2004 (6) TMI 161 - AT - Customs

Smuggling - Chattons and cup chains of foreign origin - Burden of proof - Confiscation of goods - Appeal to Appellate Tribunal - HELD THAT - In the present case no evidence has been tendered by the appellants to show that the goods were imported by such IE Code holders. Even goods, which are freely importable, can be imported only by those persons who possess IE Code given by the Licensing authorities under the Exim policy. The Department's contention is that the goods are non-duty paid and therefore liable to confiscation under Customs Act. We do not see any infirmity in the order of the Commissioner in this regard. Valuation , we observe that the goods have been valued after seizure in the presence of the appellants. No objections were raised at the time of seizure. The question of valuation cannot be raised at a later stage without any basis. Penalty imposed on the appellants, we observe that no evidence has been brought out by the dept. to establish that the two appellants-committed any one of the acts enumerated u/s 112(b) of the customs act knowingly. Mensrea is a necessary ingredient for imposing a penalty. While the goods are liable to confiscation no penalties can be imposed on the appellants u/s I12(b) as no evidence was adduced by the dept. to show that the appellants were knowingly transporting smuggled goods. The appeals are thus partly allowed.

Summary

Issues:
- Confiscation of goods and imposition of penalties by the Commissioner
- Burden of proof on the Department for non-notified goods
- Examination of evidence and arguments presented by both sides
- Import policy regulations and applicability of Customs Act provisions
- Valuation of seized goods
- Imposition of penalties on the appellants

Confiscation of Goods and Penalties:
The case involved the confiscation of goods and imposition of penalties by the Commissioner on two appellants who were found carrying Chattons and cup chains of foreign origin valued at Rs. 41,02,850. The appellants claimed to be mere carriers of the goods, stating that they were asked to deliver them by a third party. However, the owner of the goods did not come forward to claim them or provide proof of legal importation. The Commissioner held the goods liable for confiscation under the Customs Act.

Burden of Proof on the Department:
The appellants argued that for non-notified goods, the burden to prove that the seized goods are smuggled lies with the Department. The Tribunal examined previous Supreme Court judgments, emphasizing that the Department needs to establish a high probability of illicit importation based on circumstantial evidence. The appellants failed to satisfactorily explain the acquisition of the goods, shifting the burden onto them. The Tribunal upheld the Department's actions in this regard.

Import Policy Regulations and Customs Act Provisions:
The Tribunal considered the import policy regulations and the provisions of the Customs Act in relation to the seized goods. It was noted that even goods freely importable require importation by individuals with an Import Export Code Number. The appellants did not provide evidence that the goods were imported by authorized individuals, leading to the confirmation of confiscation under the Customs Act.

Valuation of Seized Goods:
The valuation of the seized goods was done in the presence of the appellants, and no objections were raised at that time. The Tribunal ruled that objections to valuation cannot be raised at a later stage without a valid basis, thereby upholding the valuation conducted during the seizure.

Imposition of Penalties:
Regarding the penalties imposed on the appellants, the Tribunal observed that the Department failed to establish that the appellants knowingly committed acts enumerated under the Customs Act. Mens rea, or the intent to commit an offense, is a necessary element for imposing penalties. As there was no evidence to show that the appellants knowingly transported smuggled goods, the penalties imposed were set aside.

In conclusion, the Tribunal upheld the confiscation of the goods but set aside the penalties imposed on the appellants, partially allowing the appeals based on the detailed analysis of the issues involved in the case.