Customs, Excise and Gold Tribunal - Calcutta
Mohinder Singh vs Collector Of Customs on 25 September, 1989
Equivalent citations: 1990ECR597(TRI.KOLKATA), 1990(48)ELT411(TRI-KOLKATA)
ORDER T.P. Nambiar, Member (J)
1. Being aggrieved by the order passed by the Ld. Collector of Customs (Appeals), Custom House, Calcutta in Order No. WB-CEX-17/84 dt. 10-7-1984 in dismissing his appeal against the order of confiscation of eleven wrist watches and 23 pcs. of watch movements, passed by the Ld. Assistant Collector of Customs, Barasat Customs Division in Order No. 41-Cus-BCD dated 2-3-1984, the appellant has presented this appeal with a prayer to set aside the orders of confiscation of the goods and also the imposition of the penalty of Rs. 300.00 on him.
2. Briefly stated the facts of the case are, that on the basis of reliable information the Customs Officers of P. & P.D., W.B., Calcutta searched the shop premises of the appellant named and styled as M/s. Gurunanak Watch Company at Shop No. 21 of Radha Bazar Street, Calcutta on the 18th day of September, 1981. The search was conducted in the presence of the Proprietor, Shri Mahindra Singh and two independent witnesses on the strength of the search order issued by the competent authority which resulted in the recovery of 11 (eleven) wrist watches and 23 (twenty-three) Pcs. of watch movements, both of foreign origin collectively valued at Rs. 6,495.00.
3. On demand by the Customs Officer Shri Singh, the Proprietor of the shop, could not produce any evidence, documentary or otherwise, in support of the licit possession/acquisition and importation of the watches and watch movements thus recovered. In a written statement tendered before the Customs Officers on the date of the search, Sri Singh inter alia expressed his inability to show any document whatsoever but stated that he would produce the same on the next day. He further added that he purchased these items from M/s. Adnan Watch Co. and Plaza Watch Co. of 14, Radha Bazar Street, Calcutta about 4 months back and although he had a register in his shop he did not record these in the said register as the watches and watch movements in question are of indigenous brand. One RICHO watch under seizure was given to him by a person for fixing a chain with it. The Customs Officer did not accept the explanation of the party as aforesaid and seized the goods under Sec. 110 of the Customs Act, 1962 on the reasonable belief that the goods are of foreign origin and were smuggled into India in contravention of Sec. 3(1) of Import/Export (Control) Act, 1947 as amended read with Section 11 of Customs Act, 1962 rendering the goods liable to confiscation under Section lll(d)(p) ibid.
4. On 19.9.81 the appellant produced xerox copy of one Cash Memo bearing No. 1722 dated 21-4-1980 of Messrs Plaza Times claiming to have purchased the watch movements seized in this case and another bill No. A-1495 dated 16-11-1979 of Adnan Watch Co. in proof of having purchased 10 watches out of the 11 (eleven) watches seized and with respect to one watch which is admittedly of Japan in origin he could not produce any documents, but gave a statement to the effect that the same was given to him by a person for fixing a chain to it, one day prior to the date of seizure.
5. Show Cause Memo was issued to Sri Mahindra Singh, Prop, of M/s. Guru Nanak Watch Co. under Registered A/D, cover on 3-3-1982 calling upon him to explain as to why the goods under seizure should not be confiscated and he should not be penalised under the provisions of Customs Act, 1962 as indicated in the show cause memo. He was also given the opportunity of personal hearing on 23-3-1982 at 1.1.00 hrs. But the aforesaid cover under which the Show Cause Memo was issued came back undelivered with the Postal remark 'Not known'. Sri Mahindra Singh was however again given an opportunity of personal hearing on 22-4-1982 at 14.00 hrs. The said communication was delivered to him on personal contact. Sri Mahindra Singh appeared for personal hearing accordingly before the then Asstt. Collector and recorded his submission wherein it was claimed by him that the goods under seizure were purchased from M/s. Adnan Watch Co. and M/s. Plaza Times and in support of such purchase he produced the original Bill No. A-1495 dated 16-11-1979 in respect of 10 pcs. of Anglo Swiss Watch and 10 pcs. of Anglo Swiss (TINY) of which items of watches at Sl.No. 2 were seized. Cash Memo No. B/1722 dated 21-4-1980 of M/s. Plaza Times was produced in support of 30 pieces ST-96 Movements (Swiss made). This item was also seized in 23 pcs. In respect of one pc. of wrist watch RICHO no covering document was produced. The same was stated to be owned by one Pradip who had given the same to him for fixing strap just an hour before Customs Officers went for search. He also produced the aforesaid Pradip to confirm his contention.
