1997 (6) TMI 200 - AT - Central Excise

Summary

Issues:
1. Whether the Customs authorities have the power to confiscate goods and impose penalties based on the goods being under Open General License (OGL).
2. Whether the Tribunal erred in not considering Sections 111 and 112 of the Customs Act.

Analysis:

Issue 1:
The main contention was whether the Customs authorities could confiscate goods and impose penalties solely because the goods were under OGL. The Department argued that OGL only pertains to the authority to import goods, and there are other Customs procedures and formalities that, if breached, could lead to confiscation under the law. The Department emphasized that the burden was on the appellants to prove that the goods were properly imported and cleared from Customs. The substantial quantity and value of the goods in question were highlighted. It was noted that when the supplier denied supplying the goods, it was the Respondents' responsibility to provide accurate information on the source of the goods. Since the Respondents failed to establish proper importation of the goods, the mere fact that the goods were under OGL did not warrant setting aside their confiscation as ruled by the Tribunal.

Issue 2:
The representatives for the Respondents argued that the applications sought a re-evaluation of evidence, which is not permissible in a reference application. They contended that the Tribunal had not adequately considered the findings in the Commissioner's adjudication order. Additionally, they pointed out discrepancies in the reference application, including the omission of other Respondents and the vague reference to specific sections of the Customs Act. However, upon careful consideration, the Tribunal found that it had thoroughly examined the evidence on record in its order. The Tribunal emphasized that when goods are not covered by specific provisions and are permissible under OGL, the burden on the Department to prove illicit importation is significant. The Tribunal concluded that the reference applications did not raise any legal points necessitating referral to the High Court, as they essentially sought a re-evaluation of evidence, which is not permissible in such applications. Consequently, the reference applications were rejected.