2024 (7) TMI 323 - AT - Customs

Levy of penalty u/s 114(i) of the Customs Act - smuggling - attempted/export of Red Sanders wood logs - prohibited goods or not - HELD THAT - There is nothing to state that the containers after having left the exporters premises were still under their control or that the exporters assisted the loading of Red Sanders onto the container or the containers were tampered by them or had any knowledge about the loading of Red Sanders onto the containers duly loaded and sealed under the supervision of Central Excise officers. The Tribunal in a slew of cases in the absence of evidence directly implicating the appellants has held as unjustifiable to impose penalty on the exporting firm. It is settled law that conjectures and loose circumstances cannot replace the need for a cogent proof suspicion if any is required to be duly corroborated with independent evidence which in the present facts and circumstances on record is non-existent. The department has thus failed to establish any knowledge on part of the exporter of the fact of replacing the High Alumina Refractories Fire Bricks with red sanders wood logs and camouflaging them behind a layer of High Alumina Refractories Fire Bricks. The appellant cannot be proceeded against merely on assumption and made a victim of circumstances holding them liable for contraband found to be stuffed inside the container. This is all the more so as the goods were stuffed under supervision of Central Excise officers and seals were found to be intact and untampered at the time of examination of cargo. The order of the lower authority cannot therefore be sustained. Appeal disposed off.

Issues Involved:
1. Legality of the penalty imposed under Section 114(i) of the Customs Act.
2. Involvement and responsibility of the appellants in the mis-declaration and attempted export of prohibited goods.
3. Role and actions of the alleged intermediary, Shri Raj Kumar Singh.
4. Admissibility and credibility of evidence presented by the department.
5. Impact of the appellant's (Shri Vikram Bole) death on the ongoing appeal.

Detailed Analysis:

1. Legality of the Penalty Imposed Under Section 114(i) of the Customs Act:
The appellants challenged the penalty imposed under Section 114(i) of the Customs Act, which pertains to attempts to export goods improperly. The Tribunal emphasized that the onus is on the department to provide evidence of an affirmative role or action by the appellants that would render the goods liable to confiscation under Section 113. The Tribunal found that the department failed to provide such evidence.

2. Involvement and Responsibility of the Appellants:
The Tribunal noted that the goods were factory-stuffed under the supervision of Central Excise authorities, and the seals were intact upon reaching the docks. The Commissioner of Customs had held that the entire operation was carried out by Shri R.K.Singh, and the mis-declaration was made during transportation without the knowledge or consent of the appellants. The Tribunal found this reasoning insufficient to hold the appellants responsible, as there was no evidence of their complicity in the crime.

3. Role and Actions of the Alleged Intermediary, Shri Raj Kumar Singh:
Investigations revealed that Shri Raj Kumar Singh was responsible for the transport and other arrangements for the export. Despite multiple attempts, the investigating agency could not apprehend him, and he remained elusive. The Tribunal highlighted that the responsibility for the mis-declaration could not be affixed to the appellants in the absence of any investigation or evidence against Shri Raj Kumar Singh.

4. Admissibility and Credibility of Evidence Presented by the Department:
The Tribunal found that the department did not present credible evidence to implicate the appellants in the attempted export of Red Sanders wood logs. The ARE1 documents supported the export of High Alumina Refractories Fire Bricks, and there was no evidence of the appellants' involvement in removing the declared goods and re-stuffing them with Red Sanders.

5. Impact of the Appellant's (Shri Vikram Bole) Death on the Ongoing Appeal:
The Tribunal noted that Shri Vikram Bole had passed away, and there was no application on record for the continuance of the proceedings by any successor-in-interest or legal representative. Consequently, the appeal filed by Shri Vikram Bole abated in terms of Rule 22 of the CESTAT Procedure Rules, 1982.

Conclusion:
The Tribunal allowed the appeal filed by the exporting firm, finding no evidence to implicate them in the attempted export of Red Sanders wood logs. The penalty imposed under Section 114(i) of the Customs Act was set aside due to the lack of credible evidence and the fact that the goods were factory-stuffed under the supervision of Central Excise authorities. The appeal filed by Shri Vikram Bole abated due to his demise. The Tribunal emphasized that assumptions and conjectures could not replace the need for cogent proof, and the department failed to establish any knowledge or involvement on the part of the appellants in the alleged crime.

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