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Issues:
Challenge to order passed by Customs Excise and Gold (Control) Appellate Tribunal (CEGAT) allowing appeal filed by respondents, Possession of prohibited goods under Customs Act, Burden of proof under Evidence Act, Interpretation of statutory provisions and case laws. Analysis: 1. The petition challenged the order passed by CEGAT that allowed the appeal filed by the respondents. The case involved a large quantity of smuggled ball bearings and electrical goods found in a warehouse, diverted to Mumbai for sale in the open market. The goods were of foreign origin from Romania, Czechoslovakia, Russia, and Poland. 2. The focus was on 219 cases of ball bearings under the control of respondent Nos. 1 and 2. Despite being of foreign origin, the respondents could not explain the large quantity found in their custody. The Commissioner of Customs directed confiscation but allowed redemption on payment of fines. The Tribunal reversed this order based on lack of evidence of illegal importation. 3. The petitioner argued that the burden of proof had shifted to the respondents under Sections 106 and 114 of the Evidence Act. The respondents failed to explain crucial facts within their knowledge, leading to appropriate inferences drawn by the Commissioner. The Tribunal erred in interfering with these findings. 4. Reference was made to circulars and case laws regarding the burden of proof in customs cases. The Supreme Court's interpretation highlighted that establishing circumstances could infer the goods were smuggled, even without direct evidence of illegal importation. The Tribunal's decision failed to consider these legal principles. 5. The Division Bench judgment of the Calcutta High Court was cited, emphasizing that principles under Section 123 of the Customs Act may not apply in all cases. The judgment in a previous Supreme Court case was not brought to the Division Bench's notice, making their decision contrary to established legal principles. 6. Ultimately, the High Court interfered with the Tribunal's order, quashing it and allowing redemption of goods as per the Commissioner's earlier order. An interim stay was placed on the order's operation. The Rule was made absolute with no order as to costs, concluding the judgment.
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