Seizure of imported fabrics quashed where customs rejected Bills of Entry without examining declarants or admitting their statements

CESTAT (New Delhi) held that seizure of imported fabrics could not be sustained where the Commissioner rejected Bills of Entry without examining declarants as witnesses and without admitting their statements into evidence. Minor discrepancies in marks and numbers or filing omissions did not justify rejecting the Bills of Entry. The Commissioner erred in treating those documents as invalid; therefore the order confiscating the goods and imposing penalties was set aside and the appeal allowed.

---

---

Issues: Whether the appellant discharged the burden of proving that the seized goods were not smuggled by producing Bills of Entry and other documents, thereby vitiating the Commissioners order of confiscation and penalty.

Analysis: The Tribunal examined whether the adjudicating authority was entitled to reject the Bills of Entry and other documents produced during the appeal merely because (a) they differed from statements recorded under section 108 at the time of seizure and (b) marks and numbers recorded in the Panchnama did not exactly match those in the documentary records. The Tribunal referred to the statutory scheme governing the relevancy of statements (Section 138B) and concluded that statements made under section 108 are relevant to prove their contents only if the person who made them is examined as a witness and the statements are admitted as evidence; in the absence of such examination, those statements cannot be used to impeach the Bills of Entry. The Tribunal further observed that inadvertent or incomplete entry of marks and numbers in Bills of Entry, or differences in recorded marks, does not automatically render the Bills of Entry inadmissible; such discrepancies do not justify rejecting otherwise admissible documentary proof of lawful importation, particularly where the adjudicating authority was earlier directed to consider the documents and failed to do so. Applying these principles to the facts, the Tribunal found that the Commissioner erred in rejecting the documentary evidence and in sustaining confiscation and penalties.

Conclusion: The documents produced by the appellant establish that the seized goods were legally imported; the Commissioners rejection of those documents was erroneous and the order of confiscation and imposition of penalties is set aside; appeal allowed in favour of the appellant.

---