ANNAYAPPA Vs. COMMISSIONER OF CUSTOMS, BANGALORE

JUDGEMENT

(1.) BOTH these appeals arise from common OIO No. 30/2001 -Cus., dated 30 -10 -2001 passed by the Commissioner of Customs, Bangalore ordering for confiscation of Computer parts seized and valued at Rs. 1,75,000/ - under Section 111(d) of the Customs Act. However, the same has been ordered to be redeemed on payment of RF of Rs. 20,000/ - and there is a demand of duty of Rs. 4,72,759/ - in respect of Computer parts which are supposed to have been smuggled by the appellants and sold in the market prior to the seizure under the provisions of Section 28 of the Customs Act. The duty deposited of Rs. 2,50,000/ - has been appropriated. There is a penalty of Rs. 50,000/ - on Shri Sanjay Patel and Rs. 10,000/ - on Shri Annayappa. The other parties on whom penalties have been imposed, their appeals have not been listed for hearing.

(2.) THE appellants have contended that they have purchased these goods from open market in New Rajpatra Market in Delhi. They pointed out that the department has asked the DRI to verify this point and the DRI have not answered to them. Therefore, their plea that it was purchased from New Rajpatra Market in Buntys brothers shop should be accepted. It is also pointed out that the items are not notified items and its confiscation is not valid, as they have been purchased from the open market. Their further plea is that merely because the goods have foreign marking that by itself cannot be held that they are smuggled ones especially when they have been purchased from the open market. They submitted that the burden to prove that they are of smuggled nature has not been discharged by the Revenue when the goods are not notified under Section 123 of the Customs Act.

(3.) THE learned DR pointed out that the goods are smuggled ones and as they are smuggled ones, its confiscation is valid as held by the Madras High Court in the case of A. Shaud Ali v. ACC, Madurai - 2001 (133) E.L.T. 554 (Mad.). We have carefully considered the submissions and the following judgments cited by the Counsel in the matter. Shantilal Mehta v. Union of India - 1983 (14) E.L.T. 1715 (S.C.) The goods must be smuggled goods. The word smuggled means that the goods were of foreign origin and they have been imported from abroad. Only then does the presumption under Section 123 arise. The goods themselves did not suggest that the petitioner was an old smuggler or a dealer of a smuggled goods. If there was such information with the customs, they ought to have disclosed it. The goods themselves did not suggest any illicit importation. Nor was there any inscription on the goods which could be the basis of the reasonable belief that the goods were of foreign origin. There was nothing in the appearance of the goods to suggest that they had been newly manufactured and brought into this country very recently from another country. In a word there was nothing absolutely from which inferences about their origin or recent import could arise. As a result Section 123 did not apply to the case. There was no reasonable belief. No presumption could be raised under Section 123. There was no obligation on the petitioner to prove that the goods were not smuggled, the burden of proof was wrongly cast on him. The entire enquiry was vitiated. Meghrajbhai G. Dodwani - 1998 (103) E.L.T. 195 In the present case the goods have been seized from the possession of a trader, who has purchased the goods from the open market as the goods are freely importable on a licence and can be transferred easily, so therefore, at this point trader cannot be asked to produce the duty paying documents for the goods. This is strictly applicable only when the goods are notified goods. Therefore, I find that the confiscation of the goods in question is illegal, since the adjudicating authority has not adduced any other evidence and only on the confessional statement, the case has been made. It has been consistent ruling of the courts of law that department cannot shift the burden to prove the smuggled nature of the goods on the appellant when the goods are not notified and the department has to adduce its own evidences to prove that the goods have been smuggled by the appellant. It has also been held that merely on the statement of the accused, the case for smuggling cannot be made out and goods confiscate, unless the department has also adduced evidence to prove that the goods were smuggled by the appellant.