the appellant, including acquiring storage premises and paying rent.

6. Intent to Smuggle: The Court emphasized that preparation is a state of mind preceding concrete steps taken to carry out a plan. In this case, the appellant's actions demonstrated a clear attempt to smuggle the red sander logs out of the country, as evidenced by the proximity of the steps taken to the intended result.

7. Failure to Prosecute Diligently: The Court criticized the appellant for failing to prosecute the case diligently before the Tribunal. Despite granting opportunities, the Tribunal decided the matter on merits, leading to the dismissal of the appeal.

8. Conclusion: The Court found no merit in the appeal and dismissed it without costs, upholding the decision of the Customs, Excise and Service Tax Appellate Tribunal regarding the smuggling of red sander logs.