2018 (7) TMI 544 - AT - Customs

Penalty u/s 114(i) of the Customs Act, 1962 - Smuggling - Red Sanders Wood - allegation based on the statement of driver - Held that - It is seen from the record that the Drivers of the seized vehicles in their statement stated that they had loaded Red Sanders Wood from one place in Rajasthan and reached Ghoshpukur on 07.02.2011 afternoon - also, the statement of two Drivers are more elaborate to show the involvement of the appellant. Quantum of penalty - Held that - It is significant to note that the appellant is the key person on the export of the Red Sanders wood to Nepal - however, the amount of penalty would be reduced to ₹ 15,00,000.00. Appeal disposed off.

Summary

Issues:
Imposition of penalty under Section 114(i) of the Customs Act, 1962 for smuggling Red Sanders Wood concealed under Marble Chips, violation of principle of natural justice, reliance on uncorroborated statements, excessive quantum of penalty compared to co-accused, reduction of penalty amount.

Analysis:

Imposition of Penalty:
The appellant appealed against the penalty imposed under Section 114(i) of the Customs Act, 1962 for smuggling Red Sanders Wood concealed under Marble Chips. The case involved intercepted vehicles loaded with the illegal goods, with drivers and Khalasis implicating the appellant in the smuggling operation. The Adjudicating authority confiscated the goods and imposed a penalty on various persons, including the appellant. The appellant contested the penalty, arguing lack of proper hearing and reliance on uncorroborated statements.

Violation of Natural Justice:
The appellant claimed that the impugned order was passed without affording a proper opportunity of hearing, violating the principle of natural justice. The appellant's statement indicated a different version of events, portraying himself as an innocent bystander who only provided directions to a driver for a small sum of money. The appellant's defense centered on discrediting the uncorroborated statements of the drivers and Khalasis, emphasizing the lack of concrete evidence linking him to the smuggling operation.

Excessive Penalty and Reduction:
The appellant's counsel argued that the quantum of penalty, set at ?25 Lakhs, was excessive compared to the penalties imposed on the co-accused individuals. The appellant was portrayed as a key figure in the export operation, justifying the higher penalty. However, the Senior Advocate's reliance on case laws to challenge the penalty quantum was deemed inapplicable by the tribunal. Eventually, considering all circumstances, the penalty amount was reduced to ?15,00,000.00, and the appeal was disposed of accordingly.

This judgment highlights the importance of evidence, natural justice principles, and equitable penalty imposition in cases of smuggling and customs violations, showcasing a detailed legal analysis and decision-making process by the Appellate Tribunal CESTAT Kolkata.