2000 (11) TMI 499 - AT - Customs

Summary

Issues:
Challenge against penalty imposed under Section 112(b)(i) of the Customs Act by Collector of Customs (Preventive) based on recovery of foreign currency in connection with alleged dealing in contraband gold.

Analysis:

1. Facts of the Case:
- On a tip-off, DRI officers searched premises and recovered foreign currency believed to be proceeds of contraband gold.
- Statements of individuals involved were recorded under Section 108 of the Customs Act.
- Show cause notice issued for confiscation of seized currency and imposition of penalties.

2. Appellant's Arguments:
- Appellant claimed innocence, stating he financed another individual for gold purchase, not being aware of illegal activities.
- Challenged the legality of the seizure and the lack of evidence linking him to the alleged smuggling activities.
- Argued that the penalty was wrongly imposed without substantial corroboration.

3. Department's Arguments:
- Department contended that the seizure was natural and supported by evidence, including statements of involved parties.
- Asserted that the appellant was a partner in the deal and benefited from the illegal transactions.
- Cited legal provisions to support the case against the appellant.

4. Judgment Analysis:
- Tribunal reviewed the evidence, including statements, show cause notice, and impugned order.
- Noted that the case primarily relied on statements of the appellant and another individual for imposing penalties.
- Found discrepancies in the department's case, lack of specific evidence against the appellant, and a general charge under Sections 112(a) and (b) of the Customs Act.

5. Decision and Conclusion:
- Tribunal concluded that the department failed to establish a direct link between the appellant and the alleged smuggling activities.
- Emphasized that the appellant's involvement was based on a previous, unrelated transaction, not the subject of the show cause notice.
- Set aside the impugned order against the appellant, allowing the appeal with consequential relief.

This detailed analysis of the legal judgment highlights the key arguments presented, the evidence considered, and the ultimate decision of the Appellate Tribunal regarding the penalty imposed under the Customs Act.