2002 (2) TMI 690 - AT - Customs

Tribunal overturns customs penalties, emphasizing burden of proof on Revenue for smuggling cases.

The Tribunal allowed the appeal in a customs case involving the confiscation of foreign origin goods and imposition of penalties. The appellant ... Smuggling - Non-notified goods Issues:Confiscation of foreign origin goods, confiscation of Indian origin goods, imposition of penalty under Section 112(b)(I) of the Customs Act, 1962, burden of proof on Revenue for non-notified items.Confiscation of Foreign Origin Goods:The Commissioner of Customs had confiscated foreign origin photo films and cameras from the appellant's possession during travel. The Commissioner imposed a penalty under Section 112(b)(I) of the Customs Act, 1962. The appellant argued that the goods were legally purchased from hawkers in Calcutta for resale in Agartala. The initial inventory showed the goods as foreign origin, but a detailed inventory later revealed they were made for Indian companies. The appellant contended that the burden to prove smuggling lies with the Revenue, citing non-notified items under Section 123 of the Customs Act, 1962. The Tribunal found that the Commissioner's observation, that lack of documents indicated smuggling, was against established law. The Tribunal held that without evidence of illegal smuggling, the confiscation was unjustified, and the appeal was allowed.Confiscation of Indian Origin Goods:Along with foreign origin goods, Indian origin goods were also confiscated under Section 119 of the Customs Act, 1962, on the grounds of being used to conceal foreign origin goods. The appellant argued that the goods were legitimately purchased for resale. The Tribunal's decision to set aside the impugned order for foreign origin goods also applied to the Indian origin goods, as there was no evidence of illegal smuggling.Imposition of Penalty under Section 112(b)(I) of the Customs Act, 1962:A penalty of Rs. 5,000 was imposed on the appellant under Section 112(b)(I) of the Customs Act, 1962. The appellant denied the goods were smuggled and argued that purchasing foreign origin goods without import documents did not prove smuggling. The Tribunal, noting the lack of evidence of illegal smuggling, set aside the penalty along with the confiscation orders.Burden of Proof on Revenue for Non-Notified Items:The appellant contended that for non-notified items, the burden to prove smuggling lies with the Revenue. The Tribunal agreed, emphasizing that lack of importation documents does not automatically indicate smuggling for non-notified goods. Relying on previous decisions, the Tribunal held that without evidence of illegal smuggling, the confiscation and penalties were unwarranted. The appeal was allowed, providing relief to the appellant based on the lack of proof of smuggling for the goods in question.