1997 (6) TMI 161 - AT - Customs

Summary

Issues Involved:
1. Whether the Antimony Metal seized is smuggled or imported goods.
2. Whether the seized goods are liable to absolute confiscation.
3. Whether the owner of the seized goods is liable to penalty.

Detailed Analysis:

1. Whether the Antimony Metal seized is smuggled or imported goods:
The case involves the seizure of Antimony Ingots from a godown belonging to M/s. Pawan Enterprises. The investigation revealed that the goods were stored without any licit documents. Statements from individuals involved indicated that the goods were of foreign origin and lacked proper documentation. However, the appellants claimed that the Antimony was of domestic origin, legally purchased, and not imported. The purity of the seized Antimony was found to be 93.4%, which contradicted the appellants' claim that imported Antimony has a minimum purity of 99.65%. Despite this, the Customs Department failed to prove definitively that the Antimony was smuggled. The ruling cited in the case of Commissioner of Central Excise, Allahabad v. Anup Kumar Agarwal (1997) held that the burden of proof lies with the Customs Department to prove the smuggled nature of goods not notified under Section 123 of the Customs Act. The department did not meet this burden, and the appellants provided documentation supporting their claim of domestic purchase.

2. Whether the seized goods are liable to absolute confiscation:
The Customs Department argued that the absence of documentary evidence regarding the source of acquisition justified confiscation under Section 111(d) of the Customs Act. However, the appellants contended that Antimony is freely importable under the Open General License (OGL) and not listed under Section 123 of the Customs Act. The tribunal found that Antimony metal is a freely importable good, supporting the appellants' contention. The ruling in Santosh Gupta v. Union of India (1990) emphasized that the burden of proof in customs proceedings lies with the department unless the goods are covered by Section 123 of the Customs Act. The department did not provide sufficient evidence to substantiate the claim that the Antimony was smuggled, and thus, the confiscation was not justified.

3. Whether the owner of the seized goods is liable to penalty:
The Customs Department issued a show-cause notice to the appellants, proposing penalties under Section 112 of the Customs Act. The appellants argued that the proceedings were based on vague allegations and lacked proper evidence. The tribunal noted that the Customs Department failed to prove the smuggled nature of the goods and did not provide adequate evidence to justify the imposition of penalties. The ruling in Kanungo & Co. v. Collector of Customs Calcutta (1983) stated that the burden of proof shifts to the appellant only when the Customs Department provides substantial evidence against the appellant's claim. In this case, the department did not meet this requirement, and thus, the penalties were not warranted.

Conclusion:
The tribunal concluded that the Customs Department failed to prove that the Antimony Metal seized was smuggled. The goods were found to be freely importable under the OGL, and the appellants provided sufficient documentation supporting their claim of domestic purchase. As a result, the goods were not liable to absolute confiscation, and the appellants were not liable to any penalties. The appeals were allowed, and the impugned order was quashed.