2005 (12) TMI 495 - AT - Customs

Summary

Issues Involved:
1. Imposition of penalty under Section 112(a) and 112(b) of the Customs Act, 1962 on the appellant for illicit acquisition/possession of smuggled yarn in a shed allotted by the Director of Industries.
2. Allegation of knowingly dealing with smuggled goods found in a truck by the appellant.

Issue 1: Imposition of Penalty under Section 112(a) and 112(b) of the Customs Act, 1962
The Appellate Tribunal CESTAT, Mumbai, considered the case where a penalty of Rs. 1,50,000 was imposed on the appellant for illicit acquisition/possession of smuggled yarn in a shed allotted by the Director of Industries. The Customs officers apprehended a truck carrying packages of CTC tea, which were found to contain polyester yarn of foreign origin. Further investigations led to the discovery of the shed where illicit activities took place. However, the tribunal noted that there was no evidence linking the appellant to the shed or the activities conducted there. It was established that the appellant was not in physical possession of the shed premises during the relevant period, and there was no indication that the individual involved was acting with the appellant's consent or knowledge. Consequently, the tribunal concluded that there was no basis to establish the appellant's involvement in the smuggling activities related to the goods found in the truck. Therefore, the penalty imposed under Section 112(a) and 112(b) of the Customs Act, 1962 was set aside, and the appeal was allowed.

Issue 2: Allegation of Knowingly Dealing with Smuggled Goods
The tribunal further analyzed the allegation of knowingly dealing with smuggled goods by the appellant. It was observed that there was no evidence to suggest that the goods held liable for confiscation as smuggled were knowingly dealt with by the appellant. The tribunal emphasized that without concrete proof of the appellant's involvement or awareness of the illicit activities, the penalty under Section 112(a) and 112(b) of the Customs Act, 1962 could not be upheld. Therefore, considering the lack of evidence linking the appellant to the smuggling operation or the shed where the activities took place, the penalty imposed on the appellant was deemed unjustified. As a result, the penalty was set aside, and the appeal in favor of the appellant was allowed by the tribunal.

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