2017 (1) TMI 749 - AT - Customs

Issue of SCN beyond 5 years - Confiscation - redemption fine - penalty - import of Harley Davidson motor bike - natural justice - Held that - the Department has not conducted the investigation properly by not taking the investigation to its logical end. The Department has merely recovered the possession of the bike from the appellant on the allegation that it is smuggled goods. Whereas the fact of the matter is that motor bike is a non-notified goods and burden to prove that it is smuggled goods is on the Department which in this case the Department has failed to establish. Further the Department has not issued the show-cause notice to the registered owner of the vehicle from whom the appellant has purchased the same by paying a consideration and without having any knowledge of the defective title of the seller. Extended period of limitation - Held that - the Department can only issue show-cause notice within a period of 5 years and which means the show-cause notice should have been issued on or before 01.06.2013 whereas in the present case the show-cause notice was issued on 30.10.2013 which is beyond the period of limitation. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Allegation of illegal import of motorbike.
2. Confiscation of the motorbike under Customs Act.
3. Appeal against the Commissioner's order.
4. Burden of proof on the Department.
5. Statutory period for issuing show-cause notice.
6. Non-notified goods and liability.
7. Proper investigation by the Department.
8. Non-issuance of show-cause notice to the registered owner.
9. Imposition of penalty on the appellant.

Analysis:
1. The case involved an appeal against an order upholding the confiscation of a motorbike due to alleged illegal import. The appellant, a resident of Kerala, purchased the motorbike in question after verifying documents and registration details. The Customs Department seized the bike, alleging illegality in import, and issued a show-cause notice. The original authority ordered confiscation with an option to redeem on payment of fine and duty. The Commissioner rejected the appeal, leading to the present appeal.

2. The appellant argued that the impugned order failed to consider relevant judgments and the statutory period for issuing a show-cause notice had lapsed. The burden of proof regarding illegal importation of non-notified goods was on the Department. The appellant cited various authorities in support of their arguments.

3. The Department's investigation revealed discrepancies in the import details of the motorbike. However, the Department did not conduct a thorough investigation or issue a show-cause notice to the registered owner from whom the appellant purchased the bike. The Tribunal found that the Department failed to establish the bike as smuggled goods and had not followed proper procedures.

4. The Tribunal concluded that the impugned order was unsustainable in law. The Department's failure to conduct a proper investigation, issue a show-cause notice to the registered owner, and adhere to the statutory period for issuing notices rendered the order invalid. Consequently, the Tribunal set aside the order with consequential relief, ruling in favor of the appellant.