TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 963
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....ousers and 505 pcs short pants having a value of Rs.1,11,095.25 inclusive of IGST of Rs.5,290.25. The sale was duly reflected in the periodical GST return. On 14/15 July, 2019, Officers from Lucknow Customs(Preventive) apprehended one Truck No.HR38X0317 which was loaded with readymade garments. The driver produced a number of Invoices and e-way bills including the one issued by the Appellant to M/s Kotty Life Style of Delhi. All the goods alongwith the truck was seized under Section 110 of the Customs Act, 1962. A summon was served on the Appellant asking for his appearance before the Investigating Officer to which he replied that the goods sold by him were properly imported and duly invoiced in the name of the buyer. He sent copies of the Bills of Entry etc., which are verifiable online. Show Cause Notice [SCN] dated 07.01.2020 proposing confiscation of the goods and the carrier vehicle was served to the Appellant as a co-noticee. 3. In reply to the said notice, he submitted that since he had sold the goods, the ownership was transferred to the buyer. It was pointed out that it is not the case that the truck was carrying goods sold by him only or imported goods only. The truck ....
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.... proof is submitted to substantiate the claim, that they are no longer the owners of the impugned goods, the liability of Appellant as an importer under the provisions of Sub-section 26 of Section 2 of the Customs Act, 1962 cannot be unfastened. He submitted that the appeal regarding waiver of penalty is meritless and thereby the Order-in-Appeal needs to be upheld by the Tribunal. 6. Heard both the sides and perused the appeal records. 7. The present appeal has been filed assailing the imposition of penalty of Rs.3,00,000/- under Section 112(b) of the Customs Act, 1962. I find that the Appellant having been engaged in the business of import of ready-made garments from Bangladesh, had sold 2400 pcs. of Trousers and 505 pcs of short pant to Kotty Lifestyle Pvt. Ltd., vide Invoice No.G-209 dated 12.07.2019 valued at Rs.1,11,095.25 inclusive of IGST of Rs.5,200/-. The buyer informed the Appellant about seizure of the goods and asked him to give a declaration regarding sale of the said goods. As a good gesture, he authorized him to do the needful in respect of the goods sold by him. Subsequently, he came to know that the said letter was treated as claim for the goods which was nev....
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.... he was subsequently informed, booked through M/s M. R. Cargo, packed with goods from other sellers for onward transportation. Pertinent to mention that the goods sold by the Appellant were not even packed at his premises. It was collected through porter as per prevalent practice. The entire consignment of Kotty Lifestyle was seemingly loaded in Truck No. HR-38X0317 belonging/hired by said M/s M. R. Cargo which was detained and seized by Lucknow Customs under the provisions of the Customs Act, 1962. Since the ownership of goods got transferred to the buyer, the Appellant was not claiming ownership of the goods seized. Goods sold by him, though imported, did not have any brand name and he had nothing to do with the goods which did not resemble with identity of the imported goods, the Appellant submits. 9. It is the case of the Appellant that the seizure had been made at a place inside Indian Territory and the seized goods are mixed up. The seized goods do not have any marking and number that it could be correlated with the import documents which only bear the description of the goods like pants, jackets etc. It is a settled law that the goods once imported for home consumption, l....
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.... the goods whereas in the case before him the persons who claimed ownership of the seized goods had not been able to produce evidence showing their legal importation/acquisition/possession. He has held that the smuggled character of the goods is proved by the marks of foreign origin and that the ratio of the earlier Tribunal decision cannot be said to be relevant to the instant case. It was this aspect of the Collector's order that was stressed by the learned JDR while stressing the point that as laid down in the D. Bhourmul case by the Supreme Court it is not necessary to establish in a smuggling case every link in the chain of the clandestine activity. In that case the Supreme Court had, while conceding that no direct evidence of the illicit importation of the goods was adduced by the department, it had made available to the Collector several circumstances of a determinative character which coupled with the inferences arising from the dubious conduct of Baboothmull and Bhourmull could reasonably lead to the conclusion drawn by the Collector that they were smuggled goods. Examining this criterion to the present case, we find that the department has not, however, established even a....
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....oreign origin, when admittedly such marks were found in only some of them. Further, the thrust of the judgements cited by the learned JDR regarding the effect of the marks of foreign origin is only that they were of foreign origin or that they had been imported. That does not mean that these goods had been smuggled into the country rendering them liable to confiscation. 16. The appellants had explained how they had acquired the goods. There is no mention in the Collector's order that this had been disbelieved and that we found contentions untenable and hence rejected the same. The only reason given is that they did not produce only evidence regarding their legal importation/acquisition and possession. Examining the appellants' contentions the Collector has observed in his adjudication order that the seizure list did not indicate the marks of foreign origin and that on a reference to the seizing unit it had been ascertained that the goods under seizure bore marks of foreign origin, viz. Japan, Taiwan, Korea etc. and this information was communicated to the advocate. He has held that the marks of foreign origin borne on the goods under seizure bore conclusively prove their s....
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....oms Act, 1962 nor covered by Chapter IVA of the Act. Hence, placing the burden on the appellants to prove the lawful origin of the goods in India was not justified. The ratio of this case squarely applies to the present appeal. 17. The contention of the appellants that mere suspicion cannot amount to evidence and in absence of reliable evidence penalty is not sustainable, is based upon the decision of the Tribunal in Abdul Aziz & Sons v. Collector of Customs, New Delhi [1983 ECR 1747 CEGAT]. This has been rejected by the Collector with the observation that as in the above case the appellants were accused of smuggling Hashish in wooden furniture etc. mis-declared to Customs, the facts of that case are distinctly different from the instant one, the ratio of the decision cited was not relevant to the case before him. This is a palpably wrong conclusion by the Collector. The stand that suspicion cannot amount to evidence is an unexceptionable generalisation which is truly applicable to any case irrespective of the difference in the nature of case, or the commodity or modus operandi involved. 18. The Collector was, however, on better ground while dealing with the conte....