The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), held that Penalty under Customs Act on ‘smuggling ‘not valid when authorities act without evincing illicit trafficking.
A lady was intercepted with ‘diamond studded jewellery’ and a ‘Hublot’, wristwatch, totally valued at Rupes two crores at the ‘green channel’ of Chatrapati Shivaji Maharaj International Airport (CSMIA), Mumbai after arrival from Singapore and confesses that she is the ‘carrier’ in a family ring for smuggling of the valuable articles.
Apparently, her father and mother run established jewellery outlets in Singapore while she, with her uncle, handles the Indian end. True to script, she also carries the inevitable diary and mobile phone for deciphering by sleuths intent on destruction of economic saboteurs.
A follow up raid at the establishments run by her uncle, uncovers 41 nos. of precious stones and jewellery valued at Rupees two crores that, for the present, were unaccounted in the stock of M/s Vihari Jewels, the appellant. The uncle also manufactures and trades in loose diamonds and jewellery under the name and style of Rajesh Brothers and Tisya Jewels.
A Bench consisting of CJ Mathew, Technical Member and Ajay Sharma, Judicial Member observed that “Licit possession in the course of domestic transaction having been satisfactorily furnished, without being controverted by the lower authorities, on the part of owners of the impugned goods, the arbitrary arrogation of empowerment to subject the sellers to the presumption of having been in possession of ‘smuggled goods’ sans authority of law to do so deprives the finding of liability to penalty under section 112 of Customs Act, 1962 of legal sanctity.”
“Without evincing illicit trafficking, in the form in which it was recovered from customers, from outside the country, even by the stretched framework of preponderance of probability, there is no onus on the appellants to establish that the conjectures entertained by customs authorities are incorrect” the Tribunal said.
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