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TMI Blog2002 (8) TMI 494X X X X Extracts X X X X X X X X Extracts X X X X ..... is section on 25-10-90. He produced two Bills No 015/90, dated 16-10-90 of M/s. R.R. Corporation, Navsari for Rs. 20,95,808/-. Another Bill No. 010/90, dt. 22-10-90 of M/s. Vespa Trading Co., Bombay for Rs. 8,57,792/- towards purchase. He opined that the goods were of foreign origin (Japanese). On further enquiry, it was learnt they had received another consignment of 5075 sets of Citizen Calibre 3200 components of watch movements from Lakshmi Watches Pvt Ltd., vide material inwards Slip No. 902891, dt. 30-8-90 and these were issued for production. Out of the components of watch movements supplied by Lakshmi Watches Pvt. Ltd., M/s. HMT had already manufactured 713 Nos. of watches which were pending strapping, another 82 Nos. were under sampling and testing and 4101 were in the assembly line and were semi-finished. In addition about 15 parts were found as such in specified quantities. The value of goods supplied by Lakshmi Watches Pvt. Ltd., was estimated at Rs. 28,63,660/- based on the sale price of watches supplied by R. R. Corporation and M/s. Vespa Trading Co. were arrived at Rs. 20,15,200/- and Rs. 8,16,050/- respectively based on supplier bills. (b) (i) As the components ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... covers and the other packing materials such as cardboard boxes used for keeping/concealing the goods under seizure, should not be confiscated under Section 118/119 of the Customs Act, 1962. (vi) penalty should not be imposed on them under Section 112 (a) and (b), (i) and (ii) of the Customs Act, 1962. (vii) The show cause further alleges that the watch movement being notified goods under Section 123 of the Customs Act, 1962 and the same were seized from the possession of M/s. HMT Ltd., in the reasonable belief that they were smuggled goods, the said M/s. HMT Ltd., were also called upon to prove as required under the said section that the goods under seizure were not smuggled into India. (d) The adjudicator after hearing the parties passed the following order :- (i) I order confiscation of the said ADD wrist watch movements of 8200 calibre of M/s. Citizen Watch Company, Japan, supplied to M/s. Lakshmi Watches (Pvt) Ltd., Bangalore to M/s. HMT Ltd., Watch Factory I II, Bangalore valued at Rs. 14,30,916.24, under the provisions of Section 111(o)/111(p) of the Customs Act, 1962. However, I allow M/s. HMT Ltd., Watch Factory I II, Bangalore to redee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zure, under the provisions of Section 118/119 of the Customs Act, 1962. (vi) I order that no separate duties of Customs be collected while releasing the goods upon realisation of redemption fine, in respect of the goods cited at paras (i) and (iv) above. (vii) I further impose the following penalties in the order mentioned companies/firms under the provisions of Section 112(b)(ii) and 112(a)(ii) of the Customs Act, 1962, respectively :- (1) M/s. HMT Ltd. Watch Factory I II, Bangalore. Rs. 5,00,000/- (Rupees five lakhs only) (2) M/s Lakshmi Watches (Pvt.) Ltd., Bangalore. Rs. 1,00,000/- (Rupees one lakh only) 3. We have heard both sides and considered the matter and find - (a) (i) Whether the goods under seizure viz., components of watch movements case parts, dial assembly, Hand sets, and Electronic circuit blocks are covered under customs Notification No. 204/84-Cus. and Notification No. 205/84-Cus., dated 20-7-1984 attracting the provisions of Sections 11B and 123 of the Customs Act, 1962; (ii) Whether the goods under seizure and supplied by indigenous suppliers viz., R.R. Corporation and Vespa Trading Co. are proved to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assembled movement. It is silent on the state of assembly. We have no reason to conclude accordingly as, one cannot read into the notification the un-assumed words or status simply because the said term does not bear such a reading. In net effect the said expression could only be understood by us as watch movements in completely disassembled condition are not covered by the notification. (ii) While considering the trade parlance meaning of the words Watch movements in para 59 the Collector relied upon the documents relating to the purchase order and invoices, etc., the words used therein as watch movements in CKD/SKD condition and ready for final assembly; description as calibre 8200 watch movement, also show that what was supplied was only watch movement in unassembled form i.e. set of watch parts which on assembly would result in a watch movement and not partially assembled movement or a CKD movement, as submitted by the learned SDR. These findings of the Collector are, erroneous as submitted by the Sr. Advocate, since all the documents referred to by the Collector only showed as spare parts of watch movements and the reliance placed by the Collector on dictio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bona fide nature of his goods. No trade/expert opinion was taken to opine the seized goods to be of Japanese origin. There is no comparison with the goods supplied by M/s. Lakshmi Watches (Pvt.) Ltd. No labels/markings were found on the consignment seized; the fact of that the seized goods did not contain the winding stem for assembly of watch movement has been ignored. Further Shri Devaraju, a technical expert of the department, in his cross-examination dated 16-12-92 has categorically said that he cannot identify any seized parts being of foreign origin. All this lead to one inescapable conclusion that the department was not interested in finding out from Sunil Kothari the bona fide nature of goods in question. If Shri Sunil Kothari was a fictitious person and his details are not available with the department, then how could the department in another case record his statement? Relying on the following case law as submitted by the Advocate - (i) 2001 (136) E.L.T. 1136 (Tri.