1989 (10) TMI 165 - AT - Customs

Summary

Issues:
- Whether the Palladium Chloride seized is liable for confiscation based on being of foreign origin?
- Whether the burden of proof regarding the lawful importation of the goods rests with the Department or the appellants?
- Whether the goods are covered under relevant customs regulations and import policies?
- Whether the Collector's order was justified in confiscating the goods and imposing penalties?

Analysis:

1. The appeal challenges the Collector of Central Excise's order confiscating 10 kgs of Palladium Chloride for being imported without a proper license. The appellants argue they procured the chemical through a tender and it was not of foreign origin. The central issue is whether the Palladium Chloride was indeed of foreign origin and subject to confiscation and penalties.

2. The appellants contend that the chemical was repacked domestically and not imported illegally. They argue that the burden of proof rests with the Department to show the goods were smuggled. The appellants also highlight that the Palladium Chloride was not a banned item under the I.T.C. Policy, questioning the basis of the Collector's order.

3. During the hearing, the appellants presented evidence that the chemical was supplied through an open tender and not imported directly. They emphasized that the labels indicating German origin were inconclusive proof of illegal importation. The appellants also pointed out the lack of evidence regarding the original supplier's involvement in smuggling.

4. The Department argued that the foreign labels on the containers and the unavailability of the original supplier for cross-examination indicated illegal importation. However, the appellants countered by stating that the goods were not covered under relevant customs regulations, shifting the burden of proof to the Department.

5. The Tribunal analyzed previous case laws and emphasized that the burden of proving illegal importation rests with the Department. The Tribunal found the Collector's presumptive approach lacking concrete evidence of smuggling or non-payment of duty, ultimately setting aside the order and allowing the appeal.

6. The judgment highlights the importance of concrete evidence in proving illegal importation and duty evasion. It underscores the need for the Department to establish clear violations of customs regulations before confiscating goods and imposing penalties. The decision ultimately favors the appellants due to the lack of substantial proof supporting the Collector's order.