1998 (4) TMI 253 - Commissioner - Customs

Appellate authority overturns penalty and confiscation order, emphasizing burden of proof and due process.

The appellate authority set aside the impugned order of penalty and confiscation of electronic goods, ruling in favor of the appellant. The decision ... Seizure - Smuggled goods Issues: Seizure and confiscation of electronic goods, violation of principles of natural justice, burden of proof on department, legality of confiscation under Section 111(d) of Customs Act, 1962.Seizure and Confiscation of Electronic Goods:The case involved the seizure of electronic goods from two premises, with the appellant claiming to have purchased them from hawkers without proper documentation. The appellant argued that the goods were freely importable and transferable under license, questioning the confiscation under Section 111(d) of the Customs Act, 1962. The adjudicating authority imposed a penalty and confiscated the goods, prompting the appellant to appeal.Violation of Principles of Natural Justice:The appellant contended that the impugned order violated the principles of natural justice as the decision was made without a proper hearing. Despite a stay order directing the appellant to deposit the penalty, the appellant raised concerns about the lack of due process in the adjudication of the case.Burden of Proof on Department:The appellate authority highlighted that in cases involving non-notified goods, the burden to establish smuggling lies with the department under Section 123 of the Customs Act, 1962. The authority noted the department's failure to provide substantial evidence beyond the appellant's statements to prove the goods were smuggled.Legality of Confiscation under Section 111(d) of Customs Act, 1962:The appellate authority emphasized that confiscation under Section 111(d) is only justified when dealing with notified goods. Since the goods in question were freely importable and transferable, the authority deemed the confiscation illegal without additional evidence from the department proving smuggling. The authority set aside the impugned order and allowed the appeal based on the lack of evidence linking the appellant to the smuggling of foreign goods.In conclusion, the judgment focused on the burden of proof in cases involving non-notified goods, emphasizing the department's responsibility to provide substantial evidence to establish smuggling. The decision highlighted the importance of due process and the illegality of confiscation without proper evidence, ultimately setting aside the impugned order and ruling in favor of the appellant.