2007 (6) TMI 79 - AT - Customs

Confiscation of goods - Department contended that impugned goods imported by appellant liable for confiscation and release would entail appropriate payment of duty along with fine and penalty - Appeal is partly allowed after considering the fact

Summary

Issues:
1. Whether the impugned goods were legally imported.
2. Burden of proof regarding the origin of the goods.
3. Liability for confiscation and payment of Customs Duty.
4. Imposition of redemption fine and penalty.

Analysis:
1. The appellants claimed to have purchased the impugned goods in good faith from a supplier in Mumbai, against whom they produced a Certificate of payment. However, the named supplier denied issuing relevant invoices and confirmed manipulation of documents. The goods were found to be of foreign origin and notified under Section 123 of the Customs Act, 1962. Despite the appellants' assertion of licit importation, the denial by the supplier weakened their case in meeting the burden of proof under Section 123. The Tribunal considered the circumstances and the payment made through a nationalized bank, concluding that while the goods were liable for confiscation and Customs Duty, the appellants were not directly involved in illicit importation.

2. The denial by the named supplier regarding the sale of the goods undermined the appellants' claim of legal importation, shifting the burden of proof onto them. Despite the lack of direct involvement in illicit importation, the appellants failed to meet the requirements under Section 123. The Tribunal acknowledged the payment through a Bank Draft as a factor in determining the appellants' lack of direct involvement in the illegal importation, leading to the setting aside of the redemption fine and penalty imposed by lower authorities.

3. The Tribunal partially allowed the appeal by setting aside the redemption fine and penalty, recognizing that the appellants were not directly responsible for the illicit importation of the goods. The decision upheld the liability for confiscation and payment of appropriate Customs Duty, leaving the appellants with the option to redeem the goods upon payment of the duty. Additionally, the appellants were advised to pursue damages from the supplier through legal recourse if deemed necessary.

4. The judgment was pronounced and dictated in the open court, concluding the appellate proceedings with the decision to set aside the redemption fine and penalty while upholding the liability for Customs Duty payment and confiscation of the impugned goods.