1. This matter originally was a revision petition which has been transferred to the Appellate Tribunal and is taken up as an appeal for consideration.
2. The learned Counsel for the Appellant argued that in the absence of reasonable belief or reason to believe that the goods were smuggled, the search and seizure were illegal. This point, however, was not pressed because even an illegal seizure can lead to confiscation if the goods are proved to be smuggled. Besides, no prima facie illegality was found in the search and seizure.
(1) In the reply to the show-cause notice the petitioners produced purchase invoices covering the goods seized. These invoices have not been disproved by the Department with the help of concrete evidence; (2) M/s Raja Bros., from whom some of the goods were purchased are declarants under Section 11C of the Customs Act, 1962 and they are maintaining all the prescribed accounts as required under Section 11B ibid. The petitioners after submitting valid purchase vouchers discharged the burden of proof cast on them and it was for the Department to disprove these invoices; (3) Most of the goods are neither covered under Section 11B of the Custom Act, 1962 nor are they notified under Section 123 ibid.
Therefore the burden of proving that the goods are smuggled is on the Department who failed to adduce any evidence lo prove the smuggled nature of the goods; (4) The penalty imposed on the petitioners is unjustified as mem rea is no proved as required under Section 112.
4. During the course of arguments, the learned Counsel drew our attention to the cash memo issued by Victoria Watch Co., Calcutta, with endorsement of J.S. Khorana, covering two items and to the three cash memos numbers 1384, 1385 and 1386 dated 4.10.1978 issued by Raja Bros., Jullunder, to appellants. He also relief on the cash receipt by one M.R. John for Rs. 315 representing the value of 10 item of goods.
5. The Departmental Representative was also heard. He submitted that the documents produced by the appellant were found to be unreliable for various reasons. These reasons were that: (i) The goods seized could not be correlated to the documents (in form cash memos etc.) produced by the Appellant; (ii) The Appellant at the time of seizure stated that he purchased most of the items from Karol Bagh, Delhi, and he could not trace the vouchers; (iii) The Departmental Representative also pointed out that for purchases made on 4.10.1978 the Appellant did not mention the particulars of the receipts on 6.10.1978, a strange circumstance considering the very short time lapse between the alleged purchase and the seizure. He also pointed out that in respect of the goods alleged to have been sold by Victoria Watch Co., the sale took place on 23.7.1968 in respect of one Citizen time piece and one thermos together costing Rs. 180 and the same goods are now claimed to have been sold to one P.K. Jain (not the Appellant) for a sum of Rs. 220 on 23.10.1977, which is a little over 9 years from the date of original sale.
7. In the findings the Assistant Collector has clearly recorded that several terns are covered either by Section 123 or Section 11B or both.
We are reproducing his portion below: I have gone through the case records, show cause notice, party's reply to show cause notice and submissions made at the time of personal hearing. I observe that only the following seized goods are notified under Section 123 and 11B respectively:_________________________________________________________________________Section 123 Section 11-B1, 2, 4, 6, 7, 10, 11 to 27, 29 to 36 1, 2, 4, 6, 7, 10 to 36, 39 to 4239 to 42, 47 and 49.
47 and 49.
It, therefore, appears that the bulk of the items are covered by one or the other these sections.
8. The Appellant's main contention that he produced valid documents to over all the goods has been disputed by the Department. On a perusal of the bills it seen that there is no complete correlation between the goods seized and listed on ages 2-3 of the Assistant Collector's order under 49 serial numbers and the documents produced by the Appellant, Just to verify the veracity, a random item as taken and it was enquired as to how the Appellant obtained the two numbers (sic) cigarette lighters (serial number 33 on page 3 of 0/0). No documents were (sic) to cover this item. Therefore, it is not correct to argue that all items under (sic) are covered by valid documents.
9. The Department has held that the documents are invalid not because they (sic) not correspond with the goods but because prima facie the documents were (sic) unreliable. They strongly rely on circumstance that on 6.10.1978 the appellant did not give any particulars of the purchases which were claimed to have (sic) made on 4.10.1978 in Jullunder itself. It also appears odd and unbelievable at goods which were purchased nine years ago by somebody in Calcutta were sold a high price. We are also unable to accept as bona fide the receipt claimed to have m signed by M.R. John on 5.10.1978. As claimed by the Department the address this person has not been given nor has this person been presented for amination before the adjudicating authority. Having taken cafe to get a stamped (sic) for the items, the Appellant omitted to give the address of the person beyond the words 'Karol Bagh, New Delhi'. These are minor discrepancies, but we are unable to overlook the major discrepancy that within 48 hours of the purchase the appellant did not mention the origin of the goods and did not produce the documents either on the spot or as soon thereafter as was possible.
There was no attempt at proof of the alleged purchases by the Appellant by examining as witnesses the persons, who according to him, had sold the goods. The rejection of the documents as unreliable is, therefore, correct.
10. In this state of evidence, we are not satisfied that the Appellant had done anything to discharge the onus cast on him in terms of Section 123 of the Customs Act, in regard to the bulk of the items.
11. In respect of at least some of the items the Appellant really has no right to ask for release. These items comprise items 326 and 327 of the annexure to 0/0 and claimed to be in a damaged condition and received from customers for repairs. The Appellants not having shown at any stage that these customers have made claims of ownership of these goods, the Appellants admittedly do not own them. Similarly, Items 17, 24 and 38 of the recovery memo were claimed to have been left with Appellants by a travelling salesman from Delhi who promised to collect the same by the evening. This travelling salesman still remains a mystery and the fact also remains that admittedly the Appellants have no rights in these articles.
12. In the circumstances, we see no reason to interfere with the orders of the Collector. The imposition of the penalty, is also correct in the circumstaces as the detailed reasons discussed above indicate that the Appellants were aware of the smuggled nature of the goods and dealt with them attracting the provisions of Section 112 of the Customs Act.
The Appellate Collector has already reduced the penalty substantially and we see no reason to further reduce the same. The appeal, therefore, fails.