2004 (12) TMI 554 - AT - Customs

Summary

Issues Involved:
1. Confiscation of computer parts under Section 111(d) of the Customs Act.
2. Redemption fine and duty demand under Section 28 of the Customs Act.
3. Penalty imposition on individuals.
4. Burden of proof regarding the smuggled nature of non-notified goods.

Detailed Analysis:

Confiscation of Computer Parts:
The Commissioner of Customs, Bangalore, ordered the confiscation of computer parts valued at Rs. 1,75,000/- under Section 111(d) of the Customs Act. The appellants contended that they purchased these goods from the open market in Delhi and that the goods were not notified items, thus their confiscation was not valid. The tribunal noted that the burden to prove that the goods were smuggled lies with the Revenue, especially when the goods are not notified under Section 123 of the Customs Act. The tribunal cited several judgments supporting the view that merely having foreign markings does not automatically render goods as smuggled. Consequently, the confiscation was deemed invalid.

Redemption Fine and Duty Demand:
The Commissioner also ordered the redemption of the confiscated goods on payment of a redemption fine (RF) of Rs. 20,000/- and demanded a duty of Rs. 4,72,759/- for the computer parts allegedly smuggled and sold prior to the seizure. The tribunal found that the confirmation of duty based on the appellants' statements about previous purchases of smuggled goods was improper. The goods had to be seized, valued, and a Show Cause Notice issued before confirming demands under Section 28 of the Customs Act. Thus, the duty demand was set aside.

Penalty Imposition:
Penalties of Rs. 50,000/- on one individual and Rs. 10,000/- on another were imposed. The tribunal did not specifically address these penalties in detail but implied that penalties related to the invalid confiscation and duty demand would also be affected by the overall decision.

Burden of Proof:
The tribunal emphasized that the burden of proof regarding the smuggled nature of non-notified goods lies with the department. The tribunal cited multiple judgments affirming that the department must provide affirmative and tangible evidence to prove that goods are smuggled. In this case, the Revenue failed to provide such evidence, and the statements from the appellants about purchasing the goods from the open market were not contradicted. Therefore, the confiscation and penalties were not sustainable.

Conclusion:
The tribunal allowed the appeals, setting aside the confiscation, duty demand, and penalties imposed by the Commissioner of Customs, Bangalore. The tribunal reinforced the principle that the burden of proof lies with the Revenue to establish the smuggled nature of non-notified goods and that mere foreign markings do not suffice to prove smuggling.