1992 (11) TMI 168 - AT - Customs

Summary

Issues Involved:

1. Confiscation of a Mercedes Benz Car under Section 111(d) of the Customs Act, 1962.
2. Imposition of penalties under Section 112 of the Customs Act, 1962.
3. Legality of the adjudication process by the successor officer without a fresh hearing.
4. Determination of the car's value for penalty and fine purposes.
5. Denial of cross-examination of a co-noticee.
6. Specificity of the clause under Section 112 for imposing penalties.
7. Bona fide belief and mens rea in the context of penalties.

Issue-wise Detailed Analysis:

1. Confiscation of a Mercedes Benz Car under Section 111(d) of the Customs Act, 1962:

The Additional Collector of Customs ordered the confiscation of a Mercedes Benz Car bearing Registration No. DBB-782 under Section 111(d) due to its illegal importation into India without payment of customs duty. The car was seized from Appellant No. 1, who failed to provide legal importation documents. The investigation revealed that the car had been registered under different numbers across various locations using bogus documents, including a non-existent person named Rupen Roy.

2. Imposition of penalties under Section 112 of the Customs Act, 1962:

Penalties were imposed on the appellants: Rs. 2 lakhs on Shri Shally Thapar, Rs. 3 lakhs on Shri Haren P. Choksey, and Rs. 50,000 on Shri Inder Pal Singh alias Pali. The Additional Collector found that the appellants conspired to regularize and register the illegally imported car using fake documents. The Tribunal upheld the penalties but reduced the amounts based on the actual value of the car, which was determined to be Rs. 4 lakhs instead of Rs. 7 lakhs.

3. Legality of the adjudication process by the successor officer without a fresh hearing:

The appellant argued that the confiscation and penalty order was invalid as it was passed by a successor officer without a fresh hearing. However, it was found that the successor officer had issued notices for a fresh hearing, which were attended by two appellants. The Tribunal concluded that there was no violation of natural justice, and the appeal was decided on merits.

4. Determination of the car's value for penalty and fine purposes:

The value of the car was initially taken as Rs. 7 lakhs, but the only evidence presented was the statement of Appellant No. 1, who claimed to have paid Rs. 4 lakhs. The Tribunal found no other evidence to support the higher valuation and accordingly reduced the fine in lieu of confiscation from Rs. 4 lakhs to Rs. 3 lakhs and adjusted the penalties proportionately.

5. Denial of cross-examination of a co-noticee:

The appellant contended that the denial of cross-examination of Shri Shally Thapar, whose testimony was relied upon, violated natural justice. The Tribunal noted that corroborative evidence was available and that the refusal did not result in any injustice. The Tribunal distinguished the case from others cited by the appellant, where the facts were different and cross-examination was necessary.

6. Specificity of the clause under Section 112 for imposing penalties:

The appellants argued that the penalties were vague as the specific clause under Section 112 was not mentioned. The Tribunal referred to the show cause notice, which detailed the conspiracy and knowledge of illegal importation, fulfilling the ingredients of Clause (b) of Section 112. The Tribunal held that non-mention of the specific clause did not vitiate the proceedings as sufficient material and evidence were provided.

7. Bona fide belief and mens rea in the context of penalties:

The appellants claimed that their actions were bona fide and not mala fide, citing various judgments. The Tribunal, however, found that the appellants were aware of the illegal importation and had used bogus documents, indicating mala fide involvement. The Tribunal upheld the penalties, rejecting the argument of bona fide belief.

Separate Judgment:

Partial Dissent by Judicial Member:

The Judicial Member dissented regarding the penalty on Appellant No. 3, Shri Inder Pal Singh, stating there was no evidence that he knew the car was smuggled. The show cause notice did not allege his knowledge of illegal importation, and his involvement was limited to transferring the car's registration. The Judicial Member set aside the penalty on him.

Majority Decision:

The Third Member agreed with the Judicial Member, setting aside the penalty on Shri Inder Pal Singh. The penalties on Shri Shally Thapar and Shri Haren P. Choksey were upheld with modifications in the amounts.

Final Order:

The penalty on Shri Inder Pal Singh was set aside. The penalties on Shri Shally Thapar and Shri Haren P. Choksey were reduced as specified in the order. The appeals were otherwise rejected.