Customs, Excise and Gold Tribunal - Tamil Nadu
V. Muniyandi vs Commissioner Of Customs on 5 March, 2004
Equivalent citations: 2004(167)ELT215(TRI-CHENNAI)
ORDER Jeet Ram Kait, Member (T)
1. These three appeals are directed against the two Orders in Appeal Nos. 181 & 182/2003 and No. 183/2003 both dated 30-4-2004 passed by the Commissioner of Customs (Appeals), Chennai whereby the Commissioner has upheld the orders in original passed by the Original authority confiscating various electronic goods and imposing penalties under Section 112(b) of the Customs Act, 1962 on the appellants.
2. In all these appeals the facts and the law involved are identical and hence they were heard together and are disposed of by this common order.
3. Appeal Nos. C/218 and C/219 are filed by V. Muniyandi and S. Kaspur respectively challenging the order of confiscation of electronic goods valued at Rs. 8,82,800/- with option to redeem the same on payment of duty of Rs. 4,00,000/- and imposing penalty of Rs. 40,000/- on these appellants under Section 112(b) of the Customs Act, 1962.
4. Appeal No. C/313/2003 is filed by Hiralal Kirupalani against the order of confiscation of electronic goods valued at Rs. 2,48,600/- with option to redeem the same on payment of duty of Rs. 1,00,000/- besides imposition of penalty of Rs. 25,000/- on the appellant under Section 112 of the Customs Act, 1962.
5. In all these cases, electronic goods in trade quantities alleged to be of foreign origin were recovered from the appellants by the local police of Chennai and cases were registered against them under Cr. P.C. read with Sections 111 and 135 of the Customs Act, 1962 and the appellants were arrested and produced before the Hon'ble Additional Chief Metropolitan Magistrate, EO-II, Chennai and as per his direction, the goods were taken over by the Customs. The goods were later on seized by the Customs authorities in terms of the provisions of the Customs Act, 1962. Confiscation of the goods have been ordered by the Customs on the ground that these goods are of foreign origin and in trade quantities and have been illicitly imported into the country as the goods are not covered by any legal documents.
6. Shri A. Ganesh appearing for the appellants submitted that the goods involved are not notified goods under Section 123 of the Act and the goods are covered under Open General Licence. Therefore, the burden to prove that the goods were smuggled into the country lies with the department and this burden has not been discharged. He has also invited my attention to the order of the Tribunal in the case of Sadbhavana v. CC, Indore reported in 2003 (158) E.L.T. 652 wherein it is held that in case of failure to produce document regarding legal import/possession of foreign goods, the burden is on the department to prove the smuggled character of the good. It is, further held therein that at the relevant time, the goods were non-notified and were available in the open market and mere non-production of the bill by the appellant, a small concern does not lead to an inference that he had smuggled those goods.
7. Heard Shri A. Jayachandran, learned JDR who defended the orders impugned. He has also referred to the comments received from the department, a copy of which is filed in the file. It is inter alia stated therein that the statements have been recorded under Section 108 of the Customs Act and as such is valuable evidence. He has further stated that the goods are of foreign origin and are not covered by any legal and other document and that in itself is the direct evidence. On the basis of markings, voucher Nos. serial Nos., etc. and the dubious nature of transaction it is proved that the goods are of smuggled nature.
8. I have considered the submissions made by both the sides and perused case records. I find that in the present case, the goods involved are non-notified goods under Section 123 of the Customs Act and are freely importable under Open General Licence and are freely available in the market. The confiscation of the goods has been ordered on the ground that the goods are of foreign origin and are in trade quantities and that the goods are not covered by any bills for their licit import into the country. I observe that merely because the goods are in trade quantities and there are foreign markings on the goods, that by itself cannot lead to an inference that the goods have been smuggled into the country. The appellants in their initial statements have stated that they are doing business in such goods and the goods have been purchased by them for business purposes and that they are not the importers. There is nothing extra ordinary that people doing business in buying and selling of goods will have goods in trade quantities and that cannot be a reason to take an inference that the goods were smuggled into the country. In any event, in the instant case, the goods involved are not notified goods and the burden to prove that they are smuggled into the country lies with the department which burden has not been discharged. I also note that the Central Board of Excise and Customs vide Circular F.N. 04/149/65-Cus-III, dated 14-12-65 has issued guidelines in regard to town seizure. The guidelines inter alia reads as under :
(a) Except for the commodities which attract the provisions of Section 178A of SCA or Section 123 of the Customs Act, the burden to prove that the goods seizure are smuggled is on the Customs authorities.
(b) When the goods are recovered from a person who is not proved to be the importer of the goods and claims to be a purchaser of the imported goods, onus is always on the customs authorities to establish that the goods were imported contrary to any import or prohibition or restriction and they have to bring home the guilt to the person alleged to have committed a particular offence by adducing satisfactory evidence.
(c) From the above it will be seen that there are three essential Ingredients of the offence under Section 167(8) of the SCA or under Section 123 of the Customs Act and they are :
(1) that the importation of certain goods has been prohibited or restricted; (2) that the goods in question, belonging to such category, have been imported into India i.e. the goods are of foreign origin; (3) that such importation has been contrary to such prohibition or restriction.
Unless all the three ingredients are proved by the Department, the offence is not established. In other words, even if the import of a particular commodity has been prohibited for quite some time and it is also proved that the seized goods of that commodity are of foreign origin, it would not be sufficient evidence to hold that the goods seized are smuggled unless there is evidence which conclusively leads to the inference that the said goods were imported into the country to any prohibition or restriction. It has been held that the circumstances that a person makes inconsistent statement regarding the manner in which he came into the possession of the articles recovered from him, or that he did not maintain proper account to show the purchase of the articles, or that the purchase vouchers produced were found to be forged cannot necessarily lead to the conclusion that the articles were smuggled or were imported contrary to any prohibition or restriction. The evidence to justify an inference of smuggling should be one which is relevant for providing the unauthorised importation of the goods and not the unauthorised possession of the goods.
9. Further the case law cited by the learned Counsel for the appellants in the matter of Sadbhavana v. CC, Indore reported in 2003 (158) E.L.T. 652 wherein it has been held that failure to produce document regarding legal import/possession of foreign origin goods, the burden to prove the smuggled character of the goods lies on the department, squarely applies to the facts of the present case. In the instant case as noted above, the goods are non notified goods, and are freely available in the open market for any one to purchase or do business.
10. In view of above, I hold that the Revenue has failed to discharge the burden cost on it that the goods were smuggled into, the country. I therefore, hold that the impugned orders are, not legal and proper and I set aside the same and allow the appeals with consequential relief, if any.