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TMI Blog2003 (8) TMI 347X X X X Extracts X X X X X X X X Extracts X X X X ..... d under Section 111(d) of the Customs Act, 1962, (ii) The packing material namely the gunny bags and the cloth bags in which the seized goods were packed should not be confiscated under Section 118 of the Customs Act, 1962, (iii) Customs duty of Rs. 4,58,122/- along with interest due, if any, payable on 17 bales (1067.19 Kgs.) of smuggled silk yarn seized should not be demanded from Shri Vikram Jain under Section 28(1) read with 28AB of the Customs Act, 1962, (iv) Customs duty of Rs. 2,15,584/- along with interest due, if any, payable on 8 bales (502.20 Kgs.) of smuggled silk yarn seized should not be demanded from Shri Ashok Kumar Shroff under Section 28(1) read with Section 28AB of the Customs Act, 1962, (v) The customs duty of Rs. 27,13,548/- is liable to be paid along with interest due on the 111 bales of smuggled silk yarn, valued at Rs. 23,24,000/- received by Shri Vikram Jain and sold by him in the past shall not be demanded from him under Section 28(1) of the Customs Act, 1962 read with Section 28AB of the Customs Act, 1962, (vi) The customs duty of Rs. 19,55,710/- liable to be paid along with interest on the 80 bales of smuggled silk yarn, valued at Rs. 67,20,000/- re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... INGING, China National Silk Imp. & Exp. Corp., Sichuan Branch. Since the custodian of the goods at the premises of M/s. Deluxe Roadlines could not show licit import for the silk yarn of foreign origin, the said goods were seized by the officers, after drawing mahazars thereof. Enquiries were thereafter made at Bombay, Calcutta and other places and statements of the truck movement clerk-in-charge, Shri Muralidharan of M/s. Deluxe Roadlines, various other employees of the transport company were recorded and it transpired that noticees, Shri Vikram Jain, Shri Lalit Jain, Shri Bheemraj D. Jain and Shri Ashok Kumar Shroff were the recipients of the said bales whereas out of the seized 25 bales, Vikram Jain was to receive the 17 bales under seizure, Ashok Kumar Jain was to receive 8 bales. (b) On 1-6-2000, the officers again searched the godown of M/s. Deluxe Roadlines and recovered 10 additional bales of smuggled silk yarn for which GC No. 121030, dated 27-5-2000 was produced indicating the consignor as M/s. Tropical Textiles, Mumbai and consignee as Abdul Gafor and description of the goods was shown as 'waste old chindi', while GC No. 12050, dated 27-5-2000 showed the consignor a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ralidhar, Rs. 75,000/- on Shri Rahul Dharmashi, Rs. 3,00,000/- on Shri Vikas of Calcutta and Rs. 3,00,000/- on Shri Ashok of Calcutta was imposed under Section 112(b) of the Customs Act, 1962. Hence these appeals. 3. After hearing both sides and considering the material on record and after waiver of pre-deposit, the appeals are taken up for disposal by this common order. It is found :- (a) (i) MRS yarn is not notified under Section 123 of the Customs Act, 1962. As regards the 25 bales under seizure, the show cause notice in Para 47 reads as under :- "47. From the above, it is decisively arrived at the conclusion that the 15 bales of raw silk yarn of Chinese origin, weighing 954.45 Kgs., valued at Rs. 14,31,675/-, seized on 30-5-2000 and the 10 bales of raw silk yarn of Chinese origin, weighing 614.95 Kgs., valued at Rs. 9,22,425/- seized on 1-6-2000 from the godown of M/s. Deluxe Roadlines Pvt. Ltd., No. 79, 4th Cross, Narasimha Raja Road, Bangalore-2; totalling to 25 bales of raw silk yarn, totally weighing 1,569.40 Kgs. and totally valued at Rs. 23,54,100/- were smuggled into India since the said goods were transported without any importation documents, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty, 10% surcharge, 4% SAD and 0.05% cess) of 44.11%. The amount of Rs. 11 lakhs paid vide TR6 Challan dated 8-6-2000 stands to be adjusted towards customs duty, fine, penalties and adjudication levies." (iii) It can therefore, be concluded that imported MRS yarn is freely available and can be traded in the markets in India without molestation from the Customs Preventive Officers. The strict onus of proving that the MRS impugned is on the Department. (iv) From the findings, as recorded and arrived at by the ld. Commissioner, it is apparent that a contention was made before him that the goods had been released at Calcutta Port and they had not been imported and cleared at Bombay. The 'proper officer' and the adjudicating authority of the case would be therefore by Customs Authorities at Calcutta. The Commissioner has recorded this submission in Para 235 and thereafter in Para 237, he has found that since in the facts of this case, goods were seized at Bangalore and the action proposed in this show cause notice and for his consideration was in respect of the seized goods (i.e. 25 bales) and since the proceedings of the confiscation of the seized goods was an action in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds. (v) As regards the MRS yarn being not notified under Section 123 of the Customs Act, he concluded as follows :- "264. I have also considered the submission made by the noticee that silk yarn being not notified under Section 123 of the Customs Act, 1962 burden of proof is on the Department to prove that the goods have been illicitly imported, I find from the records that the goods were brought into India in violation of the Customs Act, 1962 without filing Bill of Entry, making a declaration and obtaining clearance under Section 47 etc. which renders the impugned goods