2017 (9) TMI 1132 - AT - Customs

Penalties u/s 112(a) and 112(b) of the Customs Act, 1962 - smuggling - Gold - Baggage Rules - it is evident that the gold was smuggled since it carries foreign markings. It may be mentioned that the smuggling always weakens the economy and the backbone of the nation. Offence is there, so the gold was rightly confiscated. The said owners who handed over the smuggled gold were not traceable inspite of the best efforts of the department. Since offence of smuggling has taken place, so, the penalty is justified but looking at the young age of the appellants and considering the fact that this is their first offence, the penalty on appellants is looking on higher side - the penalty reduced to ₹ 7 lakhs on each of the first three appellants and ₹ 12 lakhs on the fourth appellant (Sh. Lucky Raikwar) - appeal allowed - decided partly in favor of appellant.

Summary

Issues:
Levy of penalties under Sections 112(a) and 112(b) of the Customs Act, 1962 on appellants caught smuggling gold bars; Ownership of the gold bars and imposition of penalties; Modification of penalties based on the appellants' young age and first offense.

Analysis:
The case involved appeals against penalties imposed by the Commissioner of Customs under Sections 112(a) and 112(b) of the Customs Act, 1962. The appellants, caught smuggling gold bars while traveling, claimed they were merely carriers and not the owners. They stated the gold was given to them by specific individuals, but no inquiry was made from them. The penalties imposed were substantial, with the first three appellants facing a penalty of ?10,00,000 each and the fourth appellant facing a penalty of ?15,00,000.

During the hearing, the appellants argued they belonged to the lower category of society and were not the owners of the gold bars, requesting the gold's release as the owners were unidentifiable. On the contrary, the Revenue's representative justified the penalties, stating the appellants were not the owners and thus not entitled to the gold. The Tribunal noted the gold was smuggled, evidenced by foreign markings, emphasizing the detrimental impact of smuggling on the economy and the nation.

The main issue revolved around the justification of the penalties. While acknowledging the smuggling offense warranted penalties, the Tribunal considered the appellants' young age and first offense. In light of principles of equality, justice, and conscience, the Tribunal modified the penalties, reducing them to ?7 lakhs for each of the first three appellants and ?12 lakhs for the fourth appellant. This adjustment aimed to balance the penalty amount considering the circumstances, providing each appellant with a relief of ?3 lakhs.

In conclusion, the Tribunal partially allowed the appeals by modifying and reducing the penalties imposed on the appellants, considering their age and the nature of the offense.