2024 (12) TMI 171 - AT - Customs

Smuggling - Confiscation of the seized battery scrap 14200 kg of Foreign Origin Third Country Origin - Retraction of Statements - case is based on the interception of the truck containing the said goods and on examination the goods were found to be battery scrap of third country origin - HELD THAT - On the basis of the objective evaluation of the evidences the authorities below have arrived at the conclusion that the impugned goods are smuggled goods smuggled through unauthorized routes from Nepal. Appellant is the master mind in the entire episode has been subjected to penalty of Rs.25, 000/- as per the impugned order which is not excessive and needs to be upheld which also is not harsh taking into account the fact that battery scrap falls under the category of Hazardous Goods to dangerous for the environment and eco system of our country. Appellant has claimed that the Old and Used Battery Scrap seized and confiscated was procured by him locally through local vendors and hence no violation of Customs Act 1962 can be alleged. The story fabricated by the appellant about local procurement of scrap cannot be substantiated simply for the reason that he has in his own statement admitted that he do not maintain any record of procurement of the Battery Scrap. Old and used battery scrap is being Hazardous Goods and the same are governed by BATTERIES (MANAGEMENT AND HANDLING) RULES 2001. As per these rules used batteries don t get disposed off in the open market. Rule 4 related to responsibilities of the manufacturer importer assembler and re-conditioner. The used batteries are not freely traded in the market. They to be collected back by the manufacturer dealer or importer at the time of sale of new batteries and thereafter transported to recyclers in the manner prescribed. The entire story made by the appellant to the effect that he has procured these batteries scrap from the local market goes contrary to the specific provisions of these rules and hence cannot be relied upon. If that is so the entire defense of the appellant fails. The statements of the of the co-noticee relied in the proceedings were retracted only in the defence reply filed by them to the show cause notice and adjudicating authority has not found any merits in the retraction made during the course of adjudication proceedings as per the defence reply filed by those co-noticees. The findings recorded by the lower authorities on the retraction made by co-noticees have not been challenged by the said co-noticee have thus acquired finality. The Additional Commissioner has in the impugned order imposed a penalty of Rs. 25, 000/- on the appellant whereas penalty Shri Shakir who was to be the actual beneficiary of these goods penalty imposed is only Rs 10, 000/- - penalty of Rs 10, 000/- has been imposed on Shri Santosh Kumar Gupta who was equal accomplice in the case with Appellant as he had gone along with the appellant for loading the scrap on truck at Nepal border with the appellant and was responsible for arranging the invoice of the appellant as cover up during the transportation - penalty imposed reduced to Rs 17, 500/-. Appeal partly allowed.

Issues Involved:

1. Confiscation of Battery Scrap and Vehicle
2. Imposition of Penalty on Noticees
3. Reliability and Retraction of Statements
4. Compliance with Environmental Regulations
5. Evaluation of Evidence and Burden of Proof

Issue-wise Detailed Analysis:

1. Confiscation of Battery Scrap and Vehicle:

The primary issue was the confiscation of 14,200 kg of battery scrap of foreign origin valued at Rs. 7,10,000/- under Section 111(b) & 111(d) of the Customs Act, 1962. The tribunal upheld the confiscation but allowed the option to redeem the goods by paying a fine of Rs. 60,000/- along with applicable duty and charges. The vehicle used for transportation, valued at Rs. 10,00,000/-, was also confiscated under Section 115(2) of the Customs Act, but a redemption option was provided for a fine of Rs. 50,000/-. The tribunal found that the goods were smuggled from Nepal through unauthorized routes, violating customs notifications and the Foreign Trade Policy.

2. Imposition of Penalty on Noticees:

Penalties were imposed on eight noticees under Section 112 of the Customs Act for their involvement in the smuggling activities. The penalties ranged from Rs. 3,000/- to Rs. 25,000/-. The tribunal noted that the driver, cleaner, and agents involved in the transportation and procurement of the smuggled goods were liable for penalties. The appellant, who claimed ownership of the goods, was initially penalized Rs. 25,000/-, which was later reduced to Rs. 17,500/- due to inconsistencies in penalties imposed on other involved parties.

3. Reliability and Retraction of Statements:

The tribunal considered the statements made under Section 108 of the Customs Act as reliable evidence. The statements by the driver, cleaner, and agents confirmed the smuggling activities. Although these statements were retracted later, the tribunal found the retractions inadmissible due to their belated nature. Citing judgments, the tribunal emphasized that statements made before customs officers are substantive evidence and retractions must be made promptly to be considered valid.

4. Compliance with Environmental Regulations:

The tribunal addressed the appellant's claim that the battery scrap was procured locally and not smuggled. It highlighted the non-compliance with the Batteries (Management and Handling) Rules, 2001, which regulate the collection and recycling of used batteries. The appellant's failure to maintain records of procurement contradicted these rules, undermining the claim of local procurement and supporting the smuggling allegation.

5. Evaluation of Evidence and Burden of Proof:

The tribunal evaluated the evidence, including the confessional statements and the circumstances of the case, to conclude that the goods were smuggled. It cited legal precedents to establish that the department is not required to prove its case with mathematical precision but must establish a probability of the facts. The burden of proof was deemed to have been discharged by the department, leading to the conclusion that the appellant was involved in smuggling activities.

In summary, the tribunal upheld the confiscation of the battery scrap and vehicle, imposed penalties on the involved parties, and reduced the penalty on the appellant. The decision was based on the reliability of the statements, non-compliance with environmental regulations, and the evaluation of evidence supporting the smuggling allegations.

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