The central legal point established in the judgment is the requirement for the owner, agent, or person in charge of a conveyance to prove the absence of knowledge or connivance in smuggling activities under Section 115(2) of the Customs Act.

Prabha Sridevan, J.

The Department has filed this appeal raising a question of law, which is wordy and long, but not clear. Therefore, the learned Senior Central Government Standing Counsel, Mr.Gurulingam submitted that he may be permitted to raise the following question of law for consideration and accordingly, he framed this question of law.

"Whether the mere fact that the Master of the Vessel or the owner of the Vessel was not shown to have been privy to the smuggling of contraband goods would be sufficient to exclude the operation of Section 115(2) of the Customs Act ?"

2. The facts are as follows:-

M.V. Tiger Bridge (hereinafter referred to as the Vessel) was ordered to be confiscated under Section 115(2) of the Customs Act, 1962 (in short the Act). M/s.Fargo Marine Co. Ltd. were the owners of the Vessel at the relevant point of time and Capt. Georgios Perivolaris was the Master of the Vessel. M/s.James Mackintosh and Company Pvt. Ltd. were the Indian agents of the owners. On 16. 2001 at about 4.00 p.m., the police personnel in-charge of B-1 North Police Station, Chennai, intercepted a Mahindra Jeep with Registration No.TN-02-C-4979 opposite to the R.B.I. Subway and recovered 900 numbers of contraband gold bearing foreign markings and weighing 104.85 kgs. valued at Rs.4,35,84,048 (i.v.) and Rs.4,66,89,705 (m.v.) from nine cloth belts kept concealed in the jeep. Thereafter, one Sadasivan, occupant of the jeep was arrested along with one Ganesan, driver of the said jeep. Enquiry disclosed three more accomplices, namely, Rajan Paul @ K.Rajan, Abdul Nabi and Saleem and they were also arrested. The contraband gold was seized on the reasonable belief that they were smuggled into the country without proper permit or licence. Further enquiry disclosed the involvement of one Kishore, second officer of the Vessel. The Vessel was berthed at the Chennai harbour and therefore, the second officer was also apprehended by the police and all the six persons were produced before the Additional Chief Metropolitan Magistrate, Economic Offences Court-I, Egmore, Chennai. On interrogation, they found that two more crew members were involved in the smuggling, namely, RJ.Patel and H.L.Khalasi. Statements were obtained from them and they admitted, they were involved in the smuggling of contraband gold and they also implicated the aforementioned Kishore, second officer of the Vessel. The statement given by the aforesaid Sadasivan revealed the modus operandi. The accused persons were taken on board the said Vessel and the three crew members showed the place where the nine cloth belts were actually concealed. According to the statements given, one Jeo would send gold biscuits from Singapore to Chennai through persons working in the Vessel and he would contact them over cell phone. Details regarding the manner in which consideration received in the smuggling activity was spent was also disclosed. The aforesaid Kishore, in his statement also revealed the manner in which the contraband goods was given to him and he too mentioned the involvement of the aforementioned Patel and Khalasi, who were the Able Seaman and Bosun respectively. RJ.Patel and Khalasi in their respective statements implicated the other two. A statement was also recorded from the captain of the Vessel. A show cause notice was issued on 12. 2001 and a copy of the order of adjudication was also issued to them. By the adjudication order, the Commissioner confiscated the Vessel with an option to redeem the same on payment of fine and imposed personal penalties under Section 112 (a) & (b) of the Act. No penalty was imposed on the captain of the Vessel. It is against the order of confiscation that the owners of the Vessel went before the CESTAT.

3. The Two members of the Tribunal differed with each other regarding the findings with regard to Section 115(2) of the Act and thereafter, the matter went before the third Member. The third Member came to the conclusion that there is no ev