1985 (2) TMI 284 - AT - Customs

Summary

Issues Involved:
1. Legality of the search and seizure.
2. Applicability of Section 123 of the Customs Act, 1962.
3. Validity of the confiscation order under Section 111(d) read with Section 123 of the Customs Act, 1962.
4. Imposition of personal penalty under Section 112 of the Customs Act, 1962.
5. Denial of principles of natural justice.

Issue-wise Detailed Analysis:

1. Legality of the search and seizure:
The appellant contended that the search conducted on 12th January 1976 was illegal and without basis. The search led to the recovery of gold sovereigns, a gold coin, a wristwatch of foreign origin, and various pieces of jewelry from the premises occupied by Shri Mahendra Kumar Dudhwala. The appellant argued that the search was based on information possibly lodged by enemies or employees and lacked a proper basis. The learned advocate emphasized that the manner of keeping the jewelry in a steel almirah was normal and did not indicate any element of concealment.

2. Applicability of Section 123 of the Customs Act, 1962:
The adjudicating authority held that Section 123 of the Customs Act, 1962 requires the person claiming the goods to furnish evidence proving their lawful importation. The appellant argued that Section 123 could not be invoked as the goods were not seized from his possession, nor was he the owner. The learned advocate contended that the seized items were old family possessions and should not be considered smuggled goods. The appellant also referred to Wealth Tax Returns and a will by Smt. Rami Devi Bagaria to support the lawful ownership of the items.

3. Validity of the confiscation order under Section 111(d) read with Section 123 of the Customs Act, 1962:
The adjudicating authority confiscated items no. 1, 2, 3, 5(a), 6(b), 6(c), 8, 11, and 12 of the search list under Section 111(d) read with Section 123 of the Customs Act, 1962, as the appellant failed to discharge the onus of proving lawful importation. The appellant argued that the goods were family possessions and had been declared in Wealth Tax Returns. The learned advocate emphasized that the burden of proof under Section 123 lies on the revenue, which was not discharged.

4. Imposition of personal penalty under Section 112 of the Customs Act, 1962:
The appellant argued that Section 112 of the Customs Act, 1962, which deals with personal penalties, was not applicable in this case. The learned advocate contended that the department did not prove that the appellant had knowledge or reason to believe that the goods were liable to confiscation. The adjudicating authority did not impose any personal penalty, and this was confirmed by the Central Board of Excise & Customs.

5. Denial of principles of natural justice:
The appellant argued that there was a denial of natural justice as the weighment of the jewelry was done by Customs authorities in the absence of the appellant. The discrepancies in the weight of the jewelry were a significant basis for the adjudicating authority's decision. The learned advocate emphasized that the appellant was not given a proper opportunity to present his case, and certain jewelry items were released despite discrepancies in their weight.

Conclusion:
The Tribunal observed that there was a denial of principles of natural justice as the weighment of the jewelry was done in the absence of the appellant. The discrepancies in the weight of the jewelry formed the basis of the adjudicating authority's decision. The Tribunal remanded the case to the Additional Collector of Customs, Calcutta, for de novo adjudication, directing reweighment of the jewelry in the presence of the appellant or his representative and allowing the appellant to produce any other evidence. The Tribunal did not delve into the merits and other legal issues due to the remand for re-adjudication.