1990 (5) TMI 165 - AT - Customs

Summary

Issues Involved:
1. Legality of confiscation of watch movements, wrist watch, and gold bars.
2. Validity of the penalty imposed under Section 112 of the Customs Act, 1962.
3. Compliance with principles of natural justice.
4. Binding nature of Criminal Court's acquittal on the Tribunal.
5. Adequacy of the Additional Collector's order as a speaking order.
6. Admission and consideration of additional evidence from Criminal Court proceedings.

Detailed Analysis:

1. Legality of Confiscation:
The Additional Collector of Customs confiscated the watch movements, wrist watch, and seven pieces of gold bars under Section 111(d) of the Customs Act, 1962. The appellant contested the confiscation, arguing that the recovery was "absolutely wrong, false and concocted," and that the statements were taken under "threat, coercion, intimidation and under pressure." The Tribunal noted that the Adjudicating Authority did not adequately consider whether the appellant's statements were voluntary or if the evidence on record supported the confiscation.

2. Validity of Penalty:
A penalty of Rs. 20,000 was imposed under Section 112 of the Customs Act. The appellant argued that the penalty was unjustified due to the lack of voluntary statements and the improper adjudication process. The Tribunal found that the Adjudicating Authority failed to provide sufficient reasoning for the penalty, merely relying on the allegations in the show cause notice.

3. Compliance with Principles of Natural Justice:
The appellant claimed that the ex parte decision violated the principles of natural justice, as he had requested adjournments on valid grounds but was not given a fair hearing. The Tribunal observed that the Adjudicating Authority's decision to proceed ex parte was contrary to the records, which showed that the appellant had indeed sought adjournments. This non-compliance with natural justice principles was a significant ground for setting aside the order.

4. Binding Nature of Criminal Court's Acquittal:
The appellant was acquitted by the Criminal Court for possession of the gold bars, and this acquittal was argued to be binding on the Tribunal. The Tribunal acknowledged that while criminal and adjudication proceedings are separate, the acquittal should be considered. The Tribunal directed the Adjudicating Authority to take into account the Criminal Court's judgment and decide on its binding nature.

5. Adequacy of the Additional Collector's Order:
The Tribunal found that the Additional Collector's order was not a speaking order. It lacked detailed reasoning and did not discuss the evidence or the voluntary nature of the appellant's statements. The order was based on allegations in the show cause notice, which could not substitute for evidence. The Tribunal emphasized that a speaking order is essential for proper adjudication and appellate review.

6. Admission and Consideration of Additional Evidence:
The Tribunal had previously allowed the appellant to submit additional evidence from the Criminal Court proceedings under Rule 23 of the CEGAT Procedure Rules, 1982. This decision was final and binding. The Tribunal directed the Adjudicating Authority to consider this additional evidence, including depositions and judgments from the Criminal Court, in the re-adjudication process.

Conclusion:
The Tribunal allowed the appeal by way of remand, directing the Adjudicating Authority to:
- Provide a personal hearing to the appellant.
- Re-adjudicate the matter in accordance with law, observing principles of natural justice.
- Consider whether the appellant's statements were voluntary.
- Take into account the additional evidence from the Criminal Court proceedings.
- Discuss all points raised by the appellant and issue a speaking order.

The Tribunal emphasized that the Adjudicating Authority must provide clear findings and reasoning to ensure a fair and just decision.