Confiscation of 22,120 Kgs of Smuggled Black Pepper Upheld: CESTAT Reduces Penalty under Customs Law [Read Order]

The appeal was filed by Shree Praveen Kasera, proprietor of Shri Radhey Sales Corporation, Delhi, challenging Order-in-Original No. CCP/NER/21/2020 dated 19 November 2020 passed by the Commissioner of Customs (Preventive), Shillong.

The case arose from specific intelligence received by Customs authorities that two trucks were transporting black pepper of foreign origin without lawful documents. On 30 April 2019, officers intercepted two vehicles loaded with 212 and 144 HDPE/jute bags concealed under flattened cartons.

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The bags were marked “Produce of Vietnam,” and no evidence of legal import was produced at the time of interception. Statements from the truck drivers confirmed that they had been engaged by CMC Logistics to deliver the consignment from Imphal to Delhi for ₹1 lakh, with an advance of ₹30,000 already paid.

On further investigation, the Department searched the premises of CMC Logistics but found no incriminating documents or goods. The purported operator, one Sonu Kumar of Haryana, and his staff were untraceable.

Nearly a month later, on 7 June 2019, Kasera approached Customs authorities inquiring about the seized consignment, claiming that he had placed an order for 20-22 tons of black pepper through a Delhi-based broker named Ashish. He admitted no payment had yet been made and that he had no details about the broker beyond the name.

The Adjudicating Authority, after considering the evidence, held that the goods were of smuggled origin and ordered absolute confiscation of the consignment under Section 111(b) and (d) of the Customs Act, 1962.

A penalty of ₹10,00,000 was imposed on Kasera under Section 112 of the Act for his role in attempting to acquire smuggled goods. Dissatisfied with this order, Kasera filed an appeal before the Tribunal.

Represented by Ashish Batra, the appellant argued that the entire case was based on conjectures and that appellant had no knowledge of the smuggled nature of the consignment. It was emphasized that the appellant had not made any payment, had no direct link with CMC Logistics, and was himself a victim of circumstances created by the unknown broker “Ashish.”

It was therefore contended that there was no mens rea and that the penalty under Section 112 of the Customs Act, 1962, was unwarranted or at least excessive.

Represented by, Faiz Ahmed, the Department argued that the seized black pepper was indisputably of foreign origin and had entered India illegally, in violation of Section 46 and Section 7(c) of the Customs Act, 1962.

It was contended since no valid documents were produced by any person, confiscation under Section 111(b) and (d) was fully justified. It was further submitted that the appellant’s reference to a broker named Ashish was a fabricated defense to avoid liability, as no such person was traceable.

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The Bench comprising of R. Muralidhar, Judicial Member and Rajeev Tandon, Technical Member, held that the smuggled nature of the black pepper was conclusively established. The bench observed that the appellant’s claim of dealing with an untraceable broker was a “clever ploy” and demonstrated mens rea, especially since he voluntarily approached Customs about the seized consignment without being formally informed of it.

It was noted his conduct confirmed his interest in the goods and his knowledge of their source. However, considering the overall circumstances, including lack of direct documentary evidence linking the appellant to the actual smuggling, the Tribunal modified the penalty.

While upholding the absolute confiscation of the consignment, it reduced the penalty from ₹10,00,000 to ₹1,00,000.

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