2003 (11) TMI 261 - AT - Customs

Summary

Issues:
1. Confiscation of wrist watches and pens under Section 125(1) of the Customs Act.
2. Imposition of penalties under Section 112(b) of the Customs Act.
3. Burden of proof on the appellants to show goods were not smuggled.
4. Examination of evidence and contentions regarding the origin of seized goods.

Analysis:

1. The Commissioner of Customs ordered the confiscation of 121 wrist watches and 203 pens valued at Rs. 15,18,205/- and Rs. 56,250/- respectively, under Section 125(1) of the Customs Act. He allowed redemption on payment of fines and imposed penalties on the firm and its partner under Section 112(b). The watches were notified under Section 123, but the pens were not.

2. The Commissioner concluded that the goods were smuggled into the country after examining various contentions regarding their origin. He found that the appellants failed to prove the goods were not smuggled, as required under Section 123. The pens were not allowed to be imported since 1947, and the appellants could not establish a legal importation. The seized goods were held liable for confiscation under Section 111(d) of the Customs Act.

3. The appellants argued that the Commissioner did not appreciate the evidence presented by them, while the Department supported the Commissioner's order. The question revolved around whether the appellants proved that the seized watches were not smuggled. The contention that some watches were locally assembled and others procured from passengers was not substantiated with proper evidence.

4. The burden of proof rested on the appellants to show that the watches and pens were not smuggled. Claims of locally assembled watches and procurement from passengers were not adequately supported. The Commissioner rightly held that the burden was not discharged, leading to the confiscation of the goods under Section 111(d) of the Customs Act. The pens, despite not being notified under Section 123, were also confiscated as the appellants failed to provide a satisfactory explanation for their possession.

5. The Commissioner's order was modified on appeal, reducing the redemption fine and penalties imposed. The confiscation of watches and pens was upheld, but the redemption fine was reduced. The penalty on the firm and its partner was also reduced, with the penalty on the deceased partner being set aside. The decision highlighted the importance of proving the legal origin of goods to avoid confiscation under the Customs Act.