1996 (7) TMI 414 - AT - Customs

Summary

Issues Involved:
1. Legality of the seizure of goods under Section 110 of the Customs Act, 1962.
2. Burden of proof under Section 123 of the Customs Act, 1962.
3. Allegations of fabricated documents and afterthought claims.
4. Confiscation and imposition of penalties under Sections 111(d), 111(p), and 112 of the Customs Act, 1962.
5. Validity of the High Seas Sale Agreement and related import documents.

Detailed Analysis:

1. Legality of the Seizure of Goods under Section 110 of the Customs Act, 1962:
The Directorate of Revenue Intelligence intercepted and seized four packages containing light emitting diodes (LEDs) of foreign origin at New Delhi Railway Station. These goods were seized under Section 110 of the Customs Act, 1962, due to the absence of transport vouchers, memoranda, bills, or any evidence of lawful acquisition and transportation, leading to a reasonable belief that they were liable for confiscation under the Customs Act.

2. Burden of Proof under Section 123 of the Customs Act, 1962:
The adjudicating authority held that LEDs are diodes and are notified under the Customs Act, thus placing the burden of proof on the party claiming ownership. The party failed to discharge this burden as the documents submitted did not correlate with the seized goods. The adjudicating authority noted that the markings on the packages did not match the documents provided, thus failing to establish the legality of the goods.

3. Allegations of Fabricated Documents and Afterthought Claims:
The department alleged that the documents provided by Shri Rishi Goswami and other parties were fabricated to escape penal action. The adjudicating authority found discrepancies in the documents, such as mismatched licence numbers and the absence of the name "King Bright Electronics Co. Ltd., Taipei" on any submitted documents. The claims of lawful acquisition were deemed afterthoughts and unsupported by credible evidence.

4. Confiscation and Imposition of Penalties under Sections 111(d), 111(p), and 112 of the Customs Act, 1962:
The adjudicating authority ordered the confiscation of 83,000 pcs. of LEDs valued at Rs. 1,11,000/- under Sections 111(d) and 111(p) of the Customs Act. A redemption fine of Rs. 50,000/- was imposed under Section 125. Additionally, penalties of Rs. 10,000/- each were imposed on Shri Rishi Goswami, M/s. Tamania Traders, and M/s. Metcon Engg. Co. under Section 112 for their role in dealing with the goods of foreign origin with prior knowledge of their liability to confiscation.

5. Validity of the High Seas Sale Agreement and Related Import Documents:
The appellants claimed that the goods were imported legally and covered by proper licences. However, the adjudicating authority found that the documents did not tally with the seized goods. The High Seas Sale Agreement and related import documents were found to be inconsistent and unreliable. M/s. Natural Products Export Corpn. denied any connection with the seized goods, further weakening the appellants' claims. The adjudicating authority concluded that the explanations provided by the appellants were unconvincing and uncorroborated, leading to the rejection of their claims.

Conclusion:
The appeals were dismissed as the adjudicating authority's findings were based on substantial evidence and legal provisions. The confiscation of the goods and the imposition of penalties were upheld, and the appellants' claims were deemed unsupported by credible evidence.