6. Thereafter, a reference was made to M/s. Adnan Watch Co., 14, Radha Bazar Lane, Calcutta and on 7-2-1983 its Proprietor, Adnan Rahumat confirmed the sale of goods in question i.e. 10 pcs. of watches. These watches are described as Item No. 1 in the seizure list as "Wrist Watches of foreign origin bearing marks Anglo Swiss Watch (TINY) - 17 jewels - Mark "Swiss" - embossed on movements inside the back dials of steel - front dials in assorted colours." In the bill produced as stated above these 10 pcs. of watches are described in Sl.No. 2 of the bill as "Indian W/W Chs/B/RS/BWP 17 JLs Assorted shape and dials MU-ST 69/71 with Brand on dial Anglo Swiss Watch (TINY)". But with respect to the document produced by the appellant covering 23 watch movements issued by M/s. Plaza Times the Department did not make any investigation.
7. Thereafter adjudication proceedings were continued and the watches and watch movements were confiscated by the Ld. Assistant Collector and a penalty of Rs. 300.00 was imposed on the appellant. The appeal filed by the appellant was dismissed by the Ld. Collector of Customs (Appeals) against which order this appeal is directed.
8. The Ld. Consultant, Sri P.K. Sengupta had submitted that the wrist watches had been purchased locally and these tiny watches were being manufactured by Anglo Swiss Watch Company in India and that these were being assembled from imported movements. Since they were made in India they are not liable for confiscation. It was his contention that the Anglo Swiss Watch Company at Switzerland stopped manufacturing of such watches long back and that there are no embossment on the dials of any of the seized watches indicating that they were made from Switzerland. It was also his contention that these facts were taken into consideration by the Ld. Collector of Customs (Appeals) in several other cases and he had produced two orders - one dated 23-10-1987 in Case No. B.C. No. S5-2160/87/CAP/87 and another dated 30-11-1985 in Case No. S53237/85/CAP/SZ. As far as watch movements are concerned it was his submission that although these were admittedly of foreign in origin their import was permissible under OGL and the appellant had purchased it locally from M/s. Plaza Time under a Memo bearing No. 1722 dated 21-4-1980 and that it is not the case of Department that this is a fake one. It was also his contention that these are not notified items under Section 123 of the Customs Act, 1962 or under Chapter-IV during the relevant period and hence, in the absence of discharging the burden cast on appellant that these are smuggled goods, the confiscation is bad in law. In so far as the single Richo Watch which admittedly is of Japan origin it was his contention that appellant received the same from one Pradip for repair who was produced before the Adjudicating Authority and there is nothing to show that the same is a smuggled one.
9. It was the contention of Sri P.C. Jain, J.D.R. that on verification from the C.E. Authorities about Anglo Swiss Co. it was reported that they have issued an L-4 Licence dated 21-12-1981 for manufacture of watches with brand name "Anglo Swiss". It was his contention that in this case the seizure was made on 18-9-1981 i.e. prior to the date of issue of licence and therefore, the tiny watches seized by the officers could not have been manufactured by the Anglo Swiss Company, Calcutta in India. It was also his contention that the orders of Collector (Appeals) cited by the Ld. Consultant were passed in the year, 1984 i.e. after the issue of the licence to Anglo Swiss Co. and that is why, the benefit was extended in those cases. Therefore, it was his contention that those cases are distinguishable. It was also contended that the burden has shifted on the appellant to prove that these are not smuggled goods which are not discharged by appellant and hence he supported the orders of the learned Collector of Customs (Appeals).
10. I have perused the records in this case and the submissions of both the sides as contained in the records. The point that arises for my determination is whether the orders of the Ld. Collector of Customs (Appeals) upholding the order of confiscation of the watches and watch movements and imposition of penalty made by the Ld. Adjudicating Authority is in accordance with law.
