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Issues Involved:
1. Whether the department has discharged its initial burden to prove that the goods in question are smuggled in character. 2. Whether the imposition of penalty is in accordance with the law. Issue-wise Detailed Analysis: 1. Whether the department has discharged its initial burden to prove that the goods in question are smuggled in character: The department's case was based on the interception of a truck carrying old and used readymade garments of foreign origin, near the Bangladesh border, at 3:30 AM. The appellant, who claimed ownership of the goods, admitted in a written statement that the goods were procured from a person who illicitly imported them from Bangladesh. However, the appellant later retracted this statement. The department seized the goods under Section 110 of the Customs Act, 1962, on the belief that they were smuggled. The Collector of Customs & Central Excise adjudicated the case, confiscating the goods and imposing a penalty on the appellant. The Board confirmed this decision. The appellant argued that the burden of proof was on the department to establish that the goods were smuggled, which was not discharged. The appellant contended that the goods were not notified items under Section 123 or Chapter IV-A of the Customs Act, and mere suspicion or circumstances were not enough to prove smuggling. The appellant also argued that the department did not allow cross-examination of witnesses and that the goods could have been lawfully acquired through auctions. The department argued that the appellant's initial admission and the circumstances of the case (goods found near the border at night) were sufficient to shift the burden of proof to the appellant. They contended that the retraction of the statement was an afterthought. The tribunal held that the initial burden of proof lies with the department when the goods are not notified under Section 123 or Chapter IV-A. The tribunal found that the department did not provide clear evidence that the goods were smuggled. The appellant's admission, even if taken at face value, did not conclusively prove smuggling. The tribunal cited several precedents where the mere foreign origin of goods or suspicious circumstances were not sufficient to establish smuggling without clear evidence. The tribunal noted that the appellant claimed to have purchased the goods from Rustam Biswas, who was exonerated by the Board. Therefore, if Rustam Biswas was given the benefit of the doubt, the appellant should also be exonerated. The tribunal emphasized that suspicion, however strong, is not a substitute for proof. 2. Whether the imposition of penalty is in accordance with the law: Given the finding on the first issue, the tribunal held that the imposition of penalty was not in accordance with the law. Since the department failed to prove that the goods were smuggled, the confiscation of the goods and the imposition of the penalty on the appellant were set aside. Conclusion: The tribunal concluded that the department failed to discharge its initial burden to prove that the goods were smuggled. The appellant was given the benefit of the doubt, and the confiscation of the goods and the imposition of the penalty were set aside. The appeal was accepted, and the confiscated goods were ordered to be returned to the appellant.
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