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TMI Blog2001 (11) TMI 113X X X X Extracts X X X X X X X X Extracts X X X X ..... ner Shri T.J. Khatri was that these goods were purchased from open market where they were freely available. It was claimed that their receipts indicated purchase thereof. The Joint Commissioner confiscated these goods permitting their redemption on payment of fine of Rs. 4,65,000/- He also imposed penalties on T.J. Khatri of Rs. 50,000/-. In disposing of the common appeal filed by the firm and Shri T.J. Khatri the Commissioner (Appeals) observed that while the wrist watches valued at Rs. 1,83,800/- were notified under Section 123 of the Customs Act, 1962, the other goods were not so notified. On this observation he reduced the fine from Rs. 4,65,000/- to Rs. 1,50,000/- and the penalty from Rs. 50,000/- to Rs. 15,000/-. This order has resulted in appeals numbers C/444/2000 and C/445/2000 being filed before the Tribunal. 4.On 21-7-1999 once again the shop premises were searched resulting in their seizure of similar goods valued at Rs. 5,23,960/-. This was proceeded by seizure of similar goods valued at Rs. 3,36,361/- from a tempo outside the shop premises. These goods were brought by Shri S.A. Khatri for sale in the shop. These goods were brought from Musafirkhana area. Shri S.A. K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of these goods were summoned. 11 of the suppliers in their statements claimed that various goods were sold by them to the present appellants. The summons included passengers also. The show cause notice was issued alleging liability to confiscation of the goods and of the partners to penalty. 6.Before the Commissioner the claim was made that due to liberalisation of Import Policy the baggage goods could be sold openly. Such goods could also be imported either under OGL or under special import licence. It was claimed that there was no restriction on such sale of goods imported in such manner. Certain case law was cited before the Commissioner. The Commissioner held that certain goods were found to have been acquired during the course of business and that the goods were found to be in order. He, however, listed the cases in which either the bills were not produced or some deficiencies were noticed in the documents. He repeatedly remarked that the payments were made in cash. He accepted the statements that barring watches other items were not notified under Chapter IVA of the Customs Act, 1962 or under Section 123 of the said Act. He, however, in his order observed as follows : "Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal judgment in the case of S.K. Chains v. CC [2001 (127) E.L.T. 415]. In the judgment the Tribunal was dealing with a case where gold bars of foreign marking were confiscated under the provisions of this Section. The Tribunal quoting statistics observed that over 1000 tones of gold had been imported over a period of 5 years on payment of duty under various schemes including that by importation of baggage. The Tribunal also observed that there were no restrictions in force on the resale of such goods. The Tribunal observed that the continuing inclusion of gold under this provision of law had created peculiar problems. In paragraph 7 of the judgment the Tribunal observed as under : "Thus, today there exists a very peculiar situation. On the one hand the Customs Act considers it necessary to ask a person to establish the legality of the origin of the gold seized from him while on the other hand in pursuance of the relaxation made in the Import Policy and the Baggage Rules framed under that very Act, there is a flood of foreign marked gold in the town. Such gold changes hands several times on importation. Since the repeal of the Gold (Control) Act in 1968, there is no legal re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... go to sustain the orders of confiscation. In fact, in one of the orders impugned before me in this batch of cases, [Order-in-Appeal No. 37/2000 BP] the learned Commissioner observed as follows : "It is observed that Jt. Commissioner has held the goods to be smuggled on the ground that the entire transaction had taken place strictly on cash basis with implied knowledge that the goods were smuggled. The reasoning of the Jt. Commissioner is faulty and I am inclined to agree with the learned counsel of the appellant that a cash transaction is not illegal per se, the illegitimacy of a transaction has to be proved by substantial evidence and not by sweeping presumption. Under the existing liberalised provisions of the Customs Act and Rules the passengers are entitled to bring brand new goods even under Transfer of Residence facility and can sell the same even outside the Airport or the Docks. Obviously such transactions would mainly be in cash and not through cheque procedure." 15.Thus it would appear that he was following the correct law. However, he maintains the order of fine and penalty on the ground that the appellants had not maintained systematic account of the goods that they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of Section 123 the cited judgment of S.K. Chains would cover the possession of the goods where the lawful acquisition can be established by the appellant. It appears that in a number of cases such goods were covered on account of bills, etc. In certain cases the claim made was that those were baggage items which were purchased in cash. In such a situation there may not be any difficulty in accepting the claim of lawful acquisition especially when this sentiment has been voiced by one of the Commissioner (Appeals) in one of the orders leading to the present appeals. 21.Not too far back in time, there was restriction on the re-sale of baggage goods. The Baggage (Conditions of Exemptions) Rules made in 1963 as well as in 1975 had laid down very rigid restrictions as to the conditions under which the baggage goods could be sold or offered for sale or put forth for sale. Generally speaking this could not be done until the value had depreciated to more than 50%. These rules were removed even before liberalisation took place. Today in the absence of any restriction on the post importation trading an anomaly has been created between the requirement of Section 123 of the Act and the l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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