11. As far as the 10 pcs. of watch seized are concerned it is admitted that they are notified items, if they are foreign in origin. The appellant has produced the receipt issued by Adnan Watch Company to evidence the purchase of the same. This was also confirmed by the above-said-Company. There are no marks found on these watches to show that they are manufactured from Switzerland. If they are manufactured from Switzerland the mark 'SWISS' should have been embossed on the dial denoting their manufacture from Switzerland. But in this case these dials are engraved with the mark 'Anglo Swiss Watch Co. - Tiny'. If they were actually imported the word - Swiss - should have been found embossed on the dial which is absent in these ten watches. In the appellate order of the Ld. Collector of appeals passed on 30-5-1985 in Order No. (VI)552/84 relied on by appellant it is seen that there is an observation that if watches are made from Switzerland the country of origin will definitely be inscribed on the dial which is a general practice. It is also found that it was mentioned in the abovesaid order that Anglo Swiss Watch Company was closed down since a long time and that Tiny and Cavalry watches are sold very clearly as Indian Watches. It is no doubt true that the order does not mention the exact period when this Swiss Watch Company was closed. The Ld. J.D.R.'s contention is that it was only in 1981 Licence was granted to Anglo Swiss Watch Company to manufacture the watches and that therefore, these are not watches manufactured by them. But there is also equally no proof to show that these are watches manufactured in Switzerland and they were smuggled into India without payment of duty. A mere mention of these watches as foreign in origin in the panchnama along with the inscription 'Anglo Swiss Watch Co. - Tiny' is not sufficient to come to the conclusion that these are foreign watches. On the contrary, the appellant had produced the bill issued by Adnan Watch Company to establish that he had purchased them from the said Company. The mere fact that in his statement he stated that he purchased it four months ago whereas the bill is found dated more than 1 year prior to his statement is no ground to disbelieve his version. Even otherwise, it clearly reveals that India Watches were being manufactured out of assembled foreign parts since 1979 itself as this bill is dated 16-11-1979. In such circumstances, the burden has not shifted on to the appellant to prove that they are not smuggled goods and the burden of proving the smuggled nature of goods is on the Department. No evidence of import through unauthorised routes is produced and hence on this account, the confiscation and imposition of penalty is liable to be set aside.
12. As far as the 23 pcs. of watch movements are concerned it is clear that during the relevant period these were not notified items. Hence the burden is not on the appellant to prove the negative. The Department has not been able to produce any evidence to show that the goods, in fact, are smuggled into India or that the appellant has purchased them knowing them to be smuggled. In fact, the appellant had produced the bill bearing No. 1722 dated 21-4-80 of M/s. Plaza Times claiming to have purchased these watch movements and no investigation in this behalf was conducted by the Department. It is not in dispute that during the relevant time the watch movements is not notified goods under provisions of Section 123 of the Customs Act, 1962, nor is import of watch movements prohibited under Chapter-IV of the Customs Act, 1962 on the face of the contention by appellant that these goods could be imported under OGL, it was for the Department to prove that the goods in question are imported in contravention of the provisions of the Act, and no evidence is produced in this behalf. A mere possession of a foreign article is not sufficient presumption that the imported articles were smuggled when such a presumption is not available under Section 123 of the Customs Act, 1962. When the goods are not notified either under Section 123 of the Customs Act, 1962 or Chapter-IVA of the Customs Act, 1962, the burden to prove the smuggled nature of the goods is on the Department and that burden not having discharged in this case the confiscation of the watch movements of 23 pcs. and imposition of penalty on that account is liable to be set aside.
13. As far as the Richo Watch is concerned there is no dispute that this is a watch of Japanese origin. This is admitted by the appellant. On the very day of seizure the appellant gave a statement that one person has given him this watch for its repair. The date of statement was on 18-9-1981. The appellant also produced that person by name - Pradip - on the date of personal hearing on 22-4-1982. The mere fact that Pradip had not claimed it prior to that date is no reason to disbelieve this statement of appellant as had been done by the authorities below. The mere fact that the watch is of foreign in origin is not sufficient to hold that the same is smuggled. The appellant has discharged the burden cast on him in view of his earliest statement that the same was given to him by a person for repair and by producing that person by name Pradip, on 22-4-1982 at the time of personal hearing. The benefit of doubt is accordingly extended to the appellant. Hence I allow this appeal with consequential reliefs to the appellant.