2001 (9) TMI 371 - AT - Customs

Summary

Issues:
- Imposition of penalty by the Commissioner on the appellant
- Confiscation of a truck containing smuggled goods
- Interpretation of Section 115(2) of the Customs Act

Imposition of Penalty:
The appellant, operating a flight kitchen at an international airport, had a truck seized by Customs Officers containing smuggled gold. The Additional Collector of Customs ordered confiscation of the truck, later reduced to a fine of Rs. 50,000 by the Commissioner (Appeals). The appellant appealed this order, citing previous Tribunal decisions regarding the necessity of proving knowledge by the owner or person in charge of the conveyance for confiscation under Section 115 of the Act.

Confiscation of Truck:
The Customs Act's Section 115(2) states that any conveyance used in smuggling goods is liable to confiscation unless the owner proves lack of knowledge or connivance. The Tribunal noted that the conveyance's owner must prove it was used without their knowledge, the agent's, and the person in charge. The burden of proof shifts to the owner, necessitating proof of lack of knowledge or connivance by all relevant parties. The Tribunal highlighted that mere absence of knowledge by any party is insufficient to prevent confiscation.

Interpretation of Section 115(2) of the Customs Act:
The Tribunal analyzed the facts of the case where Customs Officers seized gold from the truck shortly after it was loaded. The officers searched the aircraft and noticed the transfer of garbage to the truck during the search. The Tribunal found that the onus under Section 115(2) had been met as the individuals in the flight kitchen in charge of the truck had no knowledge or involvement in the smuggling. Given the impracticality of rummaging through all goods before loading onto the truck, the Tribunal concluded that confiscation was unwarranted in this case.

In conclusion, the Tribunal allowed the appeal, setting aside the impugned order and providing consequential relief to the appellant. The judgment emphasized the importance of proving lack of knowledge or connivance by all relevant parties for confiscation under Section 115(2) of the Customs Act, highlighting the specific requirements outlined in the legislation for such cases.