2017 (7) TMI 231 - AT - Customs

Penalty u/s 112(a) of CA - appellant herein is a Sepoy of Central Excise - smuggling of HSD/Crude Oil - Held that - section 112 can be invoked only when there is an abetment or omission to render the goods liable for confiscation - There are no findings in the impugned order as to the omission or commission on the part of appellant to invoke provision of Section 112 (a) of the Customs Act, 1962 - adjudicating authority has accepted that there are no corroborative evidence against the appellant - appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against penalty under Section 112(a) of the Customs Act, 1962 for alleged involvement in smuggling of HSD/Crude Oil. Appellant's exoneration by Special CBI Court in related criminal case.

Analysis:

Issue 1: Penalty under Section 112(a) of the Customs Act, 1962
The appellant, a Sepoy of Central Excise, was penalized under Section 112(a) for his alleged involvement in smuggling activities. The adjudicating authority imposed a penalty of ?1000 after finding him liable under this provision. The appellant contested this penalty, arguing that the findings were incorrect. He highlighted his exoneration by the Special CBI Court in a related criminal case where he was acquitted of all charges. The CESTAT observed that the adjudicating authority's reliance on the appellant's physical presence at the scene of the offense was insufficient to prove his involvement in smuggling. The CESTAT emphasized the lack of corroborative evidence and the importance of proof over presumption or doubt. The provision of Section 112(a) requires an act or omission to render goods liable for confiscation, which was not established in this case. Given the lack of evidence and the appellant's exoneration by the CBI Court, the CESTAT held the penalty unsustainable and set aside the impugned order, allowing the appeal.

Issue 2: Exoneration by Special CBI Court
The appellant's exoneration by the Special CBI Court was a crucial aspect of the appeal. The CBI Court acquitted the appellant of all charges under various sections of the IPC, PCA, and Customs Act. The CESTAT noted that the CBI Court's judgment extinguished any perceived suspicion regarding the appellant's involvement in the smuggling activity. This exoneration played a significant role in the CESTAT's decision to set aside the penalty imposed under Section 112(a) of the Customs Act. The CESTAT emphasized the importance of legal findings in related criminal cases when assessing liability in customs matters. The appellant's acquittal by the CBI Court had a direct impact on the CESTAT's conclusion that the penalty was unsustainable and should be overturned.

In conclusion, the CESTAT, in the appellate tribunal judgment, set aside the penalty imposed under Section 112(a) of the Customs Act, 1962 on the appellant, a Central Excise Sepoy, due to insufficient evidence and the appellant's exoneration by the Special CBI Court in a related criminal case. The CESTAT emphasized the need for corroborative evidence and the impact of legal findings in criminal cases on customs matters, ultimately allowing the appeal and overturning the penalty.