1991 (1) TMI 273 - AT - Customs

Issues Involved:
1. Validity and legality of the Order-in-Original.
2. Validity of the seizure of Indian currency.
3. Sustainability of the penalty imposed on the appellant.

Detailed Analysis:

1. Validity and Legality of the Order-in-Original:
The appellant challenged the Order-in-Original No. 27/Cus (WB) 87 dated 26-6-1987 issued by the Collector of Customs (Preventive), West Bengal. The facts of the case indicate that the Customs Officers conducted a search on 9-9-1985 and recovered 648 kgs. of broken metal scraps and 677.60 meters of synthetic fabrics of alleged foreign origin from the appellant's premises. Additionally, Indian currency amounting to Rs. 1,61,000/- was found in a secret chamber of a steel almirah. The appellant's son and a relative present at the spot denied any knowledge or ownership of the goods. The appellant, upon being summoned, denied involvement in smuggling activities and provided affidavits from nine individuals claiming ownership of the seized currency.

The department did not investigate the veracity of the appellant's claims or examine the alleged owner of the premises, Nivarani Devi. The Collector proceeded to confiscate the goods and currency and imposed a penalty of Rs. 1000/- on the appellant. The Collector's conclusion was based on the assumption that the appellant's possession of such a large amount of currency indicated involvement in smuggling activities. However, the department failed to provide concrete evidence proving that the seized goods were of foreign origin or smuggled.

2. Validity of the Seizure of Indian Currency:
The appellant's counsel argued that the seizure of Indian currency was invalid as the department did not examine the nine deponents who claimed ownership of the currency or the owner of the premises. The counsel cited several rulings, including:
- 1981 (8) E.L.T. 606: Presumption of smuggling without sufficient evidence is hypothetical.
- 1983 (12) E.L.T. 401 WRB: Confiscation of currency without evidence of it being proceeds of smuggled goods is unsustainable.
- 1988 (33) E.L.T. 444 (Tribunal): Mere possession of currency with an unsatisfactory explanation does not constitute proof of smuggling.
- 1988 (38) E.L.T. 636 (Tribunal): Penal proceedings require direct or circumstantial evidence proving the currency is from smuggling activities.

The department's failure to investigate or provide evidence led to the conclusion that the seizure of Indian currency was not legally tenable.

3. Sustainability of the Penalty Imposed on the Appellant:
The appellant was not present during the raid, and the goods were found outside his premises. His minor son denied any connection to the goods. The appellant provided affidavits from nine individuals claiming ownership of the currency and denied involvement in smuggling. The Collector's conclusion that an ordinary mason could not accumulate such a large sum of money was deemed speculative and unsupported by evidence. The department's failure to investigate the appellant's claims or provide evidence of smuggling activities rendered the penalty unsustainable.

Conclusion:
The judgment concluded that the order passed by the Collector was not sustainable in law due to the lack of evidence proving the seized goods were of foreign origin or smuggled. The seizure of Indian currency was deemed invalid as the department did not investigate the appellant's claims or provide evidence of smuggling activities. Consequently, the penalty imposed on the appellant was also set aside. The Revenue was directed to return the seized Indian currency within one month of the receipt of the order. No order was passed regarding the seized goods as there were no claimants and they were not seized from the appellant's premises.

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