2014 (3) TMI 799 - AT - Customs

Smuggling of goods - discovery of offending goods - Penalty - Held that - There was no defence lead by any of the appellants to prove that those offending goods were not smuggled goods. Therefore, in para 40(c) of the adjudication order, adjudicating authority found that Shri Harinder Singh was real person behind smuggling and was arrested and produced before Magistrate. He merely pleaded his innocence before Magistrate and also pretended to be stranger to Azizur Rehmani Hamid Hamidani. The said appellant when confessed that he was master mind behind this smuggling, he retracted subsequently by his statement dated 30.8.2006 and 3.11.2006. But his concessional statement brought out truth of smuggling. He could not demolish his active role and concern in the smuggling. Shri Harinder Singh was found to be master mind behind smuggling as is proved from the statement dated 30.8.2006 and 3.11.2006 recorded from Azizur Rehmani Hamid Hamidani. That remained un-rebutted. There was no detachment of the goods from the concern and connection of both appellants. They were found in physical possession of the goods. Therefore there is no scope at all to hold that both appellants to be innocent - Decided against assessee.

Summary

Issues:
1. Smuggling of goods and penalties imposed on the appellants.
2. Allegations brought by Customs and adjudication order.
3. Questions regarding confiscation of goods, packages, and duty recovery.
4. Liability to penalty under Customs Act.

Analysis:
1. The judgment deals with a case involving smuggling of goods, where one appellant was found to be the mastermind and principal smuggler, while another was a conduit. Penalties of Rs.10 lakh and Rs.25 lakh were imposed on the appellants based on the discovery of offending goods through a panchnama.

2. Customs alleged that the goods were valued at Rs.1,29,55,750 and assessable value at Rs.88,88,877, leading to confiscation as prohibited goods. The goods were concealed and not declared to Customs, with no clearance sought through the red channel. The adjudicating authority found cogent evidence justifying the penalties imposed.

3. The adjudication order addressed four key questions. Firstly, it determined that the goods imported in commercial quantities were liable for confiscation under various sections of the Customs Act, as they were not declared and imported in violation of regulations. Secondly, it held that the packages used for concealing the goods were also subject to confiscation. Thirdly, it clarified that no duty and cess were recoverable due to the absolute confiscation of goods. Lastly, it discussed the liability to penalty under specific sections of the Customs Act.

4. The appellants failed to provide a defense proving the goods were not smuggled. The adjudicating authority found the mastermind behind the smuggling based on statements and evidence, dismissing claims of innocence. The active role and possession of the goods by the appellants led to the rejection of their appeals, as their involvement was established beyond doubt.

This comprehensive analysis of the judgment highlights the issues of smuggling, penalties, confiscation, duty recovery, and liability to penalty under the Customs Act, providing a detailed overview of the legal proceedings and findings.