2017 (3) TMI 587 - AT - Customs

Smuggled goods - Indian kabar - appellant s claim that it is nowhere established that the goods in respect of which the said SCN was issued were of foreign origin or were smuggled - Held that - the investigation could not lay its hand on any document which could establish that the said scrap was of foreign origin or the said scrap had entered into India without payment of Customs duty - the said goods were not covered by Section 123 of the CA, 1962 where the burden of proof that the goods under question are not smuggled is on the person, dealing with such goods - the goods dealt with in the SCN were of Indian origin. Therefore, the SCN dated 23.01.2002 was not sustainable - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Listing of Appeal No. 661/2004-NB/SM for appellant Mohd. Ujair Vs. Commissioner of Customs, Lucknow
2. Provisional release of seized goods during the pendency of Appeal No. C/661/2004

Analysis:
1. The Hon'ble High Court of Allahabad Lucknow Bench set aside the Final Order passed by the Tribunal and directed a fresh decision based on evidence and observations made in the judgment. The Court highlighted the failure to consider important statements under Section 108 of the Customs Act, indicating discrepancies in bills and the need to reevaluate the case.

2. The record of the show cause notice revealed statements from Mohd. Ujjair and Mohd. Farid regarding the transportation of copper scrap. Mohd. Ujjair's statement detailed the loading of scrap and bills issued, while Mohd. Farid, the truck owner, denied knowledge of any smuggling activities. Additionally, Shri Kishore Kumar from M/s. K.K. Exports clarified the origin of the scrap sold to Mohd. Ujjair, stating it was of Indian origin.

3. The appellant's counsel argued that the origin and nature of the goods were not proven to be foreign or smuggled. The Department's representative supported the Order-in-Original, leading to a detailed examination of the statements and evidence presented in the show cause notice.

4. The Tribunal carefully reviewed the records and submissions, noting conflicting statements regarding the origin of the goods. While one set of statements indicated Indian origin and legitimate purchase, another set raised doubts about smuggling. Given the lack of conclusive evidence of foreign origin or evasion of customs duty, the burden of proof was on the Revenue to establish smuggling, which they failed to do.

5. Following the High Court's direction and considering the statements recorded under Section 108 of the Customs Act, the Tribunal concluded that the goods in question were of Indian origin. Consequently, the show cause notice was deemed unsustainable, leading to the setting aside of the impugned Order-in-Appeal and allowing the appeal in favor of Mohd. Ujair. The miscellaneous applications were disposed of, and Mohd. Ujair was entitled to consequential relief as per the law.