2009 (3) TMI 725 - AT - Customs

Summary

Issues Involved:
Confiscation of ladies watches as smuggled goods and currency as sale proceeds of smuggled goods.

Analysis:
1. The appeal was filed against the confiscation of 518 ladies watches and currency amounting to Rs. 1,07,955 on the grounds of being smuggled goods and sale proceeds of such goods, respectively.
2. The appellant contended that they were HMT watch dealers, regularly receiving watches from HMT. Due to a dispute with HMT, they procured some watches from the market. Customs officials seized watches and currency from the business premises, suspecting them to be smuggled. A joint inspection was conducted, showing that some watches were genuine HMT watches.
3. The Revenue argued that the watches and movements were notified goods under the Customs Act, placing the burden on the appellant to prove they were not smuggled. The appellant failed to discharge this burden, leading to the confiscation of goods. The Revenue also claimed that the currency found was from the sale of smuggled watches.
4. The Tribunal found merit in the appellant's contention, noting that the joint inspection report confirmed the watches had HMT movements. As some watches lacked genuine parts and markings, they were not liable for confiscation.
5. Regarding the currency confiscation, there was no evidence proving it was the sale proceeds of smuggled goods. Citing a previous Tribunal decision, the court highlighted the requirements for proving such a sale, which were not met in this case.
6. The court concluded that the Customs Act requirements were not fulfilled, as no sale was established, and the identity of the buyer and seller was not proven. Therefore, the confiscation of currency was deemed unsustainable, leading to the setting aside of the impugned order and allowing the appeal.