2017 (10) TMI 983 - AT - Customs

Smuggling - red sandal - Held that - in this case only the truck driver has given inculpatory statement that on the instruction of the respondent, the Red Sandal was loaded in the truck but no other evidence is on record to implicate the respondent in the proceedings. Moreover, the person who found to be the owner of Red Sandal, penalty of ₹ 5,00,000/-, has been imposed, whereas on the respondent, the penalty was imposed to the tune of ₹ 50,00,000/- without any reason - appeal dismissed - decided against Revenue.

Summary

Issues: Appeal against penalty reduction from ?50,00,000 to ?2,00,000 for smuggling Red Sandal; Allegation of stern action due to prohibited goods; Lack of evidence against respondent; Discrepancy in penalties imposed.

Analysis:
1. Reduction of Penalty: The appeal was filed by the Revenue against the order of the ld. Commissioner (Appeals) reducing the penalty from ?50,00,000 to ?2,00,000 imposed on the respondent in a case involving the smuggling of Red Sandal. The appellant argued for stern action due to the nature of the prohibited goods involved, contending that no mercy should be shown to the respondent.

2. Smuggling Allegation: The case revolved around the respondent being the owner of a vehicle used in the smuggling of Red Sandal. The incident occurred when customs officers, tipped off about Red Sandal being loaded on a truck, found the wood disguised as Sheesham Wood. The penalty was initially set at ?50,00,000, which was later reduced by the ld. Commissioner (Appeals) to ?2,00,000, prompting the Revenue's appeal.

3. Lack of Evidence: During the proceedings, it was noted that only the truck driver had provided a statement incriminating the respondent in the smuggling. However, no substantial evidence beyond the driver's statement was presented to implicate the respondent. Additionally, another individual found to be the owner of the Red Sandal faced a penalty of ?5,00,000, significantly lower than the penalty imposed on the respondent.

4. Discrepancy in Penalties: The ld. Commissioner (Appeals) highlighted the discrepancy in penalties imposed, noting that the respondent's alleged involvement was primarily based on the driver's statement. The Commissioner observed that the respondent's role was not clearly defined in the proceedings, and no active involvement or monetary gains were established. Consequently, the penalty reduction was deemed appropriate given the lack of substantial evidence against the respondent.

5. Judicial Decision: Upon reviewing the case records and the observations of the ld. Commissioner (Appeals), the Member (Judicial) found no fault with the impugned order. The decision to reduce the penalty from ?50,00,000 to ?2,00,000 was upheld, considering the absence of concrete evidence implicating the respondent beyond the driver's statement.

6. Final Verdict: The appeal filed by the Revenue was dismissed, affirming the decision to reduce the penalty imposed on the respondent in the smuggling case involving Red Sandal. The judgment emphasized the importance of substantial evidence and proper delineation of roles in determining penalties in such cases.