2005 (6) TMI 395 - AT - Customs

Summary

Issues:
1. Whether the copper scrap seized by Customs authorities was smuggled.
2. Burden of proof on Revenue to establish the smuggled nature of goods.
3. Application of Section 123 of the Customs Act in determining smuggled goods.
4. Presumption drawn by the Commissioner and its validity.

Analysis:
Issue 1: The appellant argued that the copper scrap seized was not notified under Section 123 of the Customs Act, and therefore, no presumption of it being smuggled could be made. The burden of proof was on the Revenue to establish the smuggled nature of the goods. The appellant cited previous decisions to support their argument.

Issue 2: The Commissioner's order mentioned that the goods were seized based on specific information and trade opinion, leading to a belief that the goods were smuggled. However, the Commissioner drew presumptions and made assumptions without concrete evidence against the appellant regarding smuggling from a third country. The Department failed to provide evidence to support their claim, and the burden of proof remained unfulfilled.

Issue 3: Since the copper scrap was not a notified item under Section 123 of the Customs Act, no presumption of it being smuggled could be drawn. The Revenue was required to prove the smuggled nature of the goods, which they failed to do in this case. The decision emphasized that in such cases, the burden always lies on the Revenue to establish the goods' smuggled nature.

Issue 4: The Commissioner's decision to confiscate the goods and impose a penalty was based on the quantity of scrap being deemed suspicious, rather than concrete evidence of smuggling. The Tribunal found this reasoning insufficient to support the confiscation and penalty. Consequently, the impugned order was set aside, and the appeal was allowed in favor of the appellant, granting them consequential relief.