2003 (1) TMI 744

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....emed on payment of fine of Rs. 2.5 lakhs, and also imposed penalty of Rs. 2 lakhs on appellant no. 2, partner of the firm, appellant no. 1, under Section 112(b) of the Customs Act. 2. The facts leading to the filing of the present appeals may briefly be stated as under - On 19-5-1998, the D.R.I. officers searched the residential premises of the appellant no. II at New Rohtak Road and also his business godown premises. During the search, the officers recovered 184 pcs. of Pioneers Speakers from his residence and 20 items of Car Stereo System/Car Cassette, CD remote changer, car audio and speaker of different brands from his business godown premises. All these goods were of foreign origin and as appellant no. 2 could not prod....

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....t back to the adjudicating authority for fresh decision after holding due enquiry from the persons/firms, disclosed by the appellants, who sold the goods in question to them. 5. After remand, the adjudicating authority held the enquiry from M/s. Expert Trading Company; Shri Ashok Jai Singh, Prop. of M/s. Jai Singh International; M/s. Sakshi Enterprises, but did not hold any enquiry from M/s. Sethi Electronics. The adjudicating authority after taking into consideration the evidence collected from these firms ordered the release of 40 pcs. of speakers and some other goods as detailed in the impugned order itself, but maintained the confiscation of other seized goods and imposed penalty of Rs. 2 lakhs on appellant no. 2. 6. The....

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.... 9. The bare perusal of the impugned order shows that after remand, the adjudicating authority did make enquiry from M/s. Expert Trading Company by recording the statement of Shri Rajesh Talwar, Partner of that company, wherein he admitted of having sold 20 pairs of speakers 252 to the appellants vide Bill No. 128, dated 12-5-1998 after having purchased from M/s. Auto & Hardware Enterprises, Mumbai, through bill dated 18-12-1997. The adjudicating authority has further observed that out of 184 pcs. of speakers, only 40 pcs. had been accounted for, from the statement of Shri Rajesh Talwar, and the purchase of the rest of 144 pcs of speakers had remained unaccounted by the appellants. Similarly, after recording the statement of Shri As....

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....11(d) of the said Act. The Department was required to prove three ingredients, namely, (i) the goods were of foreign origin; (ii) these were prohibited for import; and (iii) that these were imported contrary to any prohibition or restriction, but had failed to do so. No doubt, the goods carried the foreign brand name, but it could not be presumed that these had been smuggled in India for want of any evidence to that effect, especially when these are not prohibited goods under any provision of the Customs Act so as to raise presumption about their smuggled character. The appellants had produced the bills and invoices and disclosed the names of the firm from whom they purchased it. The fact that they had not been able to account for the purch....

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....nt of purchase and sale of the goods would not be sufficient to raise an inference that the goods were smuggled one. The ratio of the law laid down in all these cases fully and aptly applies to the present case of the appellants. They had been able to establish the purchase of the seized goods from M/s. Expert Trading Company; M/s. Jai Singh International; and M/s. Sakshi Enterprises. The fact that the entire purchase of the goods from these firms had not been proved, could not be made basis for raising inference that the non-accounted goods were smuggled goods. No fresh enquiry, as observed above, was conducted from M/s. Sethi Electronics, from whom some of the goods in question as detailed in the show cause notice, had been purchased by t....