2017 (9) TMI 396 - AT - Customs

Smuggling - Baggage Rules - 5000 grams of Iridium metal procured from illegal channels and smuggled into India - Confiscation - penalty - release of petitioner on Bail - case of Revenue is that the Iridium metal in 5 bottles having collective gross weight of 5500 gms. and provisionally valued at ₹ 1 Crore was seized under panchanama dated 23.09.2011 under the reasonable belief that it was smuggled into India and hence liable for confiscation under the provisions of the Customs Act, 1962 - Held that - the Revenue have failed to exercise jurisdiction vested in them, as investigating officers failed to make inquiries and/or record statement from KPS who was found to be kingpin - also, there was strong presumption, in view of the circumstantial evidence, and seizure of Iridium, which as per the Revenue is not available normally in India in such large quantity. As such based on assumption and strong presumption, the Revenue have held that the seized Iridium is smuggled, originated from outside India and brought into India by way of smuggling - Considering the totality of evidence brought on record it is evident that aal the three appellants were in league and have aided and abetted in possession and carriage of Iridium metal. All the three appellants have failed to explain adequately the source of acquisition of Iridium metal from any licit source within the country and as such the conclusion by Revenue that it is smuggled, is upheld. Further, in view of the factum of smuggling been proved by way of circumstantial evidence only, as the Revenue failed to interrogate the said KPS, the penalty imposed under Section 112(a) of the Act is on higher side - the penalty imposed, on Mr. KPS penalty is reduced from ₹ 30 lakhs to ₹ 5 lakhs and on Mr. Ravinder Singh from ₹ 20 lakhs to ₹ 2 lakhs and Mr. Bhupinder Singh from ₹ 20 lakhs to ₹ 50,000/-. Appeal allowed - decided partly in favor of appellant.

Summary

Issues Involved:
1. Absolute confiscation of seized goods.
2. Confiscation of tools used for concealment.
3. Imposition of penalties on individuals under Section 112(a) of the Customs Act, 1962.
4. Validity of retraction statements.
5. Procedural aspects of investigation and evidence collection.

Issue-wise Detailed Analysis:

1. Absolute Confiscation of Seized Goods:
The Commissioner of Customs ordered the absolute confiscation of the seized 'Iridium metal' weighing 5007.41 grams valued at ?86,51,083/- under Section 111 (i), 111 (j), and 111 (l) of the Customs Act, 1962. The Tribunal upheld the confiscation, concluding that the appellants failed to provide adequate explanations regarding the licit source of the Iridium metal, thus supporting the Revenue's conclusion that the goods were smuggled.

2. Confiscation of Tools Used for Concealment:
The Commissioner also ordered the confiscation of SMD Rework Stations and tools used for concealing the smuggled 'Iridium' under Section 119 of the Customs Act, 1962. The Tribunal agreed with this confiscation, noting that the tools and rework stations were used to conceal the smuggled goods.

3. Imposition of Penalties on Individuals under Section 112(a) of the Customs Act, 1962:
Penalties were imposed on three individuals: ?30,00,000/- on Mr. KPS, ?20,00,000/- on Mr. Ravinder Singh, and ?20,00,000/- on Mr. Bhupinder Singh. The Tribunal found that the penalties were on the higher side and reduced them to ?5,00,000/- for Mr. KPS, ?2,00,000/- for Mr. Ravinder Singh, and ?50,000/- for Mr. Bhupinder Singh, considering the circumstantial evidence and the involvement of each individual.

4. Validity of Retraction Statements:
Both Mr. Bhupinder Singh and Mr. Ravinder Singh retracted their initial statements, alleging coercion and duress. The Tribunal found these retractions to be an afterthought, motivated to escape legal consequences, as no complaints were made before the magistrate when they were initially produced. The retraction letters were also found to be under legal advice, thus lacking credibility.

5. Procedural Aspects of Investigation and Evidence Collection:
The Tribunal noted that the Revenue failed to record statements from Mr. KPS, who was identified as the kingpin. Despite this, the circumstantial evidence, including call data records and the coordinated actions of the appellants, supported the conclusion that the Iridium was smuggled. The Tribunal also addressed the appellants' claims of procedural irregularities, finding no malaise in the drawing of the panchanama or the sealing of the seized goods.

Conclusion:
The Tribunal upheld the confiscation of the Iridium metal and the tools used for its concealment. It found the retraction statements to be unconvincing and motivated by legal advice. While recognizing procedural shortcomings in the investigation, the Tribunal reduced the penalties imposed on the appellants, acknowledging the circumstantial evidence of smuggling but considering the extent of each appellant's involvement. The appeals were thus allowed in part, with reduced penalties.