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TMI Blog2010 (7) TMI 419X X X X Extracts X X X X X X X X Extracts X X X X ..... above Appeal was admitted by this Court on 15th April 2009 on the following substantial question of law :- "Whether the order of the CESTAT in confirming the findings of the Commissioner of not imposing penalty under Section 112(a) (b) of the Customs Act, 1962, is based on no evidence or partly relevant or partly irrelevant evidence and is otherwise perverse and arbitrary?" Facts :- 3.Specific information was received by the SIIB (Import) on 23rd May 2006 from an unregistered informer that the supply vessel 'Sea Bulk Toota' is indulging in illegal sale of smuggled diesel to barges in and around Mumbai Docks. The SIIB (Import) was also informed that presently the vessel was anchored near Chinai Tekdi, opposite Ferry Wharf and will be delivering around 30,000 to 40,000 litres of diesel to the barges in the night of 23rd May 2006 around 11.00 p.m. Based on the information, the SIIB (Import) made necessary arrangements for conducting the search in the night of 23rd May 2006 itself. 4. On the same night, a NGO had approached SIIB (Import) Unit with an information that smuggled diesel was being off-loaded on small barges/fishing crafts near Mora Jetty. The staff of SIIB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s admitted by the Chief Engineer of the supply vessel, was sold to barge 'ML Anchor' from the supply vessel 'Sea Bulk Toota' . During the search of the barge US $ 18600.00 were recovered from a gunny bag of rice in which it had been concealed and was to be given to the Chief Engineer of the vessel 'Sea Bulk Toota' for the diesel received by the barge but which could not be given due to the raid by Customs party. 7.After this, the team of Custom Officers alongwith the Panchas escorted the Tandel of the barge Mr. Viplav Kumar Rai to the supply vessel 'Sea Bulk Toota' and while two officers stood to guard near the Tandel of the barge, the remaining staff alongwith the Panchas commenced the search of the supply vessel which resulted in the recovery of unaccounted foreign currency of US$ 27050 from the cabin of the Chief Engineer Mr. Errol Tennyson. The currency had been concealed among readymade garments in a black coloured Zipper bag in the cabin of Mr. Errol Tennyson. Preliminary interrogation of Chief Engineer Mr. Errol Tennyson revealed that this money was the sale proceeds of the sale of diesel on earlier occasions. All the foreign currency amounting to US $ 45,650.00 equivalent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that the Order-in-Original is not legal and proper and directed that an application be made to CESTAT for the correct determination of - (i) Whether in the facts and circumstances of the case, the order of the Commissioner is correct, legal and proper? (ii) Non-imposition of the penalty on the Respondent Nos. 1 and 2 under Section 112 of the said Act is correct, legal and proper? 12.The Revenue filed an Appeal under Section 129D(4) of the said Act before the CESTAT, which Appeal was dismissed vide its order dated 5th August 2008. 13. Being aggrieved by the order of the CESTAT dated 5th August 2008, the Appellant filed the above Appeal which as stated above, was admitted on 15th April 2009 on the question of law set out in paragraph 2 above. Submissions :- 14.Mr. Jetly, learned Advocate appearing for the Appellant has submitted that the order dated 5th August 2008 passed by the CESTAT is arbitrary, perverse and lacks any vestige of fairness and is therefore, liable to be set aside. The CESTAT has ignored the evidence on record, more particularly, the statement of Mr. Tennyson, Chief Engineer of the supply vessel 'Sea Bulk Toota', wherein he states that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the barge that it was not possible that such a big fraud could occur on the vessel without the knowledge of Respondent No. 1-Captain and the statement of the third mate that he had asked Respondent No. 1-Captain as to why the barge had come alongside the vessel and he was told to go to his cabin and take rest, would also not be sufficient to implicate the Respondent No. 1-Captain in the crime. The submission made by the Revenue that the Respondent No. 1-Captain has in his statement admitted the knowledge of illegal sale of diesel for profit and has admitted purchase of diesel from vessel coming from U.A.E. and supply of 40 Mts of diesel to the barge 'M.L. Anchor', is belied by the statement of the Respondent No. 1-Captain itself, as recorded by the Customs Authorities. 18. It is submitted that the CESTAT has therefore, after taking note of the entire evidence pertaining to the case of the Respondent No. 1-Captain correctly taken a view that the findings reached by the Adjudicating Authority in dropping the proceedings initiated against the Respondent No. 1-Captain, are correct and are well-reasoned and do not require any interference. It is, therefore, submitted that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated against the Respondent No. 1-Captain, are correct and are well-reasoned and do not require any interference. 22.In our view, Mr. Sankalecha, learned Advocate appearing for the Respondent No. 1-Captain is correct in his submission that mere statement of the Chief Engineer or the statements of the third mate and Tandel can by no stretch of imagination, be considered as enough evidence to implicate the Respondent No. 1-Captain as being party to the crime and imposing penalty on him under Section 112 of the said Act. 23. As regards Respondent No. 2, the Adjudicating Authority as well as the CESTAT has held that none of the noticees have stated or implicated him in financing the purchase or sale of illegal diesel. Except for the statement that Respondent No. 2 was in touch with Mr. Viplav Kumar Rai, Mr. Tennyson, Mr. Ashok Sasthe, there is no other evidence to implicate him in the crime. 24.We, therefore, hold that there is no direct evidence against Respondent No. 1-Captain and/or Respondent No. 2 to implicate them in the crime. The statements relied upon by the appellants of Mr. Tennyson, Mr. Viplav Kumar Rai and Mr. Reuben James S. Cruz, at the most raises some suspi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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