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Imposition of penalty and deposit order based on ownership of seized goods. Analysis: The case involved an appeal against an order imposing a penalty and directing the deposit of seized Ammonium Chloride. The Customs Officers seized the goods from a godown in Imphal, leading to a legal dispute regarding ownership and subsequent actions. The appellant, standing as a surety for the release of the goods, was deemed the owner by the Department, justifying the penalty and deposit order. The appellant challenged this assertion, arguing that being a surety does not establish ownership. The High Court of Guwahati had ordered the unconditional release of the goods to another person, Sushil Mehendi, indicating that the goods were not contraband. The Adjudicating Authority's insistence on a bond and surety from the appellant contradicted the High Court's order, raising questions about the validity of the penalty and deposit requirement. The Tribunal scrutinized the circumstances and legal basis for the penalty and deposit order. It noted that the High Court's order for unconditional release of the goods contradicted the Department's actions, rendering the surety bond unnecessary. The Adjudicating Authority failed to provide substantial evidence or conduct proper inquiries to establish the appellant's ownership of the seized goods. Merely standing as a surety did not automatically confer ownership, especially when the High Court had already determined the goods were not contraband. The Tribunal emphasized that the burden of proof rested on the Department, which failed to meet the required standard. Consequently, the imposition of a penalty on the appellant and the demand for deposit were deemed unjustified and contrary to the High Court's directive. In conclusion, the Tribunal allowed the appeal, overturning the orders requiring the appellant to produce the goods and pay the penalty. It clarified that the decision pertained only to the appellant, leaving the order against Sushil Mehendi undisturbed. The judgment underscored the importance of adhering to court directives and ensuring a proper legal basis for penalties and deposit requirements in customs cases.
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