1990 (7) TMI 233 - AT - Customs

Summary

Issues Involved:
1. Legality of the seizure of goods under Section 111(d) and Section 119 of the Customs Act, 1962.
2. Imposition of personal penalty under Section 112 of the Customs Act, 1962.
3. Burden of proof regarding the smuggled nature of the goods.
4. Applicability of Section 123 of the Customs Act, 1962.
5. Validity of the adjudicating authority's order.

Detailed Analysis:

1. Legality of the Seizure of Goods under Section 111(d) and Section 119 of the Customs Act, 1962:
The appellant was intercepted at Calcutta Airport with a briefcase containing electronic parts, integrated circuits, and bearings of foreign origin. The goods were collectively valued at Rs. 1,89,503.37 (CIF) and were seized by Customs authorities on the belief that they were smuggled, as the appellant failed to produce valid documents for their legal acquisition. The seizure was conducted under Section 111(d) and Section 119 of the Customs Act, 1962.

2. Imposition of Personal Penalty under Section 112 of the Customs Act, 1962:
The adjudicating authority imposed a personal penalty of Rs. 10,000/- on the appellant under Section 112 of the Customs Act, 1962. The appellant contended that the penalty was unjustified as there was no evidence proving that the goods were smuggled. The appellant argued that the goods were not notified under Section 123 of the Customs Act, 1962, and hence the burden of proof lay with the department to establish that the goods were smuggled.

3. Burden of Proof Regarding the Smuggled Nature of the Goods:
The department argued that the appellant's misdeclaration and the presence of foreign markings on some goods indicated that the appellant was aware of the contents and their smuggled nature. However, the Tribunal held that merely possessing foreign-marked goods does not automatically classify them as smuggled. The burden of proof initially lies with the department to establish the smuggled nature of the goods, which was not sufficiently discharged in this case.

4. Applicability of Section 123 of the Customs Act, 1962:
The Tribunal noted that the goods were not notified under Section 123 of the Customs Act, 1962, or covered by Chapter IV-A of the Act. Therefore, the presumption of smuggled goods under Section 123 was not applicable. The Tribunal referenced several decisions, including *Gudipati Papa Rao v. Collector of Central Excise, Guntur* and *Tarlochane Singh Surie v. Collector of Customs & Central Excise, Shillong*, to emphasize that the mere presence of foreign markings does not suffice to classify goods as smuggled without additional evidence.

5. Validity of the Adjudicating Authority's Order:
The Tribunal found that the adjudicating authority failed to provide sufficient evidence to prove that the goods were smuggled. The appellant's statement that he was unaware of the contents of the briefcase and was merely delivering it for someone else was not sufficiently countered by the department. The Tribunal concluded that the department did not meet the burden of proof required to impose a penalty under Section 112(b) of the Customs Act, 1962.

Conclusion:
The Tribunal allowed the appeal, setting aside the imposition of the Rs. 10,000/- penalty on the appellant. It was ordered that the sum of Rs. 3,000/- deposited by the appellant towards the predeposit of the penalty amount be refunded. The goods, however, remained confiscated as no one claimed ownership.