1987 (6) TMI 162 - AT - Customs

Summary

Issues Involved:
1. Shortage of 14 still cameras and lack of documentary evidence for their removal.
2. Lack of evidence for the lawful import/purchase of 28 cameras.
3. Alleged contravention of various provisions of the Customs Act and Import Trade (Control) Order.
4. Alleged failure to maintain proper accounts and obtain proper vouchers.
5. Imposition of penalty under Section 112 of the Customs Act.

Issue-wise Detailed Analysis:

1. Shortage of 14 still cameras and lack of documentary evidence for their removal:
On 5-12-1984, a preventive officer checked the appellant firm's stock and found 14 still cameras short. Shri Dass, a partner of the appellant firm, could not produce any documentary evidence for their removal or absence. The Customs authorities seized the cameras under Section 110 of the Customs Act on the reasonable belief that they had been smuggled into India and were liable to confiscation.

2. Lack of evidence for the lawful import/purchase of 28 cameras:
In addition to the shortage, Shri Dass could not provide evidence for the lawful import or purchase of 28 cameras, which were entered in the notified goods register as required under Chapter IV-A of the Customs Act. These cameras, valued at Rs. 1,61,200/-, were also seized under Section 110 of the Customs Act.

3. Alleged contravention of various provisions of the Customs Act and Import Trade (Control) Order:
A show cause notice dated 3-6-1985 was issued to the appellant firm and Shri R.C. Dass, alleging contravention of:
- Clause 3(i) of the Import Trade (Control) Order, 1955 under Sections 3 and 4A of the Imports and Exports (Control) Act, 1944.
- Provisions of Chapter IV-A of the Customs Act, 1962, and the rules made thereunder.
- Baggage (Condition of Exemption) Rules, 1975.
- ITC Public Notice No. 27/80 dated 15-7-1980.
The seized goods were alleged to be liable to confiscation under Section 111(d), (p), and (o) of the Customs Act.

4. Alleged failure to maintain proper accounts and obtain proper vouchers:
The appellant firm was accused of not maintaining a true and complete account of books as specified under the Rules, contravening Section 11E of the Customs Act, 1962. This rendered the 14 cameras found short liable to confiscation under Section 111(p) of the Customs Act. It was also alleged that the appellants knowingly acquired, possessed, kept, purchased, sold, stored, and dealt with goods liable to confiscation under Section 111, making them liable to penal action under Section 112 of the Customs Act.

5. Imposition of penalty under Section 112 of the Customs Act:
The appellant firm denied the charges, stating that all goods were duly accounted for and that relevant documents were produced at the time of seizure. They claimed that the Customs Officers had no jurisdiction to invoke provisions other than those of Chapter IV-A of the Customs Act and that there was no evidence of illegal acquisition. They argued that the penalty imposed by the Collector was contrary to the facts and findings, and that the imposition of penalty without a finding of mens rea, guilty knowledge, or malafide was improper and illegal.

Collector's Findings:
The Collector found that M/s Dass Photo Electronics had been purchasing cameras brought in as baggage by passengers, which is prohibited unless the market value depreciates by 50%. However, the Collector did not find evidence that the appellant firm obtained the cameras in bulk, instigated smuggling, or transacted in smuggled items. Consequently, the Collector did not order the confiscation of the seized cameras but imposed a token penalty of Rs. 10,000/- for not maintaining proper accounts and obtaining proper vouchers.

Appellate Tribunal's Decision:
The Tribunal noted that the Collector's findings were vague and lacked discussion of evidence. The term "collusion" used by the Collector was strong but not supported by detailed evidence. The Tribunal found the penalty imposed under Section 112 to be inconsistent with the Collector's refusal to confiscate the cameras. The Tribunal allowed the appeal and directed the Collector to adjudicate afresh on the aspect of penalty alone, providing definite findings after considering all pleas and evidence on record.

Conclusion:
The appeal was disposed of with directions for the Collector to reassess the penalty, considering all evidence and providing clear findings.