2005 (12) TMI 110 - HC - Customs

Confiscation and Penalty - Evidence - Onus of proof - huge quantity of Silk fabrics of Chinese origin - stored at the factory-cum-Godown - Non-notified goods - HELD THAT - It is now settled law that burden in a criminal prosecution in the absence of any special protection given in any statute is always upon the prosecution. The goods in question being non-notified one the burden is upon the revenue. Onus of proof is different from the burden of proof and we should not confuse the term onus with burden . Burden of proof lies upon the person who has to prove a fact and it never shifts but the onus is shifted at every stage in the process of evaluation of evidence. In this case the respondent specifically stated that they got those articles by purchase through payment by account payee cheques. If the revenue could produce the documents of the Bank showing that those were not encashed we are prepared to accept the contention of Mr. Mukherjee that initial burden was discharged and the onus shifted upon the respondents to prove his definite defence. But the revenue having failed to discharge initial burden in this case no question of shifting of onus arises. In this case as indicated earlier if the department produced documents showing that the defence of the respondent that they paid the price of the goods by account payee cheque in favour of Nav Bharat Textile was a false plea by production of the Bank s documents the Court could reasonably come to the conclusion that the defendant had taken a definite wrong plea and as such they were guilty; but the department could not disprove such assertion. No material had been placed showing that no such cheque was encashed by Nav Bharat. Although Mr. Mukherjee tried to impress us that Nav Bharat was not in existence and/or a fictitious person we are not impressed by such contention. The respondents purchased goods in 1995 and the investigation started in the year 1997. If by that time the Nav Bharat had really removed their business for that reason the respondents could not be blamed. We Thus find that the appellate authority and the Tribunal rightly held that the burden was not discharged by the revenue in the facts and circumstances of the case and as such no substantial question of law is involved herein. We accordingly dismiss this appeal with costs which we assess at 300 G. Ms.

Summary

Issues:
Challenge to order of appellate Tribunal affirming finding of no justification for confiscation of goods and imposition of personal penalty.

Detailed Analysis:

Issue 1: Confiscation of Goods and Imposition of Personal Penalty
- The appellant challenged the order of the appellate Tribunal regarding the confiscation of goods and imposition of a personal penalty.
- The search at the premises of the respondent yielded Chinese silk fabrics, leading to the seizure of goods under the Customs Act.
- The department issued a notice to show cause for confiscation and penalty, alleging the goods were smuggled.
- The Joint Commissioner ordered confiscation and imposed a penalty on the directors of the respondent company.
- The appellate authority set aside the confiscation and penalty, stating the burden of proof lay with the revenue.
- The Tribunal affirmed the appellate authority's decision, emphasizing the revenue's failure to prove the goods were smuggled.

Issue 2: Burden of Proof
- The revenue contended that the burden of proof was misplaced by the Tribunal.
- The appellant argued that the respondents failed to prove they were bona fide purchasers, as the purported supplier was non-existent.
- The respondents maintained they purchased the goods through a legitimate supplier with account payee cheques.
- The Court held that the burden was on the revenue to prove the goods were smuggled, especially as they were non-notified items.
- The Court emphasized that the revenue failed to produce concrete evidence to disprove the respondents' claim of legitimate purchase.

Issue 3: Application of Legal Principles
- The Court rejected the revenue's argument that the burden shifted to the respondents.
- It clarified that in criminal proceedings, the burden of proof always lies with the prosecution, especially in the absence of statutory provisions.
- The Court highlighted that the revenue's failure to disprove the respondents' claim absolved them of guilt.
- Emphasizing the need for concrete evidence, the Court dismissed the appeal, upholding the decisions of the appellate authority and the Tribunal.

In conclusion, the High Court at Calcutta dismissed the appeal, affirming the decisions of the appellate Tribunal and the appellate authority. The Court held that the burden of proof rested with the revenue, which failed to provide sufficient evidence to justify the confiscation of goods and imposition of personal penalties. The Court emphasized the importance of concrete evidence in determining guilt, especially in cases involving non-notified items under the Customs Act.