1997 (7) TMI 364 - AT - Central Excise

Summary

Issues:
- Imposition of penalty and confiscation of goods due to smuggling of cloves of third country origin found in a tractor and trolley.
- Lack of proper enquiry by Customs officers to establish contraband nature of the goods.
- Adverse inference drawn from the driver's conduct at the Police Check Post.
- Dispute regarding the source and legitimacy of acquisition of the cloves.

Analysis:
The appeal before the Appellate Tribunal CEGAT, New Delhi challenged the order-in-appeal upholding the penalty and confiscation imposed by the Deputy Commissioner of Customs, Lucknow for smuggling cloves of third country origin found in a tractor and trolley. The appellant argued that the driver was unaware of the contraband nature of the goods and had merely accepted the cargo for delivery. The Customs authorities had seized the goods following the driver's abandonment of the vehicle at a Police Check Post. The adjudicating authority had upheld the penalty and confiscation based on the driver's suspicious conduct.

The appellant contended that no proper enquiry was conducted by Customs officers to establish the contraband nature of the cloves or their third country origin. The owner of the cloves had provided purchase vouchers showing legitimate acquisition in Kanpur. The appellant argued that since the cloves were not contraband, there was no basis for imposing penalties or confiscating the tractor and trolley. The appellant requested the order to be set aside.

The Respondent, opposing the appellant's submissions, argued that the driver's conduct at the Police Check Post was suspicious, indicating guilty knowledge. The Respondent supported the impugned order and requested the dismissal of the appeal. However, the Tribunal found that the explanations provided by the appellant and the owner of the cloves had not been properly considered by the adjudicating authority. There was no conclusive evidence to disprove the legitimate acquisition of the cloves or establish their third country origin. The Tribunal noted the lack of enquiry to determine the nature and origin of the goods.

Ultimately, the Tribunal set aside the impugned order regarding the tractor, penalty, and confiscation, granting relief to the appellant. The Tribunal emphasized the need for a thorough investigation to establish the contraband nature of goods and highlighted the importance of giving the benefit of doubt to the appellant, the owner of the tractor. The appeal was allowed, overturning the penalty and confiscation imposed on the appellant.