1990 (8) TMI 241 - AT - Customs

Summary

Issues Involved:
1. Whether the Department discharged the initial burden to raise a presumption of the smuggled nature of the goods.
2. Whether the respondents discharged the burden if the Department's burden was satisfied.
3. Whether the confiscation of the goods and the imposition of the penalty on the respondents were warranted.

Issue-wise Detailed Analysis:

1. Whether the Department discharged the initial burden to raise a presumption of the smuggled nature of the goods:

The Department argued that the goods were smuggled based on the fact that M/s. Haridas & Sons, the purported suppliers, were found to be fictitious. They relied on the Supreme Court decision in Indra Ramchand Bharwani v. Union of India, which supports the seizure of goods on reasonable belief. However, the respondents contended that the burden of proof lies with the Department to establish that the goods were smuggled, as supported by the Supreme Court decision in AIR 1964 S.C. 136. The Tribunal noted that the goods were not notified under Section 123 or Chapter IV-A of the Customs Act, 1962, which means the burden of proof remained with the Department. The Tribunal found that the mere fact that M/s. Haridas & Sons could not be located did not suffice to discharge this burden. Therefore, the Department did not discharge the initial burden to raise a presumption of the smuggled nature of the goods.

2. Whether the respondents discharged the burden if the Department's burden was satisfied:

Given the Tribunal's finding that the Department did not discharge its initial burden, the issue of whether the respondents discharged their burden does not arise. The Tribunal emphasized that the burden of proof lies with the Department and does not shift merely based on the foreign origin of the goods or the non-existence of the supplier.

3. Whether the confiscation of the goods and the imposition of the penalty on the respondents were warranted:

The Tribunal held that since the Department did not establish the smuggled nature of the goods, the confiscation ordered by the Assistant Collector was not in accordance with the law. Consequently, the penalty imposed on the respondents under Section 112(b) of the Customs Act, 1962, was also unwarranted. The Tribunal upheld the Collector (Appeals)'s decision to release the goods and set aside the penalty, finding no merit in the appeal filed by the Collector of Customs (Preventive), West Bengal.

Conclusion:

The appeal filed by the Collector of Customs (Preventive), West Bengal, was dismissed. The Tribunal concluded that the Department failed to prove the smuggled nature of the goods, and thus, the confiscation and penalty imposed were not justified. The decision of the Collector (Appeals) to release the goods and set aside the penalty was upheld.