1986 (10) TMI 192 - AT - Central Excise

Summary

Issues Involved:
1. Imposition of penalty on the appellants.
2. Legality of the order of confiscation of the truck bearing No. MHT 2304.

Detailed Analysis:

Issue 1: Imposition of Penalty on the Appellants
The judgment examined whether the penalties imposed on the appellants were justified based on the evidence and circumstances.

- Appellant J.L. Sharma: The evidence against J.L. Sharma primarily consisted of the statements from the driver and the cleaner of the truck. The driver claimed he was instructed by Sharma to hand over the truck to a person with a chit bearing Sharma's signature. However, the chit was not seized or produced during the investigation. The Gujarat High Court had previously set aside Sharma's conviction, noting the lack of corroborative evidence and the non-production of the chit. The Tribunal found the reliance on the driver's uncorroborated statement unjustified and set aside the personal penalty on Sharma.

- Appellant B.K. Patel: The evidence against B.K. Patel included the driver's statement and the recovery of 101 slabs of silver from a wadi allegedly owned by Patel. However, the driver did not implicate Patel directly, and there was no evidence linking Patel to the transportation or attempted export of the silver. The Tribunal found the Collector's conclusions more based on assumptions than on solid evidence. The Board's assertion that the silver was concealed with the objective of unauthorized export did not equate to an attempt to export, which is penalized under law. Consequently, the Tribunal set aside the personal penalty on B.K. Patel.

Issue 2: Legality of the Order of Confiscation of the Truck Bearing No. MHT 2304
The judgment questioned whether the truck used to transport the silver could be legally confiscated under Section 115(2) of the Customs Act.

- The Tribunal noted that for a conveyance to be confiscated under Section 115(2), it must be used as a means of transport in smuggling or carrying smuggled goods. The evidence showed the truck was used to transport silver slabs to a wadi, not for smuggling or in the carriage of smuggled goods. The journey from Panchkuva to the wadi did not constitute an attempt to export silver. The Tribunal concluded that the truck's use did not meet the criteria for confiscation under Section 115(2). The violation of Section 11K would only render the goods liable to confiscation, not the truck itself. Therefore, the order of confiscation and the fine in lieu of confiscation were set aside.

Conclusion:
Both appeals were allowed. The penalties imposed on both appellants were set aside, and any penalties paid were ordered to be refunded. The confiscation of the truck MHT 2304 and the fine in lieu of confiscation were also set aside, with instructions to refund any fine paid by J.L. Sharma.