2005 (5) TMI 459 - Commissioner - Customs

Summary

Issues:
1. Confiscation of a motor cycle by customs authorities.
2. Allegations of illegal import of motor cycle parts.
3. Burden of proof on the department regarding illegal import.
4. Legal import of engine and chassis parts for motor cycle assembly.

Confiscation of Motor Cycle:
The case involved the confiscation of a motor cycle by customs authorities based on specific information. The motor cycle was seized and later cleared on payment of redemption fine, with a penalty imposed on the appellant. The appellant challenged the order through an appeal.

Allegations of Illegal Import:
The appellant argued that the motor cycle was assembled from imported parts legally cleared through a bill of entry. The appellant contended that the chassis and engine were imported and cleared at the Air Cargo Complex, and the identification marks were not required for classification and valuation. The appellant maintained that the customs' failure to verify the marks at the time of physical examination was not a sufficient reason for confiscation and penalty.

Burden of Proof on the Department:
The appellant emphasized that the burden to establish illegal import of motor cycle parts, especially non-notified goods, rested on the department. The department failed to provide evidence of illegal import or foreign origin of the parts, shifting the burden unfairly to the importer. Citing relevant instructions from the Board, the appellant argued that the department must prove illegal import, and failure to do so cannot lead to confiscation.

Legal Import of Engine and Chassis Parts:
The appellant contended that the legality of importing engine and chassis parts was confirmed through the bill of entry and proper duty payment. The appellant asserted that the customs' role was limited to verifying legal import and duty payment, not the subsequent use or assembly of the imported goods. The appellant argued that the motor cycle assembly was legal, and the confiscation order was unjustified.

In conclusion, the appellate authority accepted the appeal, setting aside the order of confiscation and penalty. The judgment highlighted the importance of the department bearing the burden of proof in cases of alleged illegal import, especially for non-notified goods. The legality of importing engine and chassis parts for motor cycle assembly was upheld, emphasizing the customs' role in verifying legal import and duty payment rather than subsequent use or assembly of goods.