2003 (12) TMI 252 - AT - Customs

Summary

Issues:
- Appeal against order of confiscation of ball bearings of foreign origin
- Burden of proof on department to prove goods are smuggled
- Reliance on case law from previous eras
- Interpretation of 'illegal procurement' admissions
- Onus on department to prove smuggled nature of goods

Analysis:
The appeal pertains to the confiscation of ball bearings of foreign origin from a trader's premises, contested by the Revenue. The Commissioner (Appeals) found that the goods under dispute were not notified under the Customs Act and were freely importable on a license. The department confiscated the goods solely because the partner of the firm could not produce purchase bills to show duty payment. The Commissioner emphasized that the burden to prove smuggling lies on the department, requiring them to adduce evidence. Various court decisions were cited, stating that the department cannot shift the burden of proof to the appellant when goods are not notified under the Act. The Commissioner concluded that the confiscation was illegal due to lack of evidence beyond the absence of duty payment documentation.

Regarding the Revenue's contentions, it was noted that the party could not produce bills at the time of seizure, and reliance was placed on case law to argue that admission of foreign origin should suffice. The respondent admitted to dealing in illegally procured ball bearings, but this alone was not considered sufficient evidence. The absence of records indicating intent to evade taxes was highlighted. The statement under Section 108 was considered tangible evidence favoring the department.

In its analysis, the Tribunal observed that the reliance on old case law was unnecessary given the change in the Import Trade Control policy by the time of seizure. The shift from a ban on imports to a policy allowing the import of ball bearings without resale restrictions was significant. The Tribunal emphasized that the department must prove the smuggled nature of the goods, and mere admissions of illegal procurement do not conclusively prove smuggling. Ultimately, the Tribunal found no valid grounds to overturn the Commissioner of Customs (Appeals) order and dismissed the appeal accordingly.