1983 (9) TMI 306 - AT - Central Excise

Summary

Issues Involved:
1. Legality of the confiscation of YKK zip fasteners and Indian cloth.
2. Burden of proof regarding the smuggled nature of the goods.
3. Validity of the appellant's claim of ownership and bona fide purchase.
4. Applicability of Section 123 of the Customs Act, 1962.
5. Evaluation of circumstantial evidence and legal precedents.

Detailed Analysis:

1. Legality of the Confiscation of YKK Zip Fasteners and Indian Cloth
The appeal is against the order of the Collector of Central Excise, Guntur, which confiscated YKK zip fasteners of Japanese origin and 53.5 meters of Indian cloth under Section 111(d) read with Section 119 of the Customs Act, 1962. The confiscation was based on the discovery of these goods in a godown, with the consignor being a fictitious entity and the consignee disclaiming ownership.

2. Burden of Proof Regarding the Smuggled Nature of the Goods
The appellant argued that since zips were not notified goods under the Customs Act at the relevant time, the burden was on the Department to prove that the goods were smuggled. The Department contended that the appellant's failure to establish ownership and the circumstances of the purchase indicated that the goods were smuggled.

3. Validity of the Appellant's Claim of Ownership and Bona Fide Purchase
The appellant claimed to have purchased the goods from an unknown person in Madras and argued that he was a bona fide purchaser without knowledge of the goods' smuggled nature. However, the Tribunal found this explanation artificial and noted that the appellant did not claim ownership promptly, which militated against his claim.

4. Applicability of Section 123 of the Customs Act, 1962
The Tribunal noted that the Collector did not apply Section 123, which shifts the burden of proof to the person in possession of goods. Instead, the Collector found that the appellant failed to establish ownership, making the onus of proof under Section 123 irrelevant. The Tribunal cited Supreme Court rulings to support the principle that the Department need not prove its case with mathematical precision but must establish a degree of probability that a prudent person would find convincing.

5. Evaluation of Circumstantial Evidence and Legal Precedents
The Tribunal considered several legal precedents, including Supreme Court rulings, which held that circumstantial evidence could establish that goods were smuggled. The Tribunal found that the appellant's actions, such as purchasing goods from an unknown person and using a false invoice, indicated knowledge of the goods' smuggled nature. The Tribunal concluded that the appellant failed to prove lawful acquisition and ownership of the goods.

Conclusion
The Tribunal affirmed the order of confiscation by the Collector of Central Excise, Guntur, and dismissed the appeal. The Tribunal held that the circumstantial evidence and the appellant's conduct established that the goods were smuggled, and the appellant's claim of bona fide purchase was legally unsustainable.