as prohibited goods provided under Section 2(33) of the Customs Act, 1962. Such goods are liable for confiscation under Section 111(d) of the Customs Act, 1962 and also become smuggled by virtue of the definition of "smuggling" provided under Section 2(39) of the Customs Act, 1962, according to which "smuggling in relation to any goods means any act or omission which will render the goods liable for confiscation under Section 111 or 113. As per Section 11A(a) of the Customs Act, 1962, "illegal import" means import of any goods in contravention of the provisions of this Act or any other law for the time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 178A of the Sea Customs Act, (predecessor and pari materia Section 123 of Customs Act, 1962), that case being made by Police on July 16/17, 1958, they could not uphold the order of the Division Bench of the High Court, which proceeded on the basis that burden had shifted on the owner of the Gold and they remitted the matter back to the High Court to reconsider the conviction based on the findings of the ld. 'Session Judge', the prosecution had positively established that the goods were smuggled. The Supreme Court again on an appeal, by the same Gian Chand, for the very same seizure of Gold, held that 'Collector, therefore could not invoke any assistance from that Section, the burden of proof that the gold was smuggled gold, lay on the Customs' (Gian Chand etc. 1985 ECR 2232 SC). The Supreme Court in the later case ordered the release of the Gold under seizure, while it upheld the confiscation of the currency based on a findings of voluntarily and genuine nature of the statements recorded. In the present order impugned before us, we find the Adjudicator has recorded in Para 44 of the impugned order :- "..... Here it is pertinent to mention that the Department is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard to any other goods, the rule in sub-section (1) of Section 178A would not apply unless the Central Government had specifically applied the same by notification in the official gazette. It is a common ground that to the material time, no such notification applying the Section to the categories in question had been issued. In respect of such goods the provisions of the Evidence Act and the Code of concerned procedure do not in term, govern the onus of proof in proceeding under Section 167(8) of the Act. In conducting these penal proceedings, therefore Collector of Customs is to be guided by the basic canons of criminal jurisprudence and natural justice." We would find that the Basic Canon of Criminal jurisprudence has been held by the Supreme Court in the case of Ambalal v. U.O.I. [1983 (13) E.L.T. 1321 (S.C.) = 1983 ECR 1935 SC] to be :- "8. We cannot also accept the contention that by reason of the provisions of Section 106 of the Evidence Act, the onus lies on the appellant to prove that he, brought the said items of goods into India in 1947. Section 106 of the Evidence Act in term does not apply to a proceeding under the said Acts. But it may be assumed that the principl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use, by a tenant, one Shri Rajib Saraf, who was residing near his residence. Why that house was not located and lead pursued, is not evident? Why Subrota Mondal not confronted with the material on record and questioned further? It leads to a conclusion that investigators have not pursued the investigations, with due diligence to prove or disprove the claim that the goods were cleared or not cleared from Calcutta port. Merely sending a summon and not visiting the premises of Rajib Saraj with the assistance of Shri Subrota Mondal, who knows the residence, is fatal to the enquiries, it shows lack of interest in pursuing same, is indicating and an effort or desire not to link the goods under seizure with imports cleared through Calcutta. On incomplete enquiries, confiscation cannot be upheld. (vii) The findings of the Commissioner that the action of confiscation of the goods was under his territorial jurisdiction as action in 'rem' and support from the Tribunal decisions in the case of Engee Industrial Services Pvt. Ltd. [1996 (87) E.L.T. 152], Ram Nath Jayanth [2000 (119) E.L.T. 312] and Road Star Carriers [2000 (124) E.L.T. 913] as relied upon by the ld. DR are found to be tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustoms Act, 1962 is fixed by the levy under Section 12, thereof, on goods. Only it has to be discharged by the importer or the person having custody or and possession or and consumer of the goods. It has therefore to be conclusively arrived at in the finding as to why Import Duties in this case are being fastened on to Transit handers i.e., consignment agents at Bangalore. Since there is no finding on this aspect, the order on duty demand is also required to be set aside. (c) Before parting with the case, it would be relevant to observe that the misdeclarations on the lorry receipts are evidently made to escape the Karnataka State Sales Tax liability that ipso facto cannot be the fulcrum to rest the assumption that the MRS yarn is smuggled. There is no law that requires the duty paying documents to accompany imported goods at all times within the mass of goods in Indian Market. Chapter IVA of the Customs Act, 1962 is not applicable to MRS yarn. (d) Since the matter is being remitted back to the appropriate authority no, findings are being arrived at, on the other issues. They are left open to be determined in the remand proceedings. 3. In view of the findings arri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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