2022 (5) TMI 814 - HC - Customs

Condonation of delay in filing appeal - writ petition has been filed long after the expiry of limitation - Penalty u/s 114(i) - illegal activities with the tenants - tenant was using the property, which was rented out by the petitioner for storing turtles and tortoises. - smuggling and export of tortoises from India - levy of penalty u/s 114(i) of the Customs Act, 1962 - HELD THAT - No doubt the petitioner has missed the statutory period of limitation prescribed under Section 128 of the Act. As per Section 128 of the Act, a statutory appeal has to be filed within a period of 60 days from the date of receipt of the order before the Appellate Commissioner. As per the proviso to Section 128(1) of the Act, a further grace period of 30 days is given to an assessee or a person aggrieved by the decision passed under the Act to file such appeal with an application to condone the delay. The power to condone the delay is now circumscribed under Section 128 of the Act. Therefore, the petitioner cannot file an appeal before the Appellate Commissioner beyond the statutory period of limitation. Even if such an appeal is filed, such appeal will be rejected - However, a reading of the impugned order and the statement of the petitioner make it clear that there is no admission of liability by the petitioner that the petitioner was conniving with the said Kishore and other exporters, who were engaged in export of turtles/tortoises contrary to the provisions of the Customs Act, 1962 and other enactments and Wildlife Protection Act, 1972 and CITES. The impugned order nowhere discloses that the petitioner was actively engaged in along with the other co-noticees to export turtles and tortoises in violation of Customs Act, 1962 and other enactments and Wildlife Protection Act, 1972 and cites. The imposition of penalty of Rs.4,50,00,000/- under Section 114(i) of the Customs Act, 1962 makes an appellate remedy illusory for a small time agriculturist, who may or may not be directly involved in the alleged smuggling of turtles and tortoises contrary to the provisions of the Customs Act, 1962, Wildlife Protection Act, 1972 and cites. Penalty under Section 114(i) of the Customs Act, 1962 will apply where a person by his act or omission renders the goods liable for confiscation under Section 113 or abets the doing or omission of such an act. Merely because the petitioner had rented out the godown to the other co-noticees, ipso facto would not mean that the petitioner was actively abetted in the commission of the Act, it would have rendered in the goods liable for confiscation. It is quite possible that the tenant was engaged in illegal activities, which would be violation of the Customs Act, 1962, Wildlife Protection Act, 1972, CITES and any other enactments. Imposition of penalty of Rs.4,50,00,000/- makes the appellate remedy illusory for a small time agriculturist, who had the misfortune of renting out the property to a person, who had actually indulged in illegal export - case remitted back to the 2nd respondent to pass fresh orders on merits and in accordance with law after ascertaining clearly as to whether the petitioner had indeed actively abetted in the commission of the offence, which attracted the provisions of the Customs Act, 1962, so as to attract penalty under Section 114(i) of the Customs Act, 1962. The writ petition stands partly allowed.

Summary

Issues:
Challenge to impugned order imposing penalty under Section 114(i) of the Customs Act, 1962; Delay in filing the writ petition; Allegation of involvement in illegal activities with tenants; Ownership and control over the premises where turtles/tortoises were found during a search; Interpretation of statutory appeal period under Section 128 of the Act; Application of penalty under Section 114(i) of the Customs Act, 1962; Lack of evidence of active abetment in illegal activities by the petitioner; Remittal of the case for fresh orders.

Analysis:
The petitioner challenged the impugned order imposing a penalty under Section 114(i) of the Customs Act, 1962, issued by the 2nd respondent, the Joint Commissioner (CCO), Trichy. The petitioner, a small-time agriculturist, rented out a portion of his property to tenants involved in smuggling tortoises, leading to the penalty imposition. The petitioner contended non-involvement in any crime warranting the penalty, emphasizing lack of proof of illegal activities with tenants. The respondents argued for dismissal due to the petition's delayed filing, highlighting the petitioner's admission of renting premises for storing turtles and tortoises.

The investigation revealed the petitioner's ownership and control over the shed where turtles/tortoises were found. The court considered the statutory appeal period under Section 128 of the Act, emphasizing the limitation and grace period for filing an appeal. While the petitioner missed the appeal deadline, the court noted the absence of a clear admission of connivance in illegal activities. The court scrutinized the petitioner's statement, indicating no awareness of banned storage or connivance with exporters. The impugned order lacked evidence of active involvement in smuggling, making the penalty imposition unjust for the petitioner.

The court referred to the penalty provision under Section 114(i) of the Customs Act, 1962, applicable when a person renders goods liable for confiscation or abets such actions. The court found the penalty disproportionate for a small-time agriculturist indirectly linked to the smuggling operation. Consequently, the court set aside the impugned order concerning the petitioner, remitting the case for fresh orders to ascertain the petitioner's active abetment in the offense. The decision did not affect the appeals of other co-noticees, ensuring an independent review by the Tribunal. The writ petition was partly allowed, with no costs incurred, and related petitions were closed accordingly.