2007 (6) TMI 482 - AT - Central Excise

Summary

Issues:
1. Confiscation of goods and imposition of penalty for illegal procurement.
2. Onus of proving goods are not smuggled under Section 123 of the Customs Act.
3. Applicability of previous Tribunal decisions on similar cases.

Analysis:

1. The case involved the confiscation of goods and imposition of penalties due to the illegal procurement of fabric of Korean origin by the appellant firm, a 100% EOU, without following due procedure. The goods were intercepted leaving the factory and found to be of imported origin without proper documentation. The Dy. Commissioner ordered the confiscation of goods, with an option for redemption on payment of a fine, and imposed penalties on the firm and the appellant's director.

2. The Commissioner (Appeals) upheld the confiscation, stating that man-made fabrics were notified under Section 123 of the Customs Act, shifting the burden of proving legality to the appellant. The appellant failed to provide evidence of legal import and purchase, leading to the affirmation of the confiscation and penalties. The appellate authority correctly applied the law, emphasizing the lack of documented proof of legitimate procurement by the appellant.

3. The appellant relied on previous Tribunal decisions in similar cases to argue against confiscation and penalties. However, the judge distinguished those cases based on the presence of purchase documents in the cited cases, unlike the current situation where no such evidence was presented. The judge reduced the redemption fine and eliminated the separate penalty on the appellant's director, considering the circumstances and lack of evidence of personal involvement in smuggling.

In conclusion, the appellate tribunal upheld the confiscation of goods and imposition of penalties due to the appellant's failure to prove legal procurement, as required under Section 123 of the Customs Act. The judge differentiated previous Tribunal decisions based on the presence of purchase documents and adjusted the fines accordingly, ultimately disposing of both appeals in a balanced manner.