SHRI MOHAN LAL GUPTA Vs. CC NEW DELHI

JUDGEMENT

(1.) THIS appeal has been filed by Shri Mohan Lal Gupta against the Order -in -Original No. 35/99 dt. 6.12.99 under which the Commissioner of Customs has absolutely confiscated 1.48.,750 pieces of LCD watch modules, 13,367 calculators, 3000 pieces of metallic base plates of watches and 3000 pieces of watch hair spring, seized from his residential premises and his business premises on 9 -8 -1997 as he had failed to produce any records of documents regarding import of these goods at the time of seizure.

(2.) SHRI L.P. Asthana, Id. Advocate, submitted that as the impugned goods were not seized under the reasonable belief that they were smuggled goods, the provisions of Section 123 of the Customs Act are not attracted; that in his statements recorded before the seizure of the goods, the Appellant has deposed that he had purchased LCD Modlues and Calculators from M/s Mahalaxmi International, 22 Godam, Jaipur and Sardar Mannohar Singh r/o Patel Nagar, Delhi; that the bills/voucher were with the accountant, Shri Bilal and he would produce them on 11 -8 -97; that further before the seizure of the goods the officers of Directorate of Revenue Intelligence, had got conducted the enquirers at Jaipur and statement of Shri Mukesh Moolrajani, Proprietor of M/s Mahalaxmi International (Export), Jaipur, was recorded in which he in teraila, deposed that they were importing Electronic Watch Parts and Calculator Parts, which were used in their factory for manufacturing Digital Watches; Quartz Watches, Mechanical Watches and Calculators and he sold most of the manufactured goods to the Appellant for which he received payment in cash. He, further, mentioned that said Vasudev Moolrajani also produced a chart about the bills issued to the Appellants which covered most of the goods seized from the Appellants premises; that the enquiry conducted by the Customs authorities has itself showed that the goods were not of Foreign Origin on which excise duty had been paid and as such the reasonable belief mentioned in Section 123 of the Customs Act could not be entertained; that the findings of the Commissioner that the Appellant f ailed to produce any books of account is not correct as he had produced all the bills within a period of two days and this delay was because the documents and books of accounts were with his Accountant who was not available at the material time; that suspicion cannot be equated with the reasonable belief mentioned in Section 123; that the Appellate authority is entitled to look into the circumstances for examining whether the officers had the reasonable belief before effecting seizure; that it was held by the Delhi High Court in the case of Shanti Lal Mehta Vs. U.O.I. 1983 (14) ELT 1715 (Delhi) that the preliminary requirements of Section 110 of the Customs Act is that the Officer sezing the goods should have reasonable belief that the goods seized were smuggled goods. the reasonable belief refers to the point of time when the goods in question are seized and not to the stage subsequent to the act of seizure; that if the goods were not seized under reasonable belief, Section 123 cannot be invoked and if the Section is wrongly applied the entire enquiry and the order passed would be vitiated. The id. Advocate also referred to the observation of the High Court "The words reasonable belief used in Section 110 are intended to check the exercise of powers given to the Customs Officers arbitrarily and without any foundation at all, to the narrasement to General Public." It also mentioned that the burden of proof proving existence of reasonable belief is on the department; that there should be some detinet material to constitute the reasonable belied by the Officers; that mere non accountal of goods does not necessarily mean that the goods were smuggled goods; that in the present matter the officers did not have any definite information and mere fact of non -acountal of goods and some carton bearing Foreign Marked are not sufficient to entertain reasonable belief particularly in view of the decision of Delhi High Court in Shanti Lal Mehta case.

(3.) THE ld Councel, further, submitted that though the import of watches is restricted, the watch movements are freely importable; that the import of calculators is permissible against special import licence which can be purchased in open market; that Shri Nemi Chand Sharma, Manager of M/s Srinath Travel Agency, Jaipur which has transported the goods from Jaipur to Delhi, mentioned, in his statement dated 11 -8 -97, that the goods of Mahalaxmi International were being despatched to Delhi regularly and that during the period April 1997 to August 1997 he had transported calculators and parts of watches from Jaipur to Delhi under 14 luggage receipts; that further Shri Surrender Kumar, Manager of the travel agency at Delhi in his statements dt. 12 -8 -97 gave details of 14 consignments which were sent from Jaipur Office and out of which 13 consignments were delivered to the Appellants; that Shri Manohar Singh had also, in his statements dt. 12 -8 -97 mentioned about import of a consignments of modules and calculators in CKD condition in February 1997 and sale of the goods to the Appellant; that Manohar Singh had also confirmed that the Electronic Calculators seized on 9 -8 -97; that the letter to that effect was sent by Manohar Singh on 12 -8 -97 stating that the Electronic Calculators were imported by his firm and were cleared from the Customs by paying the Customs duty; that the Appellant in his statement dt. 23 -10 -97, mentioned that 40,000 LCD modules were received from M/s Mahalaxmi International Jaipur. The id. Advocate contended that the Commissioner has brushed aside all this evidence by merely observing that these are after thoughts; that the Commissioner has not given any findings on the submissions made by the Appellant about the impugned goods without checking the import policy. He finally, mentioned, that out of 45 packages, Electronic Calculators in 10 Packages were found in hessian cloth on which it was clearly written "From Mahalaxmi, Jaipur to Mohan Lal Gupta." that on the remaining packages foreign Marks were found as supplier had reused the cartons in which they had imported the goods earlier.