1996 (12) TMI 243 - AT - Customs

Summary

Issues Involved:
1. Confiscation of the boat "Hari Om."
2. Enhancement of penalties on the respondents.
3. Exoneration of certain individuals from penalties.
4. The role of Syndicate Bank in the confiscation process.

Detailed Analysis:

1. Confiscation of the boat "Hari Om":

The adjudicating authority initially held that the boat "Hari Om" was not liable for confiscation. However, the department appealed this decision, arguing that the boat was used for transporting smuggled silver from the mother vessel to the shore. The respondents, including Raghunath C. Kotian, Abdul Khader, Athradi Bawa, and Ashok Shenoy, admitted in their statements under Section 108 of the Customs Act that the boat was used for this purpose. The Tribunal found these statements to be reliable and substantive evidence. Consequently, the Tribunal overturned the adjudicating authority's decision and ordered the absolute confiscation of the boat "Hari Om."

2. Enhancement of penalties on the respondents:

The department appealed for the enhancement of penalties imposed on 18 individuals, arguing that the penalties were too low considering the gravity and calculated nature of the smuggling operation, which involved goods worth over Rs. 2 crores.

- Abdul Khader: Initially fined Rs. 1,00,000, his penalty was enhanced to Rs. 15,00,000 due to his extensive involvement in smuggling activities over 25 years and his role in orchestrating the smuggling operation.
- Musthafa Ahmed Umer: Initially fined Rs. 50,000, his penalty was increased to Rs. 5,00,000 due to his significant role in finalizing the smuggling plans.
- Mohammed Ahmed: Initially fined Rs. 50,000, his penalty was raised to Rs. 10,00,000. Known as Tiger Musthafa, he was actively involved in sending smuggled silver and gold to the Indian coast.
- Dhiraj Hussain: Initially fined Rs. 50,000, his penalty was enhanced to Rs. 5,00,000 due to his role in supervising the unloading and loading operations.

For the other respondents (Nos. 5 to 18), who were initially fined Rs. 1,000 each, the penalties were increased to Rs. 20,000 each. These individuals were involved in the transportation and handling of the smuggled goods, albeit as laborers.

3. Exoneration of certain individuals from penalties:

- Raghunath Kotian: Initially exonerated by the adjudicating authority, the Tribunal imposed a penalty of Rs. 1,00,000 on him. Abdul Khader's statement implicated Kotian as the Director of M/s. Hari Om Enterprises, who knowingly lent his boat for smuggling activities.
- Chadok Ammanna: The Tribunal upheld the adjudicating authority's decision to exonerate him. There was no evidence or statements implicating him directly in the smuggling operations, and mere designation as Managing Director was insufficient for penal action.

4. The role of Syndicate Bank in the confiscation process:

The Syndicate Bank argued that the confiscation of the boat "Hari Om" would affect their ability to recover dues from M/s. Hari Om Enterprises. The Tribunal dismissed this argument, stating that the boat's confiscation was warranted under Section 115 of the Customs Act due to its use in smuggling activities. The bank's financial interests could not override the legal provisions for confiscation. However, the Tribunal acknowledged that the bank had no involvement in the smuggling activities and thus was not subject to penal action.

Conclusion:

The Tribunal's judgment included the absolute confiscation of the boat "Hari Om," significant enhancements in penalties for key individuals involved in the smuggling operation, and the exoneration of one individual due to lack of evidence. The Syndicate Bank's plea was dismissed, affirming the legal grounds for the boat's confiscation. The appeals were disposed of accordingly.