2017 (7) TMI 831 - AT - Customs

Smuggling - red sanders - confiscation - penalties - Held that - Incidence of seizure of the red sanders by the investigation also brought role of Shri Prabhakaran who lent his CHA licence to Shri Litheesh to aid and abet smuggling of red sanders. Both the appellants could not detach themselves from the smuggling racket. Plea of both the appellants that they were innocent could have received consideration had they brought out the illegal act to the knowledge of Customs. But they did not. The proceeding under the Customs Act, 1962 is quite different and independent of any proceeding under CHALR 2004. Appellants when failed to detach themselves from the offence and endangered the interest of Custom, they were required to be dealt under the Act. Their role was also contributory to the confiscation of smuggled goods. Therefore imposition of penalties of ₹ 5,00,00/- on each of them does not appear to be unreasonable when their role in abetting and aiding smuggling was proved by investigation successfully. The law of Customs has object to curb mischief against Customs and deter smuggling. Preponderance of probability is always in favour of Revenue. The appellants in this case were intimately connected with the smuggling racket without ascertaining the identity of exporter and owner of IEC. No authorization was obtained by them to file shipping bill. Evidence came to light proving their predetermined mind to cause loss to the exchequer - appeal dismissed - decided against appellant.

Summary

Issues: Attempted smuggling of red sanders logs, misuse of CHA license, abetment in smuggling, imposition of penalties under Customs Act, 1962

1. Attempted Smuggling of Red Sanders Logs:
The judgment revolves around the interception of three containers stacked with HDPE bags containing red sanders logs concealed under Potash Feldspar 200 Mesh. The logs, prohibited for export, were found in one container, leading to their seizure and confiscation under the Customs Act, 1962. The involvement of various individuals and entities in the attempted export, including examination by the Forest Department, was highlighted.

2. Misuse of CHA License:
The investigation uncovered the misuse of a Custom House Agent (CHA) license belonging to one individual by another to facilitate the illegal export. Statements revealed how the unauthorized use of the CHA license played a crucial role in the attempted smuggling, indicating a lack of due diligence and proper authorization in the export process.

3. Abetment in Smuggling:
Several individuals, including the owner of a shipping service and a CHA license holder, were accused of abetting the smuggling by assisting in the clearance and transportation of the containers. The judgment detailed how these individuals, despite claiming innocence, were actively involved in the process, aiding in concealing the smuggled goods and filing shipping documents without proper authorization.

4. Imposition of Penalties under Customs Act, 1962:
The appellants argued against the penalties imposed under Section 114(i) of the Customs Act, 1962, contending their innocence and lack of involvement in the smuggling. However, the Revenue maintained that the appellants were conduits in the smuggling racket, benefiting from the illegal act. The judgment upheld the penalties, emphasizing the appellants' active role in the attempted export and their failure to inform Customs about the illicit activities.

The judgment concluded by emphasizing the independent nature of proceedings under the Customs Act, highlighting the appellants' failure to detach themselves from the offense and their contributory role in the confiscation of the smuggled goods. The penalties imposed were deemed reasonable given the appellants' involvement in abetting and aiding smuggling, leading to the dismissal of their appeals.