TaxTMI 
TaxTMI 
2000 (3) TMI 90
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....s and godown of appellant was searched at Rajkot on 16-1-1998 by the officers of Jamnagar Customs division, on the basis of intelligence collected. 8124 pieces of foreign origin of ball bearings were found in the business premises namely M/s. Ball bearings and Machinery Co. and 1289 pieces of source type was found in godown. Appellant could not produce any document or explain about the import of the above material as the owner of the above premises. Goods worth Rs. 1,07,294/- (from business premises) and Rs. 1,70,075/- (from godown) were seized, and kept in boxes for safe custody, under the panchnama dated 19-1-1998. Statement of appellant was recorded on 16-1-1998 and 27-2-1998. Show cause notice was issued on 3-7-1998 to the appellant to ....
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....ings cited. Irrelevant case law is relied. Goods seized are single items from different sources. Non accountal of possession does not render the above goods liable for confiscation. Unless department proves that they are covered under Chapter IVA or section 123 of Customs Act, which is not shown. 3. Shri K.M. Patwari, the ld. JDR for respondent has argued that this is a case of town seizure. Appellant's statement admit that seized goods are of foreign origin. Appellant, though undertook, failed to produce documents for licit possession of seized goods. Seizure is on 16-1-1998. Period of import is not clear from the policy. Ball bearing comes under REP/OGL, with condition of actual user, but not under free category. Burden is shifte....
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....to import. He had purchased them on piece meal basis in cash from the salesman visiting his shop, considering the requirement of trade. He was not given any documents from the salesman nor he had invited them. He had purchased them from salesmen duly approved by All India Ball Bearings Merchant Association and Ball and roller bearings Merchant Association coming from Mumbai and other cities of India. They met him personally for selling of bearings from open market. After purchase, when he approached for documents, they assured that such documents would be produced by them, if demanded. However to avoid Customs involvement, nobody could come forward. The department mainly relied on the above material and issued show cause notice. 6.  ....
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....zed are prohibited goods under Section 111(d) of Customs Act has to be, and is accepted. Proceedings under Customs Act being penal in nature, burden is always on the department to establish the case as per 1990 (48) E.L.T. 210 (Bom.) = 1991 (33) ECR 380 in the case of Santosh Gupta v. UOI. In order to attract Section 123 of Customs Act, the essential goods must be smuggled goods. The term "smuggled" means goods of foreign origin and imported from abroad. There must be some thing suggesting their foreign origin and their recent importation from abroad. It cannot, from unaccounted goods be referred that they are smuggled goods; for they must be stolen goods as per 1983 (14) E.L.T. 1775 in the case of Shantilal Mehta v. UOI. So with this backg....
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....ld have accounted for the possession or acquisition of foreign ball bearings, and its importation, which he has failed, and kept silent irrespective of the fact that it may not be notified goods, nor coming under Section 123 of Customs Act. It is for the appellant to prove the fact, and it never shifts. Appellant has failed to discharge that burden of showing licit possession of seized goods. The question of department discharging the burden arises, when the appellant produces documents showing licit possession of seized goods. The above finding in the light of decisions of Tribunal, goes against the basic principles of Quasi Penal nature of Procedures under Customs Act and the requirement of department to establish two facts as observed in....
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....penalty on appellant. The department has not even tried to establish it. Further it is clearly held that burden of proof shifts to assessee only when the department has discharged the initial burden falling on it. Since ball bearings are not prohibited goods, it cannot be presumed that the impugned goods were brought illegally into the country, and confiscation is not justified. The decision aptly applies to this case. Another latest decision in 1999 (111) E.L.T. 906 in the case of Kulbhushan Jain v. Commissioner of Customs, both regarding town seizures of ball bearings is dealt with. As per JDR this is a case of town seizure. Paragraph 18 and 19 of the order is relevant wherein it is clearly held that - "foreign origin of goods by itself i....