2004 (2) TMI 505 - AT - Customs

Appeal partially allowed, foreign goods confiscation set aside. Redemption fine of Rs. 1,000 for seized compressors.

The appeal was allowed in part, with the absolute confiscation of goods of foreign origin set aside. The appellant was given the opportunity to pay a ... Absolute confiscation - confiscation with option of redemption fine - smuggling by clearance as unaccompanied baggage - onus of proof on department to establish smuggling - penalty for possession of smuggled goodsPenalty for possession of smuggled goods - onus of proof on department to establish smuggling - Whether the penalty imposed on the appellant for possession of the seized compressors could be sustained - HELD THAT: - The Tribunal found no material in the adjudication to impute knowledge to the appellant that the compressors were smuggled. The appellant had purchased the compressors in the market believing them to be validly imported. The Court applied the principle that the department must positively prove knowledge or culpability rather than shifting the burden to the appellant to prove a negative. On these facts the imposition of penalty was not justified. [Paras 3]Penalty set aside.Smuggling by clearance as unaccompanied baggage - absolute confiscation - confiscation with option of redemption fine - Whether absolute confiscation of the two compressors was sustainable and what relief, if any, should be granted - HELD THAT: - The compressors were traced to clearance as unaccompanied baggage, and such clearance was treated as smuggling, justifying confiscation. However, the Tribunal distinguished between prohibited goods and non-prohibited goods: since the compressors were not prohibited imports, absolute confiscation (which leaves no redemption) was held to be excessive. The Tribunal therefore modified the order of absolute confiscation to confiscation subject to redemption, allowing the appellant an opportunity to pay a redemption fine as an alternative to absolute loss of goods. [Paras 4, 6]Absolute confiscation of the two compressors set aside and modified to confiscation with option to redeem on payment of a fine of Rs. 1,000.Onus of proof on department to establish smuggling - absolute confiscation - Whether the seizure and absolute confiscation of other seized items bearing foreign markings from the appellant's premises could be upheld - HELD THAT: - The Tribunal held that mere foreign markings on goods do not, without more, establish unlawful importation or smuggling. The department is required to prove unlawful importation positively. Reliance on the fact that goods bore foreign make or markings was insufficient to sustain confiscation. The Tribunal followed precedent to the effect that the burden lies on the department and set aside the seizure and absolute confiscation of the remaining items. [Paras 5]Seizure and absolute confiscation of all other seized items set aside.Final Conclusion: Appeal allowed in part: penalty set aside; seizure and confiscation of all items except the two compressors quashed; absolute confiscation of the two compressors modified to confiscation with option of redemption on payment of a fine of Rs. 1,000; lower orders modified accordingly. Issues:- Appeal against order-in-appeal confirming confiscation of goods of foreign origin and imposition of penalty.- Confiscation of compressors and other goods seized from workshop.- Justification of absolute confiscation and imposition of penalty.- Validity of seizure and confiscation of goods with foreign markings.- Application of CEGAT judgment in similar cases.- Modification of absolute confiscation to redemption with fine.Analysis:The appeal was directed against the order-in-appeal by the Commissioner (Appeals) that upheld the absolute confiscation of certain goods of foreign origin seized from the workshop, along with a penalty of Rs. 30,000 imposed. The Customs officers seized 2 compressors and components of car air-conditioners of foreign make in 1990. These compressors were part of smuggled goods cleared as unaccompanied baggage at an under-declared value. The appellant claimed innocence, stating they bought the compressors believing them to be valid imports. The adjudication order lacked evidence of the appellants' knowledge of the goods' smuggled nature, leading to the conclusion that no penalty could be imposed.Regarding the confiscation of compressors, their link to smuggling through clearance as unaccompanied baggage justified confiscation, but absolute confiscation was deemed unjustified as the goods were not prohibited. The order of absolute confiscation was set aside, and the appellants were given the chance to pay a redemption fine. The seizure of other goods with foreign markings was found unjustified, as the burden of proof lay with the department to show illegal importation, not on the appellants to prove lawful importation. Citing a CEGAT judgment, the confiscation of the remaining items seized from the workshop was deemed without legal authority and set aside.Consequently, the appeal was allowed for all items except the compressors purchased from a specific individual. The absolute confiscation of these compressors was modified to confiscation with an option for redemption upon payment of a fine of Rs. 1,000. The lower authorities' orders were modified accordingly, partially allowing the appeal in these terms.