2021 (10) TMI 855 - AT - Customs

Levy of Penalty u/s 114 of the Customs Act, 1962 - Smuggling - prohibited goods or not - Export of Red Sander logs under cotton tufted floor mats- colour ASTD - also the fasteners (rivets) found on the Customs Sealing Point (latches) and Steamer Agent s Sealing Point (latches) of the container were found tampered - illegal omissions - scope of Section 107 IPC - HELD THAT - The appellants plead total ignorance about the attempted smuggling of red sanders. The contention of the appellants that they kept the blank signed letter heads in the vehicle at the time of sale is too fanciful to digest. It is admitted by Shri A. Mohamed Naseer that there was omission on his part by giving the signed blank letter heads to Shri Farooq Basha. There is also an admission on the part of Shri Farooq Basha that he committed a mistake by leaving the said blank letter heads in the vehicle at the time of sale. These are serious omissions on the part of the appellants which has aided in the attempt for smuggling. Whether omissions are illegal omissions so as to be an ingredient to fall within the third limb of Section 107 IPC? - HELD THAT - An omission can be considered to be illegal if what has been omitted was required to be done by such person under law. Thus, there should have been an obligation to do a particular act under some law. Such obligation may be under any Act, Rules, Regulations, Instructions. In the present case, entry into CFS/Port is restricted. Access to this area can be obtained only if a request is made by the transport agency along with recommendation letter of the Trailor Organizers Association. It is also necessary to give details of the driver and the trailer truck/lorry in such applications. After obtaining the gate pass, the transport agency is required to keep a record with regard to the movement of the vehicles for which he has obtained gate pass. These are regulations, which the appellants have to oblige with care and caution. The department need not establish facts beyond reasonable doubt. In quasi-judicial proceedings, the test is that of preponderance of probabilities. These are facts which stands admitted/established and also facts which are probable. When the established facts and the probable facts give a wholesome connection, the test of preponderance of probability would stand established. The signatures in the letters being admitted, the appellant cannot wriggle out of the liability by putting forward a plea of passing over blank signed letter heads by mistake. Similarly, the vehicle being owned by Shri Farooq Basha, he cannot escape by contending that during the relevant time the vehicle was sold. The case of appellants that blank letter heads were left by omission in the vehicle which was sold is only put forward to get out of the charges levelled against them and cannot be accepted - department has been able to establish the guilt/charge of abetment on the part of appellants. The penalties imposed on each of the appellants are legal and proper - Appeal dismissed.

Summary

Issues Involved:
1. Allegation of smuggling prohibited goods (Red Sanders) by misdeclaring them as "cotton tufted floor mats".
2. Involvement and liability of the appellants under Section 114 of the Customs Act, 1962 for abetment in the smuggling attempt.
3. Validity of penalties imposed on the appellants.

Detailed Analysis:

1. Allegation of Smuggling Prohibited Goods:
The Directorate of Revenue Intelligence (DRI) received intelligence that Red Sanders, a prohibited good, was being smuggled out of the country disguised as "cotton tufted floor mats" (CTFM). The container was intercepted and found to contain Red Sanders logs valued at ?3,61,60,000 along with a few floor mats. The shipping bill for the container was filed by a logistics company, and the declared cargo was 100% CTFM. The fasteners on the container were tampered, indicating unauthorized access and substitution of goods.

2. Involvement and Liability of the Appellants:
The appellants were implicated based on documents and investigations:
- Shri A. Mohamed Naseer: Proprietor of M/s. N.K. Transport, whose letterheads were used to obtain gate passes for the trailer truck carrying the container. He admitted to giving blank signed letterheads to his cousin, Shri Farooq Basha.
- Shri Farooq Basha: Owner of the trailer truck used for transporting the container. He claimed to have sold the truck to Shri Anslam before the incident, but the sale agreement was produced only after the investigation began and was deemed an afterthought.

3. Validity of Penalties Imposed:
The adjudicating authority imposed penalties under Section 114 of the Customs Act, 1962, for abetment in the smuggling attempt. The appellants argued that they had no knowledge of the smuggling and that the blank letterheads were misused without their knowledge. The Tribunal analyzed the definition of "abetment" under Section 107 of the Indian Penal Code (IPC), which requires intentional aiding or conspiracy.

Findings:
- The Tribunal found that the appellants' actions (or omissions) facilitated the smuggling attempt. The letterheads provided by Shri Mohamed Naseer and the ownership of the trailer by Shri Farooq Basha were crucial in obtaining the gate passes and carrying out the smuggling.
- The Tribunal did not accept the appellants' defense that the blank letterheads were left in the vehicle by mistake or that the vehicle was sold before the incident. The sale agreement was considered an afterthought and not credible.
- The Tribunal concluded that the appellants' omissions were illegal as they failed to comply with the regulations for securing transport and entry into the port.

Conclusion:
The penalties imposed on the appellants were upheld as legal and proper. The Tribunal dismissed the appeals, affirming the findings that the appellants abetted the smuggling of Red Sanders by their actions and omissions. The judgment emphasized the importance of adhering to regulations and the consequences of failing to do so, especially in cases involving prohibited goods.