2003 (7) TMI 621 - AT - Customs

Appellate Tribunal overturns Customs Commissioner's order on seized medicinal powder security.

The Appellate Tribunal CESTAT, New Delhi set aside the impugned order-in-original regarding the appropriation of a security amount by the Commissioner of ... Appropriation of security furnished for provisional release - confiscation under Section 115 - presumption of import/foreign origin from police seizure - requirement of notice before confiscation - liability of financer distinct from ownerPresumption of import/foreign origin from police seizure - Customs Authorities could not lawfully presume that the seized medicinal powder was illegally imported from Nepal based solely on the earlier police seizure. - HELD THAT: - The record shows the police initially intercepted the truck and seized the powder; the Customs Authorities later received the truck and seized goods from the police without conducting any independent inquiry into the nature, trade mark or country of origin of the powder. Where seizure is originally by the police, Customs cannot raise a legal presumption of importation or foreign origin in the absence of material identifying origin or an independent Customs inquiry. The Tribunal found no evidence to support such a presumption and held that the presumption under Customs law was not available on these facts.No presumption of illegal import arising from the police seizure could be legally drawn; the Customs' assumption of importation is unsustainable.Confiscation under Section 115 - requirement of notice before confiscation - The confiscation of the truck under Section 115 could not be validly ordered in the absence of lawful foundation for seizure and without notice to the interested parties. - HELD THAT: - Because the Customs' basis for seizure (the alleged illegal import of medicinal powder) was unsupported, the statutory sanction of confiscation under Section 115 could not be invoked. Further, there is no material on record to show that notice was given to the owner or that the owner was called upon to produce the truck before confiscation. Confiscation in such circumstances is legally impermissible.The order of confiscation under Section 115 is invalid and cannot be sustained.Appropriation of security furnished for provisional release - liability of financer distinct from owner - requirement of notice before confiscation - The security furnished by the appellants as financers for the provisional release of the truck could not be appropriated by Customs where they were not the owners, were not required to produce the truck, and no notice was shown to have been served on them. - HELD THAT: - The appellants had furnished security for provisional release in their capacity as financers with an interest in the vehicle, not as owners. There is no record that they were called upon to produce the truck after adjudication or that any notice of confiscation was served on them. In the absence of such procedural requisites and given the invalid basis for confiscation, the appropriation of the security by the Commissioner was held unlawful.Appropriation of the security furnished by the financers is not legally sustainable and must be set aside.Final Conclusion: The impugned order of the Commissioner of Customs insofar as it appropriated the security and ordered confiscation of the truck is set aside. The appellants' appeal is allowed with consequential relief as permissible under law. The Appellate Tribunal CESTAT, New Delhi considered the validity of an order-in-original regarding the appropriation of a security amount by the Commissioner of Customs. The truck in question was intercepted with medicinal powder, but no evidence supported illegal import. The appellants, as financers, were not called to produce the truck for confiscation. The impugned order was set aside, and the appeal was allowed.