TaxTMI 
TaxTMI 
2007 (11) TMI 633
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....ly imported into the country. Commissioner (Appeals) while allowing the appeal, observed that the goods were not non-notified under Section 123 of Chapter IVA of the Customs Act and are freely available in the market. In terms of the Circular No. 95/2003-Cus., dated 6-11-2003, the burden of proof in respect of non-notified goods under Section 123 of the Customs Act, lies upon the Revenue. Inasmuch as there was no evidence in the present appeal that the goods were smuggled into the country, he has set aside the order of confiscation, by relying upon the earlier decision of the Tribunal. 3. Shri R.K. Pardeshi, ld. DR appearing for the Revenue has referred to some of the decisions of the Tribunal to the effect that where Revenue has discharged the initial onus, the same gets shifted to the appellant. There can be no legal dispute for the above proposition. The onus for proving the smuggled nature of goods is transferable onus and can be shifted to the person from whom the possession of the foreign origin goods have been recovered. However, such shifting depends upon the discharge of initial onus placed upon the Revenue under the provision of law, which requires production of s....
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....ds were bought from open market in Musafirkhana, Mumbai and booked through M/s. Delux Road Lines Pvt. Ltd. under Lorry Receipt No. 93917 and 93935 dated 25-4-2003. He denied having any purchase bill/import documents for the impugned goods. He also stated that the bills/invoices given to the transporter were fake and the same did not have correct address. (3) No doubt, toys are not notified under Section 123 of the Customs Act, 1962 and hence the initial burden to prove that they are smuggled is on the departmental authorities. However, in this case it has been established that the goods are of foreign origin, the consignors are fake and non-existent, the purchase of the goods is not backed by any import documents or purchase bill, the statement given by the Manager of the consignee has admitted that the bills/invoices given to the transporter are fake and contain incorrect address. He has not also furnished any details from which shops/persons these foreign origin goods have been acquired. (4) It is true that freely importable goods can be imported into the country without an import licence but only after payment of ....
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....well as sales tax laws under proper bills/invoices. It would be perverse to presume that goods traded in commercial quantity without bills/invoices and without payment of domestic tax are goods licitly imported on payment of customs duty. 5. Considering the above and the fact that the impugned goods are in trade quantity and are valued at Rs. 94,200/-, I am of the view that the Customs Authorities have discharged the initial burden of proof on them and that the same are liable to be confiscated as held by the Original Authority. Accordingly, I set aside the impugned order-in-appeal and restore the order-in-original. Sd/- C. Satapathy Member (Technical) 2-8-2005 DIFFERENCE OF OPINION The following difference of opinion is referred to the Hon'ble President in terms of the Section 129C(5) of the Customs Act, 1962 :- Whether the Revenue's appeal is to be rejected as held by the Member (Judicial) OR Whether the impugned order-in-appeal is to be set aside and the order-in-original is to be restored allowing the Revenue's appeal as ordered by the Member (Technical). Sd/- C. Satapathy Member (Technical) 2-8-2005 Sd/- Archana Wadhwa Me....
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....dicial) had rejected the Revenue appeal and whereas the Hon'ble Member (Technical) has allowed the same by restoring the Order-in-Original and setting aside the Order-in-Appeal. 9. The observations of the Hon'ble Member (Judicial), in respect of the disputed issue are as follows : - "It is well known that toys of Chinese origin are being freely imported, in view of the liberalization of Import Policy, as such failing to produce documents cannot be held against the appellant. Ld. DR contention that the appellant was given a chance to explain the possession of the goods in question and has failed to do so, which would shift the burden of proof to the appellant, does not appeal to us. Distinction between notified and non-notified item under Section 123 would get blurred if in any case, it is the possessor of the goods who has to explain the possession. Settled law is to the effect that burden in case of non-notified goods rests heavily upon the Revenue and is required to be discharged by them by production, of tangible evidence. Failure of the appellant does not ipso facto leads to the inevitable conclusion that the goods are smuggled. In view of the above, I do not f....
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.... 2004 (175) E.L.T. 238 (Tri.-Mum.) - Rajendra Jagannath Parekh v. CC, Ahmedabad. 7. 2002 (149) E.L.T. 989 (Tri. - Kolkata) - Arvind Kr. Singh v. Commr. of Cus. (P), West Bengal. 8. 1992 (59) E.L.T. 150 (Tribunal) - Sumer Chand Jain and Nagin Chand Jain v. CC. 9. 1992 (59) E.L.T. 235 (Guj.) High Court - Maganlal Gulabchand Shah v. Union of India. 10. Maintained in 1997 (93) E.L.T. A185 (Supreme Court) - Maganlal Gulabchand Shah v. Union of India. 11. 2004 (163) E.L.T. 391 (Tri.-Mumbai) - Comm. of Customs, Ahmedabad v. R.P. Gangwal. 12. 2000 (120) E.L.T. 59 (Kar.) - Sri Bahubali v. CCE, Bangalore. 13. 1984 (16) E.L.T. 631 (Tri.) - Bahubali v. CC, Bangalore. 14. 1986 (26) ELT 108 (Tri.) - Narendra Kumar H. Patel v. CCCE, Jaipur. 15. CC v. D. Bhoormull - 1983 (13) E.L.T. 1546 (S.C.). 16. 1966 ITR 60-0011 SC - BEST & Co. v. CIT. 17. 1998 (101) E.L.....
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....section applies. (2) seizure under the Act, and (3) seizure in the reasonable belief that they are smuggled goods. When all the three elements are proved, the burden would shift to the accused to show that they are not "smuggled goods". The correct legal position is that in the absence of special notification under Sec. 123 of the Customs Act specifying goods to which the section applies, the onus of proof under that section cannot be placed on persons whose goods are seized. Where no presumption under Sec. 123 of the Act could be used against the accused it is for the prosecution to prove that the accused knew that the goods in possession was smuggled and imported into the country without a permit. 14. The Digest of the Law of Evidence by Stephen, Article 104 wherein it is stated that - "the burden of proof as to any particular fact lies on that person who wishes the Court to believe in its existence, unless it is provided by any law that the burden of proving the fact shall lie on any particular person; but the burden may in the course of a case be shifted from one side to the other and in considering the a....
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.... applied. Thus it is seen in respect of both categories of cases same principles applied. 16. In case of Maganlal Gulabchand Shah v. Union of India, the Hon'ble Supreme Court has upheld the decision of the Hon'ble Gujarat High Court holding that the burden of proof of smuggling of specified goods is sufficiently discharged if the Department furnishes prima facie proof of the goods having been smuggled and burden then shifts to the person concerned to discharge on the principle underlying Section 106 of the Evidence Act. In that case gold bars have been seized and the Department has produced prima facie evidence of smuggling of the gold wherein the burden shifted to the person from whose possession the gold was seized. Though this judgment distinguished the principle laid down in D. Bhoormull case, yet it does not speak that the burden entirely lie on the person from whose possession the smuggled goods are seized. Therefore, the principle laid down in D. Bhoormull case as observed by the Hon'ble Bombay High Court in the case of Ganesh Trading have to be applied in the instant case of non-notified goods under Section 123 of Customs Act. The principle laid down in Maganlal Gul....