2020 (2) TMI 201 - AT - Customs

Penalty u/s 114 of CA - Smuggling - prohibited item or not - red sanders logs and the cabbage bags - allegation that the penalty has been levied based solely on the inculpatory statements - HELD THAT - The statement of the appellant Shri. Karuppiah recorded on 09.10.2013 under Section 108 of the Customs Act reveals the modus operandi and this appellant has very clearly explained not only the whole transaction but also named various persons involved, in the smuggling activity and has also clearly identified the destination i.e., foreign buyer M/s. Haiphong Petro Trading JSC, No. 782, Chua Ve, Doana, 2nd Street, Dong Hai, 1 Ward, Hai An Dist. HP, Vietnam. Revenue has linked each and every chain in the whole loop of the master plan to smuggle the contraband by identifying the involvement and role of each and every person whereas nothing is brought on record by the appellants to dislodge even a small link in the above chain. Their contention that they did not claim ownership nor did they have wherewithal, etc., would not help them since in an activity of the nature involved in the present case, the recipient/buyer would be least interested in knowing this. Because, otherwise, the buyer would have right royally bought from the open market after paying all necessary/applicable duties rather than choosing a shortcut of smuggling. Appeal dismissed - decided against appellant.

Summary

Issues Involved:
1. Confiscation of red sanders logs under Section 113(d) of the Customs Act, 1962.
2. Confiscation of cabbage used for concealing red sanders under Section 119 of the Customs Act, 1962.
3. Disposal of rotten cabbage.
4. Imposition of penalty under Section 114 of the Customs Act, 1962.

Detailed Analysis:

1. Confiscation of Red Sanders Logs:
The Department intercepted a vehicle transporting red sanders logs valued at ?4,33,35,000/- without proper documentation. The logs were certified as prohibited items for export by the Forest Range Officer. The Adjudicating Authority ordered confiscation under Section 113(d) of the Customs Act, 1962, which was upheld by the Commissioner (Appeals).

2. Confiscation of Cabbage:
The cabbage, valued at ?10,000/-, was used to conceal the red sanders logs. The Adjudicating Authority ordered its confiscation under Section 119 of the Customs Act, 1962. The cabbage was found to be rotten and unfit for consumption and was destroyed, which the Authority held as properly disposed of.

3. Disposal of Rotten Cabbage:
The Adjudicating Authority found the disposal of the rotten cabbage to be proper. This finding was not contested further and was upheld by the Commissioner (Appeals).

4. Imposition of Penalty:
The main issue was whether the penalty under Section 114 of the Customs Act, 1962, was justified. The appellants argued that the penalty was based solely on inculpatory statements without corroborative evidence. They claimed they did not own the goods or the vehicle and were not financially capable of such an operation. The Revenue countered that the appellants' voluntary statements and the chain of events corroborated their involvement in the smuggling attempt. The statements were not retracted, and the appellants were present at the scene.

The Tribunal found that the appellants' statements detailed the smuggling operation and identified various individuals involved. The findings of the Adjudicating Authority, including the use of a fake registration number on the truck, were not challenged. The Tribunal concluded that the appellants' voluntary statements and the evidence presented by the Revenue justified the imposition of penalties. The Tribunal cited the decision of the Hon’ble High Court of Madras in CC, Trichy Vs. S. Janarthanan, which supported the imposition of penalties for attempts to smuggle prohibited goods.

Conclusion:
The Tribunal upheld the confiscation orders and the penalties imposed by the Adjudicating Authority and the Commissioner (Appeals), finding no merit in the appellants' arguments. The appeals were dismissed.

Order Pronounced:
The order was pronounced in the open court on 30.01.2020.