1998 (7) TMI 414 - AT - Customs

Summary

Issues:
1. Confiscation of vessel 'AL-GILANI' and penalties imposed by Collector of Customs.
2. Validity of penalties under Sections 112(a) and (b) of the Customs Act.
3. Confiscation of vessel under Section 115(2) of the Customs Act.
4. Applicability of rules regarding precautions against smuggling goods.
5. Validity of penalties based on statements of co-accused.
6. Appeal of Abdul Kadir Mohammed Kapadi.

Issue 1:
The judgment deals with three appeals challenging the decision of the Collector of Customs regarding the confiscation of the vessel 'AL-GILANI' and penalties imposed on various persons, including M/s. Allana Sons Pvt. Ltd. The appeal seeks to quash the penalty of Rs. 5 lakhs and penalties of Rs. 25,000 each under Sections 112(a) and (b) of the Customs Act.

Issue 2:
Regarding the penalties under Sections 112(a) and (b) of the Customs Act, the tribunal found that the principles of confiscation under Section 115 are different from the levy of penalties under Section 112. The adjudicating authority's findings, based on statements of co-accused, supported the imposition of penalties. The tribunal referred to relevant case laws to establish that guilt can be inferred from statements of co-accused. The penalty under Section 112(a) was upheld, while the penalty of Rs. 5 lakhs was set aside.

Issue 3:
In analyzing the confiscation of the vessel under Section 115(2) of the Customs Act, the tribunal noted that the section requires owners to take precautions against the use of conveyance for smuggling, as specified in the rules. However, since no such rules had been framed, the tribunal held that the authority cannot conclude that the owners contravened Section 115(2). Therefore, this portion of the order was deemed unsustainable and set aside.

Issue 4:
The tribunal discussed the absence of rules specifying precautions against smuggling goods, which are required under Section 115(2) of the Customs Act. Since these rules were not in place, the authority could not establish a contravention of the provision by the owners, leading to the setting aside of that part of the order.

Issue 5:
Regarding the validity of penalties based on statements of co-accused, the tribunal referred to various judgments to support the admissibility of such statements as substantial evidence. The penalties imposed on the basis of these statements were upheld, confirming the guilt of the appellants under Section 112(a) of the Customs Act and Section 74 of the Gold (Control) Act.

Issue 6:
The appeal of Abdul Kadir Mohammed Kapadi was also addressed in the judgment, where it was noted that the impugned order was based on statements of co-accused and Kapadi himself. Referring to Supreme Court decisions, the tribunal upheld the validity of convictions based on statements recorded under Section 108 of the Act. Therefore, Kapadi's appeals were dismissed for lacking merit.

In conclusion, all the appeals were disposed of based on the aforementioned analysis and findings, leading to the confirmation of certain penalties, setting aside of others, and dismissal of Kapadi's appeals.