1986 (8) TMI 259 - AT - Customs

Summary

Issues:
- Imposition of penalty under Section 114 of the Customs Act, 1962 based on ownership of a vehicle used for transporting seized goods meant for illicit export.
- Lack of evidence connecting the owner of the vehicle to the seized goods.
- Interpretation of Section 114 regarding penal liability in relation to goods under seizure.

Analysis:

The appeal in this case challenges the penalty imposed under Section 114 of the Customs Act, 1962 on the appellant, who was the owner of a vehicle used for transporting goods seized for illicit export. The incident leading to the penalty involved the seizure of handloom lunghis and voil saris from a van owned by the appellant. The appellant's counsel argued that there was no evidence linking the appellant to the seized goods, emphasizing that ownership alone should not result in penal liability unless there is proof of involvement in the act or omission related to the seized goods.

The learned counsel for the appellant contended that the adjudicating authority imposed the penalty solely based on the appellant's ownership of the vehicle, disregarding the lack of evidence connecting the appellant to the seized goods. The counsel highlighted that the appellant had sold the vehicle before the seizure, and ownership alone should not attract penal liability under Section 114 of the Act. The counsel's argument emphasized the necessity of evidence demonstrating the appellant's direct involvement or abetment in the illicit export of goods.

The Departmental Representative conceded that mere ownership of the vehicle should not be adequate to impose penal liability under Section 114 of the Customs Act. Section 114 allows for the imposition of penalties on individuals who commit acts or omissions that render goods liable to confiscation or abet such actions. The tribunal noted that the adjudicating authority's reasoning for imposing the penalty based solely on ownership was flawed in law. The tribunal emphasized that penal liability should not be established solely on ownership without concrete evidence of the individual's involvement in the act or omission related to the seized goods.

In conclusion, the tribunal set aside the impugned order imposing the penalty and allowed the appeal, emphasizing that ownership alone cannot lead to penal liability under Section 114 of the Customs Act without substantial evidence demonstrating the individual's direct involvement or abetment in the actions related to the seized goods.