2018 (3) TMI 1555 - AT - Customs

Smuggling - Mis-declaration of Confectionery goods - illegal export - N/N. 35/2008-Custom (NT) dated 02.04.2008 - Held that - it is observed by the Adjudicating authority that they had sold the bulk quantity of Phensedyl Cough Linctus to the unscrupulous persons who had diverted the same through the smuggling channel and the Distributors had prepared the fictitious/bogus Sales details to cover up their involvement in the instant act of smuggling - the appellant s herein are acting on behalf of the Syndicate of smuggling of Phensedyl Cough Linctus. Demand upheld - Appeal dismissed - decided against appellant.

Summary

Issues: Smuggling of Phensedyl Cough Linctus under mis-declaration, Confiscation of goods, Imposition of penalties, Role of Transport Company, Involvement of Distributors in smuggling

Smuggling of Phensedyl Cough Linctus under mis-declaration:
The case involved the interception of vehicles loaded with goods declared as Unani Medicines and Confectionery goods but actually containing Phensedyl Cough Linctus. The Customs Act, 1962, specified goods containing Codeine or its salts as subject to checking for illegal export. The Directorate of Revenue Intelligence (DRI) seized the goods on suspicion of illegal export to Bangladesh. A Show Cause Notice was issued proposing confiscation of the goods and penalties under Section 114(i) of the Customs Act, 1962.

Confiscation of goods and Imposition of penalties:
The Commissioner of Customs, Siliguri Commissionerate, confiscated 92,250 bottles of Phensedyl Cough Linctus and imposed penalties on 24 individuals involved in the offense. The penalties were based on the roles played by each party in the smuggling operation. The Adjudicating authority found key persons and entities actively colluding in the smuggling syndicate, leading to the confiscation of goods and imposition of penalties under relevant sections of the Customs Act, 1962.

Role of Transport Company:
The Transport Company, M/s. Jai Matadi Transport Services Private Limited, claimed no knowledge of the illegal goods loaded for transportation. They argued that the goods were mis-declared by the consignors and there was no evidence of intent to export to Bangladesh. However, the Adjudicating authority held the Transport Company accountable for providing a platform for smugglers to operate, actively colluding with the syndicate, and benefiting from the smuggling operation. The Transport Company's involvement led to penalties under Section 114(i) of the Customs Act, 1962.

Involvement of Distributors in smuggling:
The distributors of the seized goods were found to have knowingly facilitated the diversion of Phensedyl Cough Linctus for smuggling purposes. They prepared fictitious sales details to cover up their involvement in the smuggling operation. The Adjudicating authority concluded that the distributors abetted the smugglers in acquiring and smuggling the goods, holding them liable for penalties under Section 114(i) of the Customs Act, 1962. The distributors were also identified as liable for prosecution under Section 135 of the Customs Act, 1962, for their fraudulent practices and involvement in the smuggling scheme.

In conclusion, after thorough examination of the case records and findings of the Adjudicating authority, the Tribunal upheld the impugned Order, rejecting all appeals filed by the appellants and disposing of stay applications and cross objections. The judgment highlighted the active roles played by various parties in the smuggling operation, leading to confiscation of goods and imposition of penalties under the Customs Act, 1962.