Customs seizure of sari-length fabrics upheld where cutting did not change their character and late defence evidence was rejected.

Goods cut into sari lengths were treated as fabrics, because mere cutting did not alter their essential character into wearing apparel; Section 123 of the Customs Act therefore applied. Refusal to summon defence witnesses was upheld because the request was made belatedly and the proposed evidence would not have changed the contravention findings, so no denial of reasonable opportunity arose. A separate show cause notice to a claimed owner was unnecessary where he failed to assert ownership promptly and the material indicated he was not the owner. The confiscation and penalty orders were sustained.

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Issues: (i) whether the 19 pieces of saris recovered from the residential premises were "fabrics" so as to attract the burden of proof under Section 123 of the Customs Act, 1962; (ii) whether refusal to summon defence witnesses vitiated the adjudication for want of reasonable opportunity; and (iii) whether Prem Chand Kapur was entitled to a separate show cause notice before confiscation of the seized fabrics.

Issue (i): whether the 19 pieces of saris recovered from the residential premises were "fabrics" so as to attract the burden of proof under Section 123 of the Customs Act, 1962.

Analysis: Fabric was treated as cloth, while a sari was treated as wearing apparel. Merely cutting cloth into sari lengths did not by itself change the character of the goods from fabric to sari. The item would acquire the character of a sari only when further work such as stitching, fixing of a fall, border or embroidery was done. On that basis, the recovered pieces retained the character of fabrics.

Conclusion: The goods were correctly treated as fabrics, and Section 123 applied. The finding was against the petitioners.

Issue (ii): whether refusal to summon defence witnesses vitiated the adjudication for want of reasonable opportunity.

Analysis: The request to summon the suggested witnesses arose at a late stage, after the petitioners had initially stated that the goods were purchased from unknown persons. The adjudicating authority found that the proposed witnesses were introduced belatedly and that their testimony would not have affected the findings on contravention of the statutory requirements. In that background, the refusal to summon them did not amount to denial of a fair opportunity.

Conclusion: The enquiry was not vitiated on this ground. The finding was against the petitioners.

Issue (iii): whether Prem Chand Kapur was entitled to a separate show cause notice before confiscation of the seized fabrics.

Analysis: Prem Chand Kapur did not assert ownership promptly after learning of the seizure and remained silent until after confiscation. The adjudicating authority found on the material before it that he was not the owner of the seized fabrics. In those circumstances, a separate show cause notice was not warranted.

Conclusion: The absence of a separate show cause notice did not invalidate the confiscation. The finding was against the petitioner.

Final Conclusion: The confiscation and penalty orders were sustained, and the writ petitions were rejected.

Ratio Decidendi: Goods do not lose their character as fabrics merely because they are cut into sari lengths; and where belatedly introduced defence material would not affect the adjudication, refusal to summon such witnesses does not amount to denial of reasonable opportunity or invalidate confiscation proceedings.

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