2018 (12) TMI 391 - AT - Customs

Smuggling - readymade garments - notified goods or not u/s 123 of CA - certain labels which bore markings as Made in Bangladesh and Jack & Jones the goods were presumed to be smuggled goods - foreign origin goods or not? - Held that - It is not in dispute that the readymade garments are not notified goods in terms of Section 123 of the Customs Act 1962. Consequently before coming to the conclusion that the seized goods are of foreign origin the Customs Department was required to establish by means of evidence that the goods are of smuggled goods. Mere fact that the goods bore foreign markings will not be enough to conclude that the goods were smuggled. The investigation undertaken by the Revenue has failed to establish that the goods were smuggled - appeal allowed - decided in favor of appellant.

Summary

Issues:
Customs seizure of readymade garments marked as "Made in Bangladesh" and "Jack & Jones", confiscation of goods under Customs Act, 1962, redemption fine, penalty imposition, appeal against Orders-in-Appeal.

Analysis:
The case involved the Customs Department's seizure of readymade garments packed in gunny bags marked as "Made in Bangladesh" and "Jack & Jones" at Patna Railway Station on suspicion of being smuggled goods. Investigations led to a show-cause notice proposing confiscation, resulting in an Order-in-Original confiscating the goods under Customs Act, 1962, with a redemption fine and penalties imposed on the appellants. The Commissioner (Appeals) upheld the order, leading to the current appeals challenging the confiscation.

During the hearing, the appellant's advocate argued that the goods, being readymade garments not listed under Section 123 of the Customs Act, should not be presumed smuggled based solely on foreign markings. Citing case laws like B. Laxmichand and others, the advocate contended that the goods' origin as smuggled was not adequately proven by the Revenue.

On the Revenue's side, the Department justified the impugned order, relying on the Commissioner's findings regarding the goods being considered smuggled based on markings and other evidence. The Tribunal, after hearing both sides and examining the records, found that the investigation failed to establish the goods as smuggled, especially since readymade garments were not notified goods under the Customs Act.

Referring to case laws like Manish Kakrania and Uma Trading Company, the Tribunal emphasized the Revenue's burden to prove goods as smuggled, which was not adequately discharged in this case. As the seized goods' smuggled nature was not conclusively proven, the Tribunal set aside the impugned order, allowing all the appeals against the confiscation.

In conclusion, the Tribunal's decision highlighted the necessity for the Revenue to establish goods as smuggled with evidence, especially when dealing with items not listed under the Customs Act, ultimately leading to the reversal of the confiscation order in this case.