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TMI Blog2003 (2) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... e seized them on the reasonable belief that they were acquired in contravention of prohibition and restriction of import and are liable to confiscation. Naresh Mittal's statement was recorded on the next day. He said that he was an employee of the firm, whose head office was in Mumbai, and its proprietor was also in Mumbai. Apart from confirming this seizure, he stated that he has no documents relating to the importation of the goods. He has no records such as stock register, purchase register etc., relating to these goods. He produced a current sale book issued up to 30-7-1999. The rest of his statement is not of relevance to the issue before us. In his further statement of 2-8-1999, he disclosed various details about the firm. He said that he used to transfer the goods imported from various agencies, from head office Mumbai to Delhi and name the main transporters being Rajasthan Goods Carrier and Prakash Road Lines Ltd. The main sales of the goods were to V.K. Jain & Sons and Anirudh Trading Co., at Delhi and that some sales were also in retail (presumably to others). In his further statement of 4-8-1999, he said that original documents relating to shipment prior to 31-3-1999 had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not smuggled lay upon Anil Mahajan who was the owner of the goods. This burden not having been discharged, the goods were liable to confiscation, and the persons concerned were liable to penalty. 6.After considering the replies, and hearing the parties, the Commissioner, on 12-6-2001, appointed a committee of three officers to examine the goods in order to verify whether they tally with the documents under which Anil Mahajan claimed that they were imported. The committee submitted its report and the Commissioner has passed his order. 7.In that order, the Commissioner has held that the goods having been notified under Section 123 of the Act, and having been seized on the reasonable belief that they were smuggled, the burden of proving that they were not smuggled was upon Anil Mahajan. He has held that the report of the committee, which he appointed "lends no support to the contention of the noticees that the goods under seizure are covered under the documents produced by them". He has relied upon the fact that the purported carriers in the main failed to confirm that the goods were brought to Delhi under the cover of the transport documents which were produced by Anil Mahajan. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CC - 2001 (127) E.L.T. 415. 9.The submission of the departmental representative during the hearing and contained in the subsequent written submissions which were permitted by the bench area as follows. He emphasises that the discrepancy that the Commissioner finds with regard to the carriage of the goods from Mumbai to Delhi; the absence in the Delhi godown of the godown register and such documents. He emphasises that Anil Mahajan, despite his promise to produce documents on 3-8-1999, did not produce them even though he claimed that he had brought them from Mumbai. The documents produced by Anil Mahajan before the Court on 6-8-1999 found not to cover the goods. The committee which was formed by the Commissioner also found it impossible to correlate the goods. He distinguishes the case of S.K. Chains v. CC on the ground that the ratio it laid down, that the proof of purchase is sufficient to discharge the burden of proof, does not apply to the facts before us. 10.Although the Commissioner's order seems to suggest in the extracted portion of his order which we have reproduced in Paragraph 7 above that the import of the goods was prohibited, he does not specifically say so. The pos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aken advantage of the delay between the seizure on 6-8-1999 in order to create these documents, that delay is therefore of no relevance. 11.The Commissioner does not advance reason as to why the documents produced before the Court could not be correlated. However, the same documents were submitted to the enquiry committee of three officers whom the Commissioner has appointed and it will be necessary to examine the report of this committee. The committee has divided its observations into four sections dealing with the textile fabrics, men's suiting and jumpers and another set of textile fabrics. We are not concerned with men's suiting, these having been released by the Commissioner. As to the others, the committee has this to say. It finds that wherever the width is indicated in the bills of entry, the goods conform to the width specified. Wherever the bills of entry gave the range width, the goods fall within the range. No verification is possible where the bill of entry does not specify any width but merely says "various widths". The committee did not find the length to be relevant, since it noted the importer's claim that the seized goods were only part of the quantity that it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elated for all the fabrics examined. However, a few tags stitched to the rolls confirmed the country of origin." For the laces and instantly in the men suits and casual jumpers "this parameter is correlated". Now, this conclusion is in favour of the claimant that the goods were covered by the bills of entry with regard to lace and nothing is clear and categorical. To the extent that fabrics bore on them any markings and, they confirm the claim of the appellant. 14.Section 123 of the Act provides that in respect of the goods specified under that section, which are seized in the reasonable belief that they are smuggled, the burden of proving that they are not smuggled shall be upon the person from whose possession the goods were seized and if any person or upon the person who claims to be the owner and in case he does not claim the ownership. The learned single judge of the Bombay High Court has in Poonam Chand Maluk Chand Shah v. State of Maharashtra - 2000 (126) E.L.T. 161, devoted some part of its judgment to the history of Section 123, and corresponding Section 178A of the Sea Customs Act, 1878. He has noted that the observation of the Supreme Court in Collector of Customs v. Na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed a stocklot and were of assorted colours. To the extent that it was possible that therefore the appellant has discharged the burden of proof that the goods were imported by him. Section 123 refers to goods which are seized in the reasonable belief that they are smuggled i.e. by application of the definition contained in Section 2(39), liable to confiscation under Section 111 or Section 113. Any person could import such goods in any quantity. There are clearly conflicting objectives at play here. On the one hand any one could import the goods; on the other hand, the Customs department could call upon a person to show that he had legally imported them. The situation is significantly different to what it was earlier, say with regard to gold or wristwatches. Import of such goods was restricted being confined only to a few persons who were issued with a licence. Therefore, shifting of the burden of proving that the goods were legally imported through the person from whom they were seized was an adjunct to the policy restricting the imports. We are not able to see precisely in what matter, in a situation where no restriction is placed on the imported goods, the provisions of Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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