2019 (5) TMI 671 - AT - Customs

Smuggling - Red Sanders - Reliability on statements before the Customs officer under Section 108 of the Customs Act, 1962 - Absolute confiscation - penalty u/s 114 and 114AA of the Customs Act, 1962 - HELD THAT - The original authority has discussed the role played by the appellant in the alleged smuggling of Red Sander which is a prohibited item for export. Further, the confessional statement of the appellant and other persons who were involved in the smuggling fully corroborated by the documentary as well as circumstancial evidences of the case and the statements of the co-accused - The objection of the appellant that cross-examination was denied is not sustainable in view of the various decisions relied upon by the Revenue cited supra wherein it has been held that cross-examination cannot be claimed in every case as a matter of right. Penalty u/s 114 and 114AA of the Customs Act, 1962 - HELD THAT - With regard to quantum of penalty imposed on the appellant under Section 114 and 114AA of the Customs Act, 1962, it is on a higher side because the original authority has imposed penalty of ₹ 2.5 lakhs each under Section 114 and Section 114AA on the main accused viz. Mr. Abdul Razak and Shri K.P. Sibu. In para 48(f) and 47 of the Order-in-Original, original authority has observed that Mr. Abdul Razak @ Ashraf is the prime person in the attempted smuggling of Red Sander and Mr. Sibu was the Operation Manager of the smuggling syndicate who coordinated the operation and he was also instrumental in tampering with the latches of the container so as to enable to open Customs sealed container without breaking up the seals - the appellant has rightly been convicted under Sections 114 and 114AA of the Customs Act, 1962 - penalty upheld but quantum reduced. Appeal dismissed - decided against appellant.

Summary

Issues:
- Appeal against the order rejecting appellant's appeal in a case involving smuggling of Red Sander Logs and imposition of penalties under Sections 114 and 114AA of Customs Act, 1962.

Analysis:
1. Facts of the Case:
The appellant, owner of a freight forwarding company, was involved in a case where a container was found to contain Red Sander Logs prohibited for export. The container was restrained, leading to the recovery and seizure of the logs. The appellant was accused of being the main contact of a financier and conspiring with others in the smuggling operation.

2. Appellant's Arguments:
The appellant argued that neither they nor their employees were involved in handling the container with Red Sanders. They claimed lack of knowledge about the contents and challenged the reliance on co-accused statements without cross-examination. The appellant also contested the financial enrichment allegation and the penalty imposition under Sections 114 and 114AA.

3. Revenue's Defense:
The Revenue defended the order, highlighting the appellant's role in coordinating the smuggling operation. They argued that the confessional statements and circumstantial evidence supported the charges against the appellant. The Revenue cited legal precedents to support the denial of cross-examination as a right.

4. Judgment:
The Tribunal found the appellant involved in the smuggling based on confessional statements and evidence. The denial of cross-examination was deemed acceptable, citing legal precedents. While upholding the conviction, the Tribunal reduced the penalty imposed on the appellant, considering the penalties imposed on the main accused. The appeal was ultimately dismissed with modified penalty amounts.

5. Conclusion:
The Tribunal upheld the conviction of the appellant in the smuggling case but reduced the penalty amount. The judgment emphasized the importance of confessional statements and circumstantial evidence in establishing guilt. The legal principles regarding cross-examination and penalty imposition were crucial in determining the outcome of the appeal.