1. This appeal is directed against Order-in-Appeal dated 30.9.2004 which upholds the Order-in-Original upholding the confiscation and imposition of penalty.
2. The relevant facts that arise for consideration are that officers of Customs (Preventive), Varanasi on 28.12.1994 intercepted and recovered eight wooden boxes from truck bearing Registration No. UP-78B-5470 which were concealed below the gunny bags of rice husk. The wooden boxes were found to contain ball bearings of foreign origin of different sizes. The truck and all the goods found, were seized. Based on the documents found in the truck the officers found out that the appellant herein is the owner of the truck and visited his residence but nothing incriminating was found. The appellant herein, gave a statement that he had asked the driver to transport a consignment of guavas, and that he does not have the address of the driver. The appellant also further stated that the driver was appointed by him recently that also on the recommendation of Shri Kripal Singh of Man Transport Ltd., Kanpur. In his statement Mr. Kripal Singh stated that he knew the driver very well but he does not have address. A show cause notice was issued for confiscation of the seized goods and vehicle and for imposition of penalty. The adjudicating authority, absolutely confiscated the foreign origin ball bearings and confiscated the truck with an option to redeem the same on payment of redemption fine of Rs. 50,000/- and also imposed penalty of Rs. 40,000/- on the appellant. The appellant preferred an appeal to the Commissioner (Appeals), but could not get any relief on merits, and hence this appeal.
3. The learned Advocate appearing for the appellant submits, that, he had given the truck on hire for transporting of goods and to earn a livelihood. He was not aware that the truck was transporting smuggled goods. It was also submitted that the appellant having not able to locate the whereabouts of his truck, lodged a FIR on 26.12.94 with Daveri Police Station, Kanpur about the missing truck. It was also submitted that the imposition of penalty and confiscation of the truck in this case does not arise as it is not proved that owner not involved or was aware of the smuggled nature of the goods recovered form the truck. Reliance was placed on the case law of Naveed Ahmed Khan v. C.C.Bangalore as reported at and in Final Order dated A/489-490/03-NB dated 01.05.03 in the case of Balvinder Singh and another, for the proposition that confiscation and penalty on the owner of the truck is wrong, if he is unaware of the nature of goods being carried and if the goods are non-notified goods.
4. The learned D.R. submits that, the appellant an owner of the truck cannot state that he is not aware of the address of the driver employed by him. It was submitted that the person on whose recommendation the appellant appointed the driver was also not able to give the address of the driver. This viewed from the total angle of the foreign make bearing being carried without any documents and concealed under the rice husk, would definitely point a finger towards the involvement of the appellant in this case.
5.1 Considered the submissions made by both sides and perused the records. I find that the confiscated truck was parked unattended at the time of search by the officers of the Customs. The search yielded bearings with foreign markings on them. The driver of the truck was not traceable, itself shows that the bearings with foreign markings might have been transported by him. This is also fortified from the fact that nobody came forward to claim the ownership of the bearings with foreign markings. The fact that these bearings were with foreign markings is not disputed. The appellant's contention that the bearings are non-notified goods, and hence the burden to prove that they are smuggled shifted to the department will not hold water since no one came forward claiming ownership and no documents were recovered from the truck about the legal possession of these bearings. In the absence of any evidence to indicate that the bearings with foreign marking were in legitimate possession, it has to be conceived that the goods were being transported after illegal possession. The only person who could have thrown any light on the presence of confiscated bearing was the driver, who is not traceable.
5.2 Section 115(2) of Customs Act, 1962, which deals with confiscation of the conveyance reads as under: (2) Any conveyance or animal used as a means of transport in the smuggling of any goods or in the carriage of any smuggled goods shall be liable to confiscation, unless the owner of the conveyance or animal proves that it was so used without the knowledge or connivance of the owner himself, his agent, if any, and the person in charge of the conveyance or animal.
Provided that where any such conveyance is used for the carriage of goods or passengers for hire, the owner of any conveyance shall be given an option to pay in lieu of the confiscation of the conveyance a fine not exceeding the market price of the goods which are sought to be smuggled or the smuggled goods, as the case may be.
From the plain reading of the above Section it can be seen that the owner or his agent has to prove that they had no knowledge of the contents of the boxes. In this case, though the owner of the truck (the appellant) may not be aware about the presence of bearings with foreign marking in the truck, but the driver may be aware. Since the conveyance i.e. the truck was in the hands of the driver who was in charge of the truck when the goods were seized by authorities from the truck, person in charge of the conveyance would be the agent of the owner. Since there is no evidence on record to show that the driver of the truck did not have knowledge of the presence of the bearings having foreign markings, the confiscation of the truck under Section 115(2) of the Customs Act, 1962, is correct.
6. As regards the penalty on the appellant under Section 112(b) of the Customs Act, 1962, the appellant has purchased the truck to earn livelihood, by transporting the goods for a charge. He appointed a driver on the recommendation of his friend. There is evidence on record to show that the appellant had no knowledge of the illicit goods being transported in the truck. This fact is also fortified from the fact that the appellant has lodged FIR on 26.12.94, that his truck was missing and the Customs officers searched and seized the goods from the truck on 28.12.94. If the appellant had knowledge of presence of illicit goods in his truck, he would not have lodged a complaint of his truck being missing on 26.12.94 i.e. 2 days before the truck being search by Customs authorities. To my mind the penalty imposed on the appellant is not correct, as he could not have had any knowledge of the illicit goods being transported in truck.
7. In view of the above findings, the confiscation of the truck under Section 115(2) of the Customs Act is upheld and penalty on the appellant under Section 112(b) of Customs Act is set aside. The appeal is allowed partly in the above terms.