BEER AUTO STORES Vs. CC

JUDGEMENT

(1.) Appeal No. 580/2001 filed by M/s Beer Auto Store is against the order of the Commissioner of Customs confiscating 18,716 Ball Bearings valued at Rs. 30,84,100 under Section 111(d) of the Customs Act with option to redeem the goods against payment of fine of Rs. 10 lakhs and imposing on the appellants a penalty of Rs. 3 lakhs under Section 112 of the Act. The other appeal filed by Shri Taranjeet Singh is against a penalty of Rs. 3 lakhs imposed on him by the Commissioner under Section 112 of the Act.

(2.) Officers of Customs had conducted search of the shop and godown premises of M/s Beer Auto Store in the presence of two independent witnesses and Shri Taranjeet Singh who introduced himself as the Proprietor of the business. The search of the godown resulted in the recovery of 39 packages containing 18,716 Ball Bearings with foreign markings, collectively valued at Rs. 30,84,100. Shri Taranjeet Singh could not produce any documentary evidence of legal acquisition and possession of the goods. The officers seized the goods under Section 110 of the Customs Act on the basis of their belief that the goods had been smuggled into India and hence liable to confiscation under Section 111 of the Act. A statement of Shri Taranjeet Singh was recorded under Section 108 of the Act, wherein he stated that he had purchased the foreign origin ball bearings from one Shri Sanjay who came to his shop on his own and offered the goods to him; that Shri Sanjay had sold the ball bearings to him without any bill; that he did not know the whereabouts of Shri Sanjay nor any means of contacting him; that he had indulged in the activity of trading in foreign origin ball bearings to earn some fast buck as advised by his friend; that the seized ball bearings had been purchased by him against cash payment made to Shri Sanjay. The officers subsequently searched the residential premises of Shri Taranjeet Singh but could not recover any incriminating material. They also conducted scrutiny of a Statement of Accounts obtained from the bankers (Central Bank of India) of M/s Beer Auto Store, which indicated that payments were being received in cash and deposited into the account of M/s Beer Auto Store. The officers also recorded a statement of Shri Pritpal Singh, father of Shri Taranjeet Singh. Shri Pritpal Singh stated that he and his brother Shri Lakhbir Singh were partners of the firm namely, M/s Beer Auto Store; that they wanted to wind up the firm; that his son Shri Taranjeet Singh was running the shop during the search conducted by the Customs officers; that some goods had been seized from the godown of his own Shri Taranjeet Singh; that he was not aware of any such godown being owned by his son; that he had no role in the business of M/s. Beer Auto Store and had no interest in the shop for the last 5 -6 years and that he did not know anything about the foreign origin ball bearings seized from the godown of Shri Taranjeet Singh. Shri Pritpal Singh also submitted some documents mentioned in his statement. Shri Lakhbir Singh, in his statement, corroborated whatever had been stated by his brother Shri Pritpal Singh. He also produced some documents mentioned in his statement. From the results of investigation, it appeared to the Department that Shri Taranjeet Singh had acquired possession of smuggled foreign origin Ball Bearings collectively valued at Rs. 30,84,100 with the knowledge/belief that the goods were liable to confiscation under Section 111(d) of the Customs Act. Accordingly, the Department issued a show -cause notice to Shri Taranjeet Singh and M/s Beer Auto Store proposing to confiscate the goods and imposing penalties on the noticees. Upon receipt of the show -cause notice, the parties through their Counsel, cross -examined four persons, namely, (1) Shri Asha Ram, Panch witness (2) Shri Kaptan Singh, Investigating Officer (3) Shri Shyam Milan, Panch witness, and (4) Shri Rajan Mathur, Superintendent of Customs. Subsequently, a reply to the show cause notice was submitted, wherein the appellants denied the allegations of the department and claimed that the statements of Shri Taranjeet Singh had been obtained under duress and hence could not be relied upon and that the same was retracted in the first instance. The appellants also contended that as the ball bearings were not notified goods, the burden of proof of smuggled nature of the goods lay on the department but the same had not been successfully discharged. It was also pleaded that the valuation of the goods was arbitrary. After hearing Counsel for the appellants, the Commissioner passed the impugned order.

(3.) Heard both the sides. The Counsel for the appellants submitted that the ball bearings were seized by the officers of Customs from the godown of M/s Beer Auto Store; that, as the ball bearings were not notified goods under Section 123 of the Customs Act, the burden was on the department to establish that the goods had been smuggled into India by the appellants; the department did not adduce any evidence to prove the alleged smuggled nature of the goods; that some of the seized ball bearings had been purchased from the open market as evidenced by the bill issued by the sellers and the rest had been purchased through brokers against cash payment as evidenced by vouchers; the bills and vouchers produced by the appellants were not taken into account by the Commissioner; that Shri Taranjeet Singh had retracted his statements on 5.2.2000 in his letter submitted to the Commissioner of Customs; that this retraction was arbitrarily rejected by the Commissioner; that the reliance placed by the Commissioner on the retracted statement of Shri Taranjeet Singh was illegal; that the valuation of the goods done by the Commissioner was arbitrary and illegal as it was done on the basis of market enquires held behind the back of the appellants.