2022 (9) TMI 915 - AT - Customs

Levy of penalty u/s 117 of the Customs Act 1962 - Smuggling from Dubai - Gold Bars - allegation of abetting the accused in execution of his work of taking the gold out of Airport - allegation is that the appellant was aware the illicit activity, but remained silent - HELD THAT - On plain reading of Section 117 of the Customs Act, it becomes clear that the said provision provides for imposing penalty if a person contravenes any provision of Act or abets any such contravention. In the impugned order there is no mention as to which provision of law was contravened by the appellants. For a penalty under Section 117, there must be finding of contravention of some legal provision and, further, a finding to the effect that such contravention was not covered by any other penal provisions of the Act. These pre-requisites are missing in the impugned order. In the present case the ground on which the penalty has been imposed on Appellant i.e he was keeping silent about the illicit activities of Shri Jignesh, is not a valid ground for imposition of penalty under Section 117 of the Customs Act. No other evidence attributing knowledge or intention on the part of the Appellant has been relied upon. The Order of the Commissioner in so far as the same relates to imposition of penalty under Section 117 on Appellant is not sustainable - Appeal allowed.

Summary

Issues:
- Imposition of penalty under Section 117 of the Customs Act 1962 on the Appellant.

Analysis:
The case involved an appeal against an Order-In-Original imposing a penalty of Rs. 1,00,000 under Section 117 of the Customs Act 1962. The case revolved around a gold smuggling racket orchestrated and operated by certain individuals, including the Appellant. The officers found Shri Jignesh Savaliya in possession of gold bars at the airport, leading to an investigation that uncovered a well-organized smuggling operation. The Appellant, working as a Ramp Service Agent, was alleged to have abetted Shri Jignesh in smuggling gold out of the airport. The adjudicating authority confirmed the charges and imposed the penalty, which the Appellant challenged in the appeal before the Tribunal.

The Appellant's counsel argued that the Appellant was unaware of the gold smuggling activities and had only been informed about an iPhone packet, which he did not find suspicious initially. When he later learned about the gold smuggling, he distanced himself from Shri Jignesh. The counsel contended that the Appellant's lack of involvement in the smuggling rendered the penalty unjust and requested it to be set aside. The Commissioner had acknowledged that the Appellant did not engage in any activities warranting penalties under specific sections of the Customs Act, leading to the dropping of those proposed penalties.

Upon careful consideration of the submissions, the Tribunal examined Section 117 of the Customs Act, which allows for penalties for contraventions not expressly mentioned elsewhere in the Act. The Tribunal noted that the impugned order did not specify which legal provision was contravened by the Appellant, a necessary requirement for imposing a penalty under Section 117. Additionally, the ground for imposing the penalty, i.e., the Appellant's silence regarding Shri Jignesh's activities, was deemed insufficient for penalty under Section 117 without further evidence of knowledge or intention on the Appellant's part.

Consequently, the Tribunal found the imposition of the penalty under Section 117 on the Appellant unsustainable and allowed the appeal in favor of the Appellant, granting consequential relief as per the law. The judgment was pronounced in the open court on 19.09.2022.