2021 (8) TMI 242 - AT - Customs

Smuggling - imitation jewellery raw material glass beads (Chatons) in the guise of clearing glass show piece/scrubbers/foot wear - penalty - HELD THAT - The very Show Cause Notice contains serious allegations of attempted smuggling against various persons. Admittedly, there is no allegation against the appellant herein as to whether he had any role or was involved in abetting the commission of the alleged smuggling activity. Sole allegation in the Show Cause Notice as well as the Order-in-Original is that the two persons who appeared on a particular day, had absconded, whose identity was not established by the appellant herein. The discussion in the Show Cause Notice as well as the impugned order points out that during examination, the persons were present, who later on absconded, which per se would not tantamount to breach of Regulation 5(1)(i)(n) because, there is nothing on record to suggest that they had gained unauthorized access into the premises. It is admitted that they had presented themselves on being called for examination, were also within the reach of the officers, who only later on absconded and this would not amount to unauthorized access into the premises. In any case, it is not the case of the Department that those two persons had gained unauthorized access and that the appellant had helped in any way, in accommodating the unauthorized access or exit from the scene. Penalty - HELD THAT - There is otherwise no allegation by the Revenue as to security and access control and therefore, the penalty cannot be sustained. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Allegation of attempted smuggling of glass beads, penalty imposed for violation of Regulation 5(1)(n), procedure for suspension or revocation of approval under Regulation 12, absence of allegations against the appellant, breach of Regulation 5(1)(i)(n), unauthorized access into premises, security and access control.

Analysis:
The case involves a Show Cause Notice alleging attempted smuggling of glass beads against various persons, including two individuals who later absconded. The appellant, a Customs Cargo Service Provider, was accused of violating Regulation 5(1)(i)(n) for not verifying the identity of the absconding individuals. The Principal Commissioner imposed a penalty of ?50,000 for this violation but withdrew other proposals. The Tribunal noted that there were no allegations of the appellant's involvement in abetting smuggling and highlighted the procedural requirements under Regulation 12 for imposing penalties. The Tribunal found that the mere presence of the absconding individuals during examination did not constitute a breach of Regulation 5(1)(i)(n) as there was no unauthorized access into the premises facilitated by the appellant.

The Tribunal emphasized that the absence of any allegations regarding security and access control further weakened the case for sustaining the penalty. Ultimately, the Tribunal set aside the impugned order and allowed the appeal, concluding that the penalty could not be upheld due to the lack of evidence showing the appellant's involvement in unauthorized access or abetting the smuggling attempt. The judgment underscores the importance of clear evidence and specific allegations in establishing liability for regulatory violations in customs areas.