Seized goods not proven smuggled, appeal allowed for unconditional release, Revenue's modification appeal dismissed.

SULTAN DHARANI Versus COMMISSIONER OF CUS. (P), MUMBAI

SULTAN DHARANI Versus COMMISSIONER OF CUS. (P), MUMBAI - 2007 (220) E.L.T. 820 (Tri. - Mumbai) Issues Involved:
1. Confiscation of 88.935 MT Zinc Ingots.
2. Unconditional release of 2.035 MT Copper Cathodes.
3. Unconditional release of 41.600 MT Copper Scrap.
4. Imposition of penalties under Section 112(a) and (b) of the Customs Act, 1962.

Issue-wise Detailed Analysis:

1. Confiscation of 88.935 MT Zinc Ingots:
The Appellant contended that the Zinc Ingots were legally imported and the discrepancy in the brand name ("CPM" instead of "CMM") was a typographical error. The Commissioner, however, found that the Appellant failed to provide convincing evidence to prove the licit importation of the Zinc Ingots and concluded that the goods were smuggled. The Tribunal, upon review, noted that the number of bundles and their weight tallied with the import documents. The discrepancy in the brand name was deemed a typographical error, supported by documentary evidence from foreign suppliers. The Tribunal held that the substantial correlation between the seized goods and the import documents was established, and thus, the illegal importation was not proved. Consequently, the confiscation of the Zinc Ingots was not justified.

2. Unconditional Release of 2.035 MT Copper Cathodes:
The Commissioner found no material evidence to discard the Appellant's claim that the Copper Cathodes were part of old stock. The foreign origin of the goods was not established, and the initial burden of proving illicit import was not discharged by the Revenue. The Tribunal upheld this finding, noting that the formal seizure of the Copper Cathodes occurred just two days prior to the issuance of the Show Cause Notice, and the Appellant's claim of old stock was consistent.

3. Unconditional Release of 41.600 MT Copper Scrap:
The Appellant provided two Bills of Entry showing clearance on payment of duty. The Commissioner observed that the transport documents produced by M/s. Metal Link Alloys Ltd. were fabricated, as they showed dates after the godowns were sealed. The Tribunal agreed with the Commissioner, noting the lack of credible evidence to show that the goods did not relate to the produced Bills of Entry. The Tribunal found no fault in the order of unconditional release of the Copper Scrap.

4. Imposition of Penalties under Section 112(a) and (b):
The Commissioner imposed a penalty on the Appellant for dealing with smuggled goods. However, the Tribunal found that the Revenue failed to prove the smuggled nature of any of the seized goods. The burden of proof was not discharged by the Revenue, and the allegations were based on surmises and conjectures. Consequently, the penalties under Section 112(a) and (b) were not sustainable.

Conclusion:
The Tribunal concluded that none of the seized goods were proved to be smuggled, and thus, no valid confiscation or penalties could be imposed. The appeal filed by the Appellant was allowed, and the goods were ordered to be released unconditionally. The Revenue's appeal for modification of the order regarding the release of Copper Cathodes and Copper Scrap was dismissed.