1989 (3) TMI 285 - AT - Central Excise

Issues:
1. Confiscation of YKK zips under Section 111(d) of the Customs Act, 1962.
2. Claim of goods by the appellant.
3. Application of Section 123 of the Customs Act.
4. Origin of the confiscated goods.
5. Reliability of invoices and import license.
6. Conduct of the appellant and lack of immediate claim.
7. Procedural aspects and retrospective effect of notifications.

Confiscation of YKK zips under Section 111(d) of the Customs Act, 1962:
The appeal challenged the order confiscating YKK zips under Section 111(d) of the Customs Act, 1962. The zips were seized by officers based on a reasonable belief that they were imported in contravention of law. The appellant contended that the confiscation was unjustified as the goods were licitly purchased from M/s. Goyals, who had a valid import license. However, the appellant failed to make an immediate claim after the seizure, raising doubts about the legitimacy of the transaction.

Claim of goods by the appellant:
The appellant claimed to have purchased the zips from M/s. Goyals and made payments through a bank, supported by invoices. However, discrepancies emerged regarding the origin and brand of the zips. M/s. Goyals did not produce their original import license, despite claiming to have imported the goods lawfully. The appellant's delayed response to the seizure and reliance on third parties to establish the legality of the transaction weakened the claim.

Application of Section 123 of the Customs Act:
The appellant disputed the application of Section 123 of the Customs Act to the zips, citing a notification in July 1984. The argument centered on the retrospective effect of the notification, which was upheld in a Karnataka High Court judgment. The zips, eligible for import only with a valid license, failed to establish a clear link between the confiscated goods and the invoices provided by the appellant.

Origin of the confiscated goods:
The origin of the confiscated zips, alleged to be of Japanese origin, was contested due to insufficient evidence in the mahazar. The appellant argued that the zips could be of Singaporean origin, challenging the basis for confiscation. However, discrepancies in the brand names and addresses on the packages further complicated the determination of the zips' origin, casting doubt on the appellant's claims.

Reliability of invoices and import license:
The reliability of invoices and import licenses became crucial in establishing the legitimacy of the transaction. M/s. Goyals' failure to produce their original import license and discrepancies in the invoices raised questions about the authenticity of the goods. The absence of concrete evidence linking the bank payments to the specific transaction undermined the appellant's case.

Conduct of the appellant and lack of immediate claim:
The appellant's delayed response to the seizure, reliance on intermediaries to handle the transaction, and failure to promptly claim the goods before customs authorities weakened the credibility of the transaction. The appellant's passive approach in addressing the seizure and expecting third parties to prove the legality of the goods worked against establishing a legitimate purchase.

Procedural aspects and retrospective effect of notifications:
The judgment delved into the procedural aspects of the case, particularly the retrospective effect of notifications and the application of Section 123 of the Customs Act. Citing a Karnataka High Court judgment, the notification extending Section 123 to zip fasteners was deemed to have retrospective effect, impacting the assessment of the confiscated goods' legality. The lack of evidence linking the confiscated zips to legitimate import transactions led to the rejection of the appeal.

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