1985 (11) TMI 158 - AT - Customs

Issues Involved:
1. Confiscation of the vessel under Section 115(2) of the Customs Act.
2. Confiscation of 240 bags of wet dates under Section 119 of the Customs Act.
3. Quantum of fine in lieu of confiscation of the vessel.
4. Legal validity of the confiscation order without notice to the owner of the cargo.

Detailed Analysis:

1. Confiscation of the vessel under Section 115(2) of the Customs Act:

The appellants contested the confiscation of their vessel "M.S.V. Faizi Husaini" under Section 115(2) of the Customs Act. The vessel was seized after Customs Officers found ten packages of undeclared goods of foreign origin during a search. The appellants argued that the contraband was not concealed but stored in the hatch, which was open and exposed. The Tindel, who was in charge of the vessel, admitted to smuggling the goods. The Tribunal noted that the vessel was used in smuggling with the Tindel's knowledge and collusion, making the confiscation under Section 115(2) justified. The Tribunal rejected the reliance on previous judgments that did not align with the facts of this case, as the smuggling was done with the knowledge of the person in charge.

2. Confiscation of 240 bags of wet dates under Section 119 of the Customs Act:

The appellants challenged the confiscation of 240 bags of wet dates, arguing that Section 119 was not applicable because the contraband was not concealed among the dates. The Tribunal found that the contraband was hidden beneath the cargo of wet dates, which required shifting 200 bags to uncover the smuggled goods. This indicated that the dates were used to conceal the contraband, making Section 119 applicable. However, the Tribunal noted a significant omission: the owner of the cargo was not given notice before confiscation, as required by Section 124 of the Customs Act. This rendered the confiscation of the wet dates legally invalid.

3. Quantum of fine in lieu of confiscation of the vessel:

The appellants argued that the fine of Rs. 80,000/- for redeeming the vessel was disproportionate to the value of the contraband goods. The Tribunal considered the value of the vessel (Rs. 3,20,000/-) and the contraband (Rs. 86,412/-) and noted that the owner was not directly involved in the smuggling. Given that the crew members had already been penalized and the owner had taken precautions against misuse, the Tribunal found the fine excessive. Consequently, the redemption fine was reduced from Rs. 80,000/- to Rs. 10,000/-.

4. Legal validity of the confiscation order without notice to the owner of the cargo:

The Tribunal found that the Additional Collector of Customs did not issue a notice to the owner of the wet dates before confiscation, as required by Section 124 of the Customs Act. This omission made the confiscation of the 240 bags of wet dates legally invalid. The Tribunal set aside the confiscation order and directed the refund of the fine of Rs. 10,000/- paid by the appellants.

Conclusion:

Except for the modifications regarding the reduction of the redemption fine and the setting aside of the confiscation of the wet dates, the Tribunal confirmed the order of the Additional Collector of Customs and rejected the appeal.

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