2005 (2) TMI 595 - AT - Customs

Tribunal overturns order, finds procedural flaws in Customs Act case

The Tribunal ruled in favor of the appellants, setting aside the impugned order and allowing the appeal with consequential relief. It was held that the ... Confiscation of goods meant for export Issues:1. Validity of the seizure of goods by Customs Officials.2. Ownership and possession of the seized goods.3. Procedural irregularities in the seizure process.4. Admissibility of evidence regarding ownership of goods.5. Confiscation of goods under Customs Act, 1962.Validity of the seizure of goods by Customs Officials:The case involved a raid where unclaimed cotton printed sarees were seized by BSF personnel along with Customs officials. The Customs Officials seized the goods under Section 110 of the Customs Act, 1962. A claim of ownership was made by an individual, supported by a license issued by the Directorate of Textile. The Customs authorities did not record statements of the BSF personnel who seized the goods, nor did they witness or attest the seizure memo. The delay in handing over the seized goods to Customs officials raised questions. The appellants argued that the seizure was not in accordance with the law, emphasizing the lack of witness and procedural irregularities.Ownership and possession of the seized goods:The appellants presented evidence, including bills and invoices, to support their claim of ownership of the seized goods. The Customs authorities admitted that the goods were in the possession of the appellants. The goods were seized from a general area, not near the border, indicating they were not meant for export. The appellants' submission of a bill from a store in Kolkata further supported their ownership claim. The Customs authorities failed to rebut the evidence presented by the appellants, and it was acknowledged that the goods were seized in an abandoned condition, negating any attempt to export.Procedural irregularities in the seizure process:The appellants argued that the raid and seizure were conducted improperly, highlighting that no witnesses were present during the search and seizure. They questioned why the seized goods were not immediately handed over to Customs officials by the BSF personnel during the raid. The absence of witness statements and the lack of attestation on the seizure memo by Customs officers were raised as procedural irregularities that rendered the seizure invalid.Admissibility of evidence regarding ownership of goods:The appellants submitted bills and invoices as evidence of purchasing the goods, but no inquiry was made by the investigating officer to verify this evidence. The adjudicating authority's decision was criticized for being based on assumptions and presumptions rather than concrete evidence. The lack of proper investigation and reliance on the seizure memo prepared by BSF personnel were highlighted as reasons to question the admissibility of evidence regarding ownership of the goods.Confiscation of goods under Customs Act, 1962:Ultimately, the Tribunal found in favor of the appellants, setting aside the impugned order and allowing the appeal with consequential relief. The Tribunal concluded that the goods could not be confiscated under the provisions of Section 113(b), (d) of the Customs Act, 1962, and therefore, no personal penalty could be imposed on the appellants. The decision was based on the failure to establish proper ownership and procedural irregularities in the seizure process.This detailed analysis of the judgment from the Appellate Tribunal CESTAT, Kolkata covers the issues of validity of seizure, ownership and possession of goods, procedural irregularities, admissibility of evidence, and the confiscation of goods under the Customs Act, 1962.