2015 (12) TMI 408 - AT - Customs

Confiscation of goods - smuggling of goods - whether mobile phones are rightly confiscated as smuggled goods and whether appellant is the rightful owner of the goods - Held that - No investigations at all were conducted by the department to check the authenticity of the documents produced by the appellant. There was also no other claimant of present seized mobile phones of foreign origin and mobile phones are not notified under Sec 123 of the Customs Act 1962 where onus shifts to the owner / importer of the goods. Appellant has never claimed to be the original importer of the mobile phones. The requirement to meet with the prohibitions imposed by the DGFT notification No. 14/2009-14 dt 14/10/2009 can be only be questioned from the importer. No investigation was done from the seller of the mobile phones in Delhi to establish that mobile phones were of smuggled nature. Once appellant has produced the purchase bills with respect to the seized goods then it cannot be said that the seized goods were of smuggled nature when no investigation was done at sellers end. In the absence of any other claimant of goods the present appellant has to be considered as the rightful owner. Appellant cannot be questioned with respect to the restrictions imposed by DGFT when the same were also not the subject matter of the show cause notice. - Decided in favour of assessee.

Summary

Issues:
1. Confiscation of mobile phones as smuggled goods.
2. Ownership of the seized goods.

Analysis:
1. The appeal was filed against the order of confiscation made by the Adjudicating Authority, which was upheld by the first appellate authority. The appellant argued that the seizure of mobile phones of foreign origin was unjustified as they were not notified goods under the Customs Act 1962. The appellant claimed ownership of the goods and provided purchase bills during adjudication. The department failed to investigate the authenticity of the documents. The appellant was not the original importer of the goods, and no other claimant came forward. The DGFT notification prohibiting import of mobile phones was not directly applicable to the appellant as the onus was on the importer. The Tribunal cited various case laws supporting the appellant's position.

2. The Revenue argued that import of mobile phones was prohibited as per a DGFT notification. The first appellate authority upheld the confiscation, stating that the appellant did not claim the goods promptly and was not the rightful owner. However, the Tribunal observed that the seizure was made hastily, and the show cause notice was issued within 10 days of seizure. The appellant claimed ownership with supporting documents, but no investigations were conducted by the department. Since no other claimant emerged, the appellant was considered the rightful owner. The Tribunal emphasized that the DGFT restrictions were not part of the show cause notice and could not be used against the appellant. Citing a previous judgment, the Tribunal ruled in favor of the appellant, allowing the appeal with consequential relief.

In conclusion, the Tribunal found that the confiscation of mobile phones as smuggled goods was not justified, and the appellant was deemed the rightful owner. The appeal was allowed, providing relief to the appellant.