2007 (11) TMI 194 - AT - Customs

Appellant rented godown to Ramesh Kumar for storing of the goods - Godown found having smuggled goods - copy of rent agreement produced by appellant - residential address provided by the appellant is also in existence there is no material on record that the appellant was directly or indirectly involved with the seized goods - penalty u/s 112 cannot be imposed merely on the ground that the appellant had given the premises on rent to Shri Ramesh Kumar penalty set aside

Summary

Issues:
Imposition of penalty under Section 112 of the Customs Act based on ownership of seized goods and premises verification.

Analysis:
The appellant appealed against a penalty of Rs.50,000 imposed for alleged involvement in storing smuggled goods in a rented godown. The appellant rented the godown to a tenant and denied knowledge of the smuggled goods found by Customs officers. The Adjudicating Authority seized the goods and imposed the penalty. The appellant provided the rent agreement and tenant's contact details as evidence of innocence. The Department argued that verification showed the appellant as the owner of the goods due to unavailability of the tenant. The Commissioner (Appeals) noted the seized residential premises matched the appellant's provided address. However, the Tribunal found no evidence linking the appellant to the smuggled goods directly or indirectly. The Tribunal emphasized that penalty under Section 112 cannot be imposed solely based on renting premises. Since the appellant's rent agreement was genuine and no proof of knowledge or involvement was found, the penalty was set aside, and the appeal was allowed.