1986 (7) TMI 252 - AT - Income Tax

Summary

Issues:
Appeal against order of confiscation and personal penalty under Customs Act.

Detailed Analysis:

Issue 1: Confiscation of Vehicle
The appeal challenged the order of confiscation of a truck under Sec. 115(l)(c) of the Customs Act. The Addl. Collector ordered confiscation based on the truck not stopping when signaled by Customs Officers. However, Sec. 115(l)(c) allows confiscation of a conveyance that fails to stop under Sec. 106. Sec. 106 empowers officers to stop a vehicle only if there is reason to believe it is involved in smuggling. The Addl. Collector's finding that the vehicle was stopped on suspicion, not belief of smuggling, renders the stopping illegal. Thus, the truck could not be considered liable for confiscation under Sec. 115(l)(c).

Issue 2: Lack of Evidence for Confiscation
The appeal contended that the department failed to establish that the truck was used in smuggling or carriage of smuggled goods, a requirement for confiscation under Sec. 115(l)(c). The Addl. Collector did not allege or find that the truck was involved in smuggling activities. Mere failure to stop the vehicle, without evidence of smuggling, is insufficient for confiscation under Sec. 115(l)(c). Therefore, the Addl. Collector's order of confiscation was deemed illegal and set aside.

Issue 3: Personal Penalty on Owner
The appeal also challenged the personal penalty imposed on the owner under Sec. 117 of the Customs Act. The Addl. Collector imposed the penalty based on the owner's alleged connivance in using the truck for smuggling. However, the order did not specify the provision violated by the owner, rendering the penalty without jurisdiction. As a result, the penalty on the owner was set aside.

Conclusion
The judgment allowed the appeal, setting aside the order of confiscation of the vehicle and the personal penalty imposed on the owner. The truck was to be released to the owner, and any paid penalty was to be refunded. The decision highlighted the necessity of evidence and proper legal grounds for confiscation and penalties under the Customs Act.