2017 (12) TMI 37 - AT - Customs

Penalty - smuggling - The importer had declared 13 types of Wanli brand radial car tyres conforming to BIS standards and each bearing MRP, whereas, intelligence suggested that cargo contained branded tyres, without marking of MRP / BIS certification as required under law, for motor vehicles without declaring them with their correct value with the intent to evade customs duty - Held that - Shri Inderjeet Singh was found actively involved in arranging an official address for Shivani Industries. He was also found to be the defacto importer arranging for CHA clearance, handling correspondence with shipping line, arranging forged indemnity bond, etc. The KYC documents were submitted to CHA by Inderjeet Singh. The above evidences clearly substantiate the role played by Shri Inderjeet Singh in the smuggling of goods - penalty on Shri Inderjeet upheld. Penalty on H.S. Chadda - Held that - The investigation by the Department has established that Shri H S Chadha was the mastermind behind the smuggling of goods. He was administratively and financially controlling and supervising the whole scheme of things right from obtaining the IEC in the name of Shivani Industries through Inderjeet Singh. He was found to be closely monitoring all developments in the act of smuggling. He also mislead the department by providing false credentials of the supplier firm in Dubai From the fact that the details of all smuggled goods were found in Shri Chadha s computer seized by the officials and also the fact that photos of the smuggled goods were taken with his mobile phone clearly proves that he was actively involved in the outright smuggling of goods for which Shivani Industries was the front - penalty upheld. Appeal dismissed - decided against appellant.

Summary

Issues:
Smuggling of goods, mis-declaration, customs duty evasion, confiscation of goods, penalties under Customs Act, involvement of individuals in smuggling racket, imposition of penalties on involved parties, role of Customs House Agents (CHA), mastermind behind smuggling, evidence from seized devices.

Analysis:
1. Smuggling of Goods and Mis-declaration:
- Intelligence revealed mis-declaration in a container's contents, leading to the discovery of concealed cigarettes and whisky along with branded tyres without proper markings.
- Goods were seized under the Customs Act for being liable to confiscation due to evasion of customs duty and mis-declaration.

2. Involvement of Individuals in Smuggling Racket:
- Investigation uncovered a smuggling racket masterminded by one individual along with an employee, involving enticing others to open firms for smuggling activities.
- Evidence from seized devices linked individuals to the smuggling scheme, establishing their roles in the illegal activities.

3. Penalties and Confiscation:
- Penalties were imposed on individuals involved in the smuggling racket under section 112(a) of the Customs Act.
- Confiscation of goods was carried out, with an option for redemption by paying fines, based on re-assessment of assessable values.

4. Role of Customs House Agents (CHA):
- CHA and G Card Holder were initially penalized for their involvement in filing bill of entries based on documents from the importer, but subsequent investigations found no evidence of their direct involvement in smuggling.
- Penalties imposed on CHA and G Card Holder were set aside due to lack of evidence linking them to the smuggling activities.

5. Mastermind Behind Smuggling:
- The alleged mastermind behind the smuggling operation was found to be administratively and financially controlling the illegal activities, misleading authorities and closely monitoring the smuggling operations.
- Penalties imposed on the mastermind were sustained based on clear evidence linking him to the smuggling activities.

6. Evidence from Seized Devices:
- Data retrieved from seized laptops and mobile phones provided crucial evidence linking individuals to the smuggling activities, establishing their active roles in the illegal operations.
- Statements and documents retrieved from the devices corroborated the involvement of key individuals in the smuggling racket.

7. Conclusion:
- The impugned order was sustained, leading to the dismissal of all appeals due to the established involvement of individuals in the smuggling racket and the imposition of penalties under the Customs Act.
- The judgment highlighted the importance of evidence, role clarity, and penalties in combating smuggling activities effectively.

[Order Pronounced in the open court on 27.10.2017]