CESTAT Comes Down Heavily on Customs Investigation and Adjudication - Hints reference to Vigilance
CHENNAI: Synthetic diamonds, popularly known as American diamonds, worth Rs.1.26 crore, sent as part of an unaccompanied baggage from Malaysia, were seized by officials of the Docks Intelligence Unit, Customs (Sea Port) here on Saturday.
The diamonds were found by the officials when they checked the carton boxes in a container at the Chennai port. The container was despatched from Port Klang, Malaysia, said C.Rajan, Commissioner of Customs (Sea Port).
That is from a report in the HINDU dated 1.7.2008.
What happened to the case?
Goods were smuggled in large quantities along with baggage. The Customs Commissioner adjudicated the case confiscating the offending goods, but there was no penalty on any person.
Revenue appealed to the Tribunal pleading that penalty should be imposed on:
1. Carvel Shipping Services Pvt. Ltd - there was not even a notice against them.
2. Thameen Ansari, CHA
3. Thameem Shipping Services
4. Fast Forward CHA
5. Smt. R. Louis Premalatha representative of Fast Forward CHA
While there was no notice at all against Carvel Shipping, nothing was found against the others to impose penalty.
But then who smuggled the diamonds? That is what the Customs could not find out.
The Tribunal noted:
- It is certainly a truth that there was a smuggling racket operated to bring cubic zirconium into India.
- It is also shocking to note that there was a total failure of investigation to conduct proper investigation in India and overseas.
- Spirit and intent of section 11 of the Customs Act, 1962 was buried causing prejudice to the interest of customs without bringing the members of smuggling racket to the fold of law.
- When the investigating authority as well as adjudicating authority failed in their duty to bring necessary parties to the fold of law, it is not possible at appellate stage to implead them and press them to undergo trial.
- M/s. Caravel Shipping Services Pte. Ltd. was neither issued show cause notice nor was adjudicated. There appears lapse on the part of adjudicating authority to keep this concern out of purview of adjudication.
- No efforts were made by investigation to identify the members of the smuggling racket.
- It is painful to note that the manner in which investigation was made and show cause notice was issued that granted bonus to the smuggling racket.
- Customs area being a sensitive place it is not expected from customs officers to act to the detriment of Revenue as well as the nation.
- Investigation was conducted very casually to keep the racket away from scrutiny of law.
- Authority failed to conduct overseas enquiry against the racket and no thorough investigation was made into the affairs of CHA, freight forwarder as well as the consignee and there was only pretence to justice by investigation following an empty formality to pass a superfluous adjudication order.
- No doubt there was confiscation. But that is merely a consolation to this country when the racket and mastermind behind that remained in mystery and unidentified.
- Facts and circumstances of the cases suggest that there was premeditated design to cause subterfuge to Revenue.
- It is high time to arrest smuggling, without encouraging that to perpetuate.
- Therefore, it is left to the Department to take up this matter with Directorate General of Vigilance to do the needful as he may consider appropriate.
Please see Commissioner of Customs Vs Smt Louis Premalatha -