2007 (10) TMI 206 - AT - Customs

Synthetic polyester fabrics seized - smuggling - goods declared in packing list attached to B/E & goods actually seized weren t matching There is possibility that appellant after importing the goods and paying duty, on B/E, might have repacked the goods & stored it in the godown held that goods were not of smuggled nature as goods seized were not in original package but were in loose condition - full mazhar value of the goods is entitled as goods have lost their value & demand in 4 years

Summary

Issues:
1. Seizure of imported goods by Customs officers and subsequent confiscation.
2. Discrepancies between seized goods and bills of entry.
3. Burden of proof on the claimant to establish legitimate possession of goods.
4. Interpretation of Sec. 123 of the Customs Act, 1962 regarding seized goods.
5. Analysis of panchanama detailing the seizure of goods.
6. Comparison of seized goods with bills of entry to determine legitimacy.
7. Consideration of goods' value and entitlement to full mazhar value.
8. Eligibility for interest on confiscated goods.
9. Setting aside of penalty imposed on the appellant.

Analysis:
The case involved appeals against an Order-in-Original regarding the seizure and subsequent confiscation of imported polyester fabrics by Customs officers. The officers seized the goods from a godown and the appellants claimed ownership based on bills of entry. In the first round of litigation, the goods were confiscated, and penalties imposed. The Tribunal remanded the matter for re-adjudication. The current impugned order resulted in the confiscation and penalty imposition.

The appellant's counsel argued that the seized goods did not match the bills of entry, emphasizing discrepancies in quantity and origin. They relied on judgments to support their claim for refund and interest. The revenue contended that the goods were smuggled, citing mismatches between seized goods and bills of entry, asserting the correctness of the Commissioner's order.

The Tribunal analyzed whether the seized goods fell under a Customs Act provision and required the claimant to prove legitimate possession. The panchanama detailed the seizure process, indicating the goods' origin. Comparison with bills of entry revealed matching entries, suggesting legitimate importation. The Tribunal held that the confiscated goods were duty paid and not smuggled.

Considering the goods' diminished value over time, the Tribunal granted the appellant the full mazhar value of the seized goods and interest as per legal precedents. Consequently, the confiscation was set aside, leading to the penalty's revocation. The impugned order confiscating the goods was deemed unsustainable, and the appeals were allowed.

The judgment underscores the importance of establishing the legitimacy of seized goods, interpreting relevant legal provisions, and considering the value and entitlements concerning confiscated items, ultimately leading to the reversal of confiscation and penalties.