SOBHA LAL PANDIT Vs. COMMISSIONER OF CUSTOMS, LUCKNOW

JUDGEMENT

(1.) A truck bearing Regn. No. HR -38/C -0766 was intercepted by the Officers of DRI, Varanasi on 24.9.98 at the Trade Tax Post, Naubatpur, Varanasi.

(2.) On examination of the goods loaded on the truck, 30 bags of 'poppy seeds' of foreign origin concealed under 395 bags of 'Makhana' were found. On investigation, it was revealed that the truck was transporting 395 bags of Makhana booked by M/s. Sing & Sons, Purnea in the name of M/s. Banwari Lal Shri Ram, Delhi through U.P. Road Lines. The poppy seeds of foreign origin however remained unclaimed. Consequently, the 30 bags of poppy seeds valued at Rs. 2,25,000/ - and the 395 bags of Makhana valued at Rs. 3,35,750/ - were seized under Section 110 of the Customs Act, 1962. The truck transporting these goods valued at Rs. 15 lakhs was also seized. Accordingly, the proceedings were initiated which culminated in the Commissioner of Customs, Lucknow passing an Order dated 28.9.99 in which he ordered for absolute confiscation of poppy seeds of the foreign origin under Section 111 (d) of Customs Act, 1962 read with Section 3 of the Foreign Trade Regulation & Development Act, 1992. He ordered for the confiscation of 395 bags of Makhana under Section 119, but, however gave an option to the owner to redeem the same on payment of a fine of Rs. 1,50,000/ -. The Commissioner further ordered for the confiscation of the truck under Section 115(2) and gave an option to get the same redeemed on payment of a fine of Rs. 1 lakh. He also imposed penalties of Rs. 50,000/ - each on Shri Satyanarayan, Driver of the truck, Shri Sobha Lal Pandit, claimant of the Makhana and M/s. Sing & Sons, consignor of the Makhana. The present appeal is by Shri Sobha Lal Pandit, owner of (sic) Makhana. The only point raised by Shri B.M. Dass, Advocate for the appellant is that the contraband nature of the poppy seeds was not known to Shri Sobha Lal Pandit and therefore there is no warrant for confiscation of the same under Section 119 and imposition of penalty on him. In this, he relied on the decision of the Tribunal in the case of M/s. Mafatlal Investment v. C.C. Ahmedabad - : 1995 (75) ELT 835 (T). I have considered these submission. As already stated (sic) the smuggled nature of the poppy seeds is not in dispute and no one has turned up to claim the same. It is also not in dispute that 395 bags of Makhana were used for concealing the smuggled poppy seeds. Under the provisions of Section 119 of Customs Act, 1962 any goods used for concealing smuggled goods shall also to be liable for confiscation. In view of these clear provisions, the knowledge of the smuggled nature of the goods on part of the owner of the goods used for concealing such smuggled goods is not a condition precedent for the liability of the latter to confiscation. Though in the cited case of M/s. Mafatlal Investment, the Tribunal has taken such view and given relief to the party whose goods were used for concealing the smuggled goods but as per the above extracted provisions of Section 119, this decisions to the contrary. Therefore, the view taken in the cited case could be considered to be restricted to that case alone. In the light of these facts, therefore, no fault can be found in the order of the Commissioner for confiscation of Makhana and his direction for release of the same on payment of a fine. Since, however, admittedly, there was no knowledge on the part of the appellant that the poppy seeds which were concealed under the Makhana seeds were smuggled, there is no warrant to impose a penalty on him. I therefore set aside the penalty of Rs. 50,000/ - imposed on the appellant. But for this modification, the appeal otherwise fails and the same is accordingly rejected.