2017 (1) TMI 1535 - AT - Customs

Confiscation - penalty - smuggling - it was alleged that the appellant could not produce any documentary evidence for their legal importation and possession of these goods - Held that - it is not incumbent upon the appellant to prove that these goods seized from his possession are not smuggled goods. Therefore, the burden of proving that the seized goods are smuggled goods would lie upon the Customs authorities. No such evidence has been brought on records by Customs authorities to substantiate that the goods seized from the appellant are smuggled goods - there is no justification for confiscation of such goods u/s 111 of the CA, 1962 - also the appellant is also not liable for any penalty u/s 112. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Allegation of importing mobile batteries without proper documents
- Seizure of mobile batteries from appellant's premises
- Show cause notice issued for confiscation under Section 111 of the Customs Act
- Burden of proof on appellant regarding legal importation and possession of goods
- Interpretation of Section 123 of the Customs Act
- Lack of evidence to prove seized goods as smuggled
- Confiscation order and penalties imposed on the appellant

Analysis:
The case involved an appeal against an order passed by the Commissioner of Customs regarding the seizure of mobile batteries from the appellant's premises. The appellant, a trader, was alleged to have imported the batteries without proper documents. Customs Officers seized the batteries during an investigation and issued a show cause notice for confiscation under Section 111 of the Customs Act due to the appellant's inability to provide proof of legal possession of the goods.

During the hearing, the appellant's advocate argued that the Revenue failed to establish that the seized goods were smuggled, thus the impugned order should be set aside. The Departmental Representative reiterated the findings of the lower authority, which focused on the lack of documentary evidence for legal importation and possession of the goods by the appellant.

The Tribunal examined Section 123 of the Customs Act, which places the burden of proving that seized goods are not smuggled on the person from whom such goods are seized. However, mobile phone batteries were not notified under Section 123, relieving the appellant from proving the goods were not smuggled. Therefore, the burden of proof that the seized goods were smuggled lay with the Customs authorities. Since no evidence was presented to substantiate the goods as smuggled, the Tribunal concluded there was no justification for confiscation under Section 111 or imposition of penalties under Section 112.

As a result, the Tribunal vacated the order for confiscation and penalties imposed on the appellant, allowing the appeal in favor of the appellant. The judgment was pronounced in open court on 6-1-2017.