2008 (1) TMI 407 - HC - Customs

Whether the observation of Customs, Excise and Service tax Appellate Tribunal that the order of the Court exonerating an accused under Section 239 of Cr. P.C. was adequate to exonerate the accused in the adjudication proceedings is correct and valid in law, especially when the accused had also participated in the adjudication proceedings? Whether the findings of the Customs, Excise and Service Tax Appellate Tribunal in its Final Order No. 1059 of 2006 dated 9-11-2006 2006 (11) TMI 70 - CESTAT, CHENNAI is sustainable on the ground that the first respondent is discharged as not guilty of the offences in the criminal proceedings is enough to set aside the impugned order dated 28-3-2002? Held that - When the attempt of the appellant to establish the charges levelled against the first respondent has failed and this Court has also categorically viewed that there was absolutely no material adduced by the appellant to connect the first respondent in the alleged smuggling activities, we are of the view that the Tribunal is correct in allowing the appeal filed by the first respondent and there is no question of law, much less substantial question of law arising to admit this appeal. Accordingly, this Civil Miscellaneous Appeal is dismissed. There will be no order as to costs.

Summary

Issues:
1. Interpretation of the observation by the Customs, Excise, and Service Tax Appellate Tribunal regarding exonerating an accused in adjudication proceedings.
2. Sustainability of the findings of the Tribunal based on the discharge of the accused in criminal proceedings.

Issue 1: Interpretation of Tribunal's Observation
The case involved an appeal by the Commissioner of Customs (Import) against an order of the Customs, Excise, and Service Tax Appellate Tribunal. The appellant contended that the Tribunal erred in exonerating the accused based on a discharge in criminal proceedings. The appellant argued that the accused was actively involved in smuggling sandalwood, peacock feathers, and mica powder. The Tribunal allowed the appeal filed by the accused, citing his acquittal in the criminal case. However, the High Court noted that the charges in both proceedings were the same, and the Tribunal's decision was based on the lack of evidence connecting the accused to the smuggling activities. The Court upheld the Tribunal's decision, emphasizing that the appellant failed to establish the charges against the accused.

Issue 2: Sustainability of Tribunal's Findings
The appellant's case was based on specific intelligence leading to the seizure of sandalwood, peacock feathers, and mica powder from two containers. Subsequently, an order of absolute confiscation and a penalty were imposed on the accused by the Commissioner of Customs (Sea). The accused appealed to the Tribunal, which ruled in his favor due to his discharge in the criminal case. The High Court highlighted that the charges against the accused were the same in both proceedings. The Court noted that the Tribunal correctly allowed the appeal as there was no material connecting the accused to the alleged smuggling activities. The High Court rejected the appellant's argument that the standards of proof differ between departmental and criminal proceedings, emphasizing that the charges remained consistent. Ultimately, the Court dismissed the appeal, stating that no substantial question of law arose, and upheld the Tribunal's decision to allow the accused's appeal.

In conclusion, the High Court upheld the Tribunal's decision to allow the accused's appeal, emphasizing the lack of evidence connecting the accused to the smuggling activities and the consistency of charges between the departmental and criminal proceedings.