1986 (6) TMI 171 - AT - Customs

Summary

Issues:
- Appeal against penalty imposed under Section 112 of the Customs Act, 1962 for removal of goods from a bonded warehouse without customs formalities.

Detailed Analysis:

1. Allegations and Investigation:
The appeal challenged a penalty imposed on the appellant for the removal of goods from a bonded warehouse without customs formalities. The investigation revealed a shortfall in warehoused goods, with statements implicating the appellant in directing the removal of goods without customs authorization.

2. Appellant's Defense:
The appellant's counsel argued that the case relied solely on a retracted statement, lacking corroboration. It was contended that as a Managing Director and later Chief Executive, the appellant couldn't personally supervise all activities. The defense emphasized the lack of evidence connecting the appellant to the offense and questioned the differential treatment compared to other company officials.

3. Respondent's Submission:
The respondent contended that as the appellant held key positions in the company, he should be held responsible for the unauthorized removal of goods. While acknowledging the retracted statement's limitations, the respondent argued for the appellant's accountability based on his roles within the company.

4. Tribunal's Findings:
The tribunal noted systematic removal of non-duty paid goods from the warehouse but criticized the lack of thorough investigation into the extent and duration of the malpractices. It highlighted the possible connivance of customs officers and the company's board of directors in the illegal activities. The tribunal questioned why penal actions were not taken against other involved parties and emphasized the lack of direct evidence linking the appellant to the offense.

5. Decision and Rationale:
The tribunal found that apart from the retracted statement, there was no substantial evidence against the appellant. It stressed the need for acceptable legal evidence to establish liability under Section 112 of the Customs Act. While acknowledging suspicions, the tribunal held that mere suspicion cannot substitute for proof. Consequently, the tribunal set aside the impugned order and allowed the appeal, exonerating the appellant from the charges due to insufficient evidence.

This detailed analysis of the judgment highlights the key arguments, findings, and the tribunal's rationale in overturning the penalty imposed on the appellant.