2017 (12) TMI 1455 - AT - Customs

Penalty u/s 112 of CA - smuggling - It appeared that the Pashmina shawls in question was imported into India contrary to prohibitions imposed under the Customs Act and were liable to confiscation - Held that - the allegations in the show cause notice are only presumptive. There is no evidence on record by which this appellant can be linked with the seized Pashmina shawls at Barhni LCS - almost all the goods were found to be legally imported. The seizure of a small part of the goods originally seized on the belief of being smuggled is bad and not tenable in view of adequate evidence led by the appellant - confiscation with penalty set aside - appeal allowed - decided in favor of appellant.

Issues Involved:
1. Legality of the penalty imposed under Section 112 of the Customs Act.
2. Confiscation of Pashmina shawls and other foreign origin goods.
3. Legality of the seizure of goods from the appellant's premises.
4. Evidence linking the appellant to the smuggled goods.

Analysis of the Judgment:

1. Legality of the Penalty Imposed Under Section 112 of the Customs Act:
The central issue was whether the penalty of ?1,00,000/- imposed on the appellant under Section 112 of the Customs Act was justified. The Tribunal found that the allegations against the appellant were "only presumptive" and lacked concrete evidence. The appellant's connection to the seized Pashmina shawls at Barhni LCS was not established beyond the presence of a visiting card. Consequently, the penalty under Section 112 was deemed unjustified and was set aside.

2. Confiscation of Pashmina Shawls and Other Foreign Origin Goods:
The Pashmina shawls valued at ?1 crore were intercepted and confirmed to be of Chinese origin. These shawls were seized for contravening Section 3 of the Foreign Trade Regulations Act, 1992, and Notification No.9/96-Cus. The shawls were ordered to be absolutely confiscated. However, the Tribunal found that the appellant was not sufficiently linked to these shawls and thus set aside the penalty related to their confiscation.

3. Legality of the Seizure of Goods from the Appellant's Premises:
Goods valued at ?9,79,925/- were seized from the appellant's premises in New Delhi. The appellant provided documents to prove that these goods were legally imported and duty-paid. The Tribunal noted that almost all the goods were found to be legally imported and ordered their provisional release. The confiscation of the goods valued at ?1,70,650/- was also set aside due to adequate evidence of their legal importation.

4. Evidence Linking the Appellant to the Smuggled Goods:
The Tribunal scrutinized the evidence presented, including statements from various individuals and the presence of a visiting card. It was found that there was no substantial proof linking the appellant to the smuggled Pashmina shawls. The statements and documents did not provide a direct connection to the appellant's involvement in smuggling activities. Hence, the Tribunal concluded that the allegations were based on presumptions without concrete evidence.

Conclusion:
The Tribunal allowed the appeal, setting aside the penalty of ?1,00,000/- and the confiscation of goods valued at ?1,70,650/-. The appellant was entitled to consequential benefits as per the law, as the evidence against him was found to be insufficient and presumptive. The judgment emphasized the necessity of concrete evidence in imposing penalties and confiscation under the Customs Act.

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