- Mumbai) (Paras 19, 20, 21) in the case of Dhun Darabshaw Randeria v. Commissioner of Cus. (Preventive), Mumbai; (ii) 2001 (135) E.L.T. 125 (Tri. - Chennai) in the case of CH. Sai Srinivasa Rao v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould raise presumption against HMT. Relying upon the decision of the Supreme Court in the case of Collector of Customs v. Bhoomal, that the law does not require the prosecution to prove the impossible, and what is required is to establish such a degree of probability that a prudent person may, on its basis, believe in the existence of cat in issue. Reliance is also place in para 68 on the Mahazar drawn on 26-10-90 that the goods were of foreign origin. In para 70 the Collector held that though bill of entry was produced in the case of Lakshmi Watches, no such evidence was produced in the case of R.R. Corporation and Vespa Trading Co. Further Vespa Trading Co. was found to be fictitious. In para 72 the Collector held that he was satisfied that the goods seized are of foreign origin as far as supplied by Lakshmi Watches, as they were imported in the regular manner, but as far as the goods seized of R.R. Corporation and Vespa Trading Co., the same are illegal imports though there is no direct evidence of the event and process of smuggling of the said goods, the inference that could be drawn from the circumstantial evidence to arrive at such a conclusion. (ii) The Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 123 is only to watch movements, dials and cases and not all parts, the Tribunal held that burden of proof was cast upon the Customs for proving illegal importation of watch parts not notified under Section 123 had not been discharged and such parts are not liable for confiscation. Respectfully, following the same, we would also not hold watch parts in this case supplied by M/s. R.R. Corporation and M/s. Vespa Trading Company and M/s. Laxmi Watches Pvt. Ltd. liable for confiscation in the facts of this case specially when we find that on 4-12-90 Mahazar was drawn for obtaining the samples of the goods supplied by R. R. Corporation and Vespa Trading Co., - One set sent to Principal Jayachamarajendra Institute and another for expert opinion on the points :- (a) Whether 54 components of watch movement put together constituted full watch movement on assembly ? (b) Whether the said components were of foreign origin ? and on 14-12-90 Jayachamarajendra polytechnic opined that the components in covers A and B put together constitutes a complete watch movement. The said components are of automatic day and date watch movements of Calibre 8250 and may be of foreign origin. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Notification No 43/85-Cus., dated 28-2-85, then they could not have been sold and is not covering goods shown as SKD packs, CKD packs and the parts specified in the table. Since CKD packs were not permissible to be cleared under this notification we cannot accept the contention of the Departmental Representative that what the goods supplied to the appellants by M/s. Lakshmi Watches and these were completely CKD movements. The goods supplied by M/s. Lakshmi Watches could be only components and not CKD packs of the movements as pleaded. This notification in condition No (iii) provides reads as follows :- (iii) the importer shall, within such period as the Assistant Collector of Customs may specify in this behalf, produce a certificate from the Assistant Collector of Central Excise in whose jurisdiction the factory manufacturing such wrist watches is situated, to the effect that the said imported components have been used in the manufacture of the said wrist watches; and A plain reading of this condition does not convince us that the components imported under the benefit of this notification should be used in the manufacture of wrist watches, only in the premises of the impor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 111(o) for the alleged non-compliance of exemption granted under Notification No. 43/85-Cus. Once there is no reason to confiscate the goods for non-compliance of Notification No. 43/85, we cannot held confiscation under Section 111(o) of the goods under seizure. The same is, therefore, set aside. (f) No material has been brought and/or produced as to how the goods are liable for confiscation under Section 111(d) and infringement of Import Trade Control Law, since watch part imports are not totally banned and there are different source as determined by the Tribunal in Dhun Darabshw Randeria case [2001 (136) E.L.T. 1136] for the presence and trade in watch parts in Indian Markets. Therefore we cannot find any reason to uphold the confiscation under Section 111(d). (g) Once the liability for confiscation under Section 111(o)/111(d)/ 111(p) of the Customs Act, is not being upheld, we find no reason to upheld the confiscation under Section 120 and or under Section 119 of the Customs Act. The same, as ordered, is set aside. (h) When we find that no confiscation of the goods could be determined and sustained as arrived in the impugned order, we find no reason to uphel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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