1987 (5) TMI 204 - AT - Customs

Summary

Issues Involved: Confiscation of goods, personal penalties, validity of search and seizure, burden of proof for smuggled goods, compliance with Customs Act provisions, and penalties on partnership firm.

Issue-wise Detailed Analysis:

1. Confiscation of Goods:
The Additional Collector of Customs ordered the confiscation of goods valued at Rs. 20,046 CIF and Rs. 60,138 market value under Section 111(d), (p), and (o) of the Customs Act. However, goods valued at Rs. 23,505 CIF and Rs. 70,515 market value were released. The confiscation included both notified and non-notified goods. The Tribunal confirmed the confiscation of notified goods but set aside the confiscation of non-notified goods, stating that the department failed to discharge the initial burden of proving that the non-notified goods were smuggled.

2. Personal Penalties:
The Additional Collector imposed a personal penalty of Rs. 10,000 on Kishan Shamdas Bhatia and Rs. 5,000 on the firm M/s. Sham & Sons Photos. The Tribunal upheld the penalty on Kishan Shamdas Bhatia, finding no justifiable reason to interfere, given the gravity of the offense. However, the penalty on the firm was set aside because the other partners were dormant and not involved in the firm's affairs.

3. Validity of Search and Seizure:
The appellant contested the validity of the search, arguing that simultaneous searches at different premises were improbable and that the search warrants did not bear consecutive numbers. The Tribunal found no substance in these contentions, noting that the appellant's statement corroborated the panchnama and that search warrants were issued to different parties, explaining the non-consecutive numbering.

4. Burden of Proof for Smuggled Goods:
For non-notified goods, the Tribunal emphasized that the initial burden lies on the department to establish that the goods were smuggled. The department failed to provide satisfactory evidence to discharge this burden. Mere possession of foreign-origin goods does not suffice to prove smuggling. The Tribunal criticized the Additional Collector for not providing a finding that the non-notified goods were smuggled.

5. Compliance with Customs Act Provisions:
The appellant argued that as a repairer, he was exempted from complying with Sections 11C, D, E, and F of the Customs Act. The Tribunal rejected this argument, noting that the appellant did not have repair facilities and did not maintain records of goods received for repair. Therefore, the exemption did not apply, and the confiscation of notified goods was upheld.

6. Penalties on Partnership Firm:
The Tribunal found that imposing a penalty on the firm was unjustified since the other partners were not involved in the firm's operations. The penalty on the firm was set aside, and any penalty paid was ordered to be refunded.

Conclusion:
The Tribunal allowed the appeal concerning the penalty on the firm and set aside the absolute confiscation of non-notified goods, directing their return to the appellant or the payment of sale proceeds if already sold. The appeal regarding the penalty on Kishan Shamdas Bhatia was rejected, and the confiscation of notified goods was confirmed.