2023 (5) TMI 230 - HC - Customs

Levy of penalty u/s 112 of the Customs Act, 1962 - Smuggling - Seizure of Gold Bars - HELD THAT - Considering that the petitioner has a remedy of appeal before the Customs Excise and Service Tax Appellate Tribunal, it is not considered apposite to examine the petitioner s challenge to the impugned order in this petition. However, given the manner in which the penalty has been computed and the financial condition of the petitioner, we consider it apposite to direct the Tribunal to consider the petitioner s appeal without any pre-deposit. It is clarified that this Court has not expressed any opinion on the merits of the impugned order and the Tribunal shall consider the petitioner s appeal on merits uninfluenced by any observations made in this order. Petition disposed off.

Summary

Issues involved: Impugning an Order-in-Original u/s 112 of the Customs Act, 1962 imposing penalties, treatment of seized goods under Section 111, recovery of Indian currency, imposition of penalties on bank account credits, challenge to penalty imposition, availability of appeal remedy, direction to Tribunal for appeal consideration without pre-deposit.

Impugned Order: The petitioner challenged an Order-in-Original imposing penalties of Rs. 2,00,00,000 u/s 112 and Rs. 110,58,00,000 u/s 112(b)(i) of the Customs Act, based on a seizure of gold bars and Indian currency, treating the currency as proceeds of smuggled goods.

Seizure of Goods: 8000 grams of gold bars seized from individuals led to penalties imposed under Section 112 and 112(b)(i) of the Customs Act, with the Adjudicating Authority linking the gold smuggling to the petitioner.

Recovery of Indian Currency: Indian currency recovered from premises was treated as proceeds of smuggling, resulting in a penalty imposition of Rs. 2,00,00,000 on the petitioner, alleging involvement in smuggling activities.

Penalty on Bank Account Credits: Penalties equivalent to amounts credited into petitioner's bank account were imposed, alleging those funds as proceeds of smuggling, despite petitioner's claim of having books of accounts to substantiate the sources of those proceeds.

Challenge to Penalty Imposition: Petitioner disputed any recovery from its premises or involvement in nefarious activities, arguing that penalties were imposed on an unsubstantiated assumption regarding the funds in its accounts being proceeds of smuggled gold.

Remedy of Appeal: Despite the availability of an appeal before the Tribunal, due to the high penalty and financial condition of the petitioner, the Court directed the Tribunal to consider the appeal without any pre-deposit, without expressing any opinion on the merits of the impugned order.

Disposition: The petition was disposed of with a direction to the Tribunal to consider the appeal without pre-deposit, emphasizing that the Court's order should not influence the Tribunal's consideration on the merits of the appeal.