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Collector of Customs Vs. Smt. Tejbir Kaur and anr. - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Delhi
Decided On
Reported in(1987)(31)ELT119TriDel
AppellantCollector of Customs
RespondentSmt. Tejbir Kaur and anr.
Excerpt:
.....and fine; (4) action has been taken against the appellants on the basis of an advertisement for sale of goods mentioned at si. nos. 1 to 6 of annexure a to the panchnama and goods mentioned against item 1 to 12 of annexure c to the panchnama. since the collector ultimately found only item at si. nos. 1 to 6 of annexure a to the panchnama to be liable to confiscation there was an error on his part in taking the value of the goods at annexure a to be rs. 1,06,500/- where in fact all the goods listed in annexure a would only account for that value; (5) there is also nothing in the collector's order to show that the fact of advertisement and the particulars contained therein had in fact been correlated to the goods under seizure. in the absence of relevant details and a finding that the.....
Judgment:
1. A show cause notice under Section 131(3) of the Customs Act, 1962 was issued by the Secretary to the Govt. of India on 7th October, 1982 wherein he asked the respondent to show cause why Order No. 315-316/82 dated 30-7-82 passed by the Central Board of Excise & Customs should not be set aside and Order No. 4 of 1982 passed by the Collector of Customs & Central Excise on 2nd March, 1982 should not be restored.

This matter was transferred to the Tribunal and is being dealt with as an app 2. The facts of the case are that Shri Narinder Singh gave an advertisement on 15-6-80 in the Hindustan Times and the Times of India offering for sale one airconditioner, one refrigerator, one even and a cooking range. According to the Revenue, the Customs had information that goods of foreign origin were being sold at the residential premises of the respondents. A search was undertaken and household and miscellaneous goods like airconditioners, refrigerators, cooking range, etc. were found and were alleged to be displayed for sale. During the search, one exercise book containng 54 pages and some loose papers were also seized. Scrutiny of this exercise book showed that the respondents had already sold a large quantity of goods which they had earlier cleared either under the Baggage Rules free of duty or under the Transfer of Residence Rules under full or partial exemption. Statement of 12-8-80 deposed that he had advertised the sale of foreign origin goods, that the value of goods which had been sold by him and his wife Smt. Tejbir Kaur was approximately Rs. 28,095/- at both the places partly at his own residence in Greater Kailash Enclave and partly at his brother's place. Smt. Tejbir Kaur in her statement dated 26-6-80 deposed that she had already sold some goods of foreign origin and that she had to dispose of the goods brought by them under Transfer of Residence Rules to repay about Rs. 60,000/- which she borrowed from her mother-in-law. Show cause notices were issued to Shri Narinder Singh and his wife Smt. Tejbir Kaur wherein they were asked to explain the licit import of the goods under seizure and were also asked to show cause why the goods should not be confiscated under Section 111(0) of the Customs Act, 1962, since they had contravened the conditions prescribed under the Baggage (Conditions of Exemption) Rules, 1975. The third allegation was that the two had sold huge quantity of foreign origin goods which were cleared to them under the Baggage Rules and under the Transfer of Residence Rules and that this fact was supported on the basis of entries about the sales made in the Exercise Book recovered from -their residence.

3. The Collector of Customs and Central Excise, Delhi, adjudicated the case. The Collector held that some of the goods listed in the Annexure to the Panchnama had been licitly imported by the parties. In some "cases, he gave the benefit of doubt. The goods listed in Annexure A to the Panchnama dated 5-6-80, the total value of which was Rs. 1,06,500/-, were held to be liable to confiscation as they were advertised for sale in the newspapers and also displayed for sale at the residence of the respondents. The Collector held that in so doing they contravened the provisions of the Baggage (Conditions of Exemption) Rules, 1975 and that v the goods were liable to confiscation under Section 111(0) of the Customs Act. The Collector confiscated these goods accordingly and gave an Option to the respondents to pay a fine of Rs. 21,300/- in lieu of confiscation. He further held that on the basis of the exercise book seized from their residential premises and on the basis of the statements made by the respondents, it was established that they had sold goods worth Rs. 28,095/- in violation of the conditions of exemption under which the baggage was cleared. The Collector, therefore, imposed a penalty of Rs. 5,625/- on each of the respondents under Section 112 of the Customs Act.

4. The respondents appealed against this order to the Central Board of Excise & Customs. The Board set aside the Collector's order on the following grounds :- (1) The Collectorate records do not include the statements recorded from the appellants nor the show cause notice issued in the case; (2) the Collector's order is also silent about the goods which are alleged to have been actually sold by the appellants and for which they have been penalised; (3) the Collector has not taken into account adjudication order No. 550/80 copy of which was produced before the Collector also. In this order, certain goods have been allowed clearance to the appellants on payment of duty and fine. It means that there was no evidence available with the Collector to controvert the statements of the appellants that most of the goods in question had been allowed clearance in terms of this order on payment of duty and fine; (4) action has been taken against the appellants on the basis of an advertisement for sale of goods mentioned at SI. Nos. 1 to 6 of Annexure A to the panchnama and goods mentioned against item 1 to 12 of Annexure C to the panchnama. Since the Collector ultimately found only item at SI. Nos. 1 to 6 of Annexure A to the panchnama to be liable to confiscation there was an error on his part in taking the value of the goods at annexure A to be Rs. 1,06,500/- where in fact all the goods listed in annexure A would only account for that value; (5) there is also nothing in the Collector's order to show that the fact of advertisement and the particulars contained therein had in fact been correlated to the goods under seizure. In the absence of relevant details and a finding that the goods seized were the ones which were covered by the advertisement the orders of confiscation were not tenable; and (6) the lenient view taken by the Collector itself testified that the offence was not of a serious nature.

5. The Central Government felt that the Board's orders were not correct and that the Collector's orders should be restored. Hence the show cause notice was issued to the respondents.

6. In the circumstances, the question before us is whether the Board's orders are wrong and, if so, whether the Collector's orders should be restored.

7. The first ground that the Collectorate records do not include the statements recorded nor the show cause notice issued in the case, cited as a reason for setting aside the Collector's orders is, no doubt, not very strong. As observed by the Central Government in the show cause notice, this was easily remediable.

8. The next ground of the Board is that the Collector's order is silent about the goods which are alleged to have been sold by the respondents for which they have been penalised. We note that, as recorded in para 25 of the Collector's order, it was denied by the respondents that the goods mentioned at SI. Nos. 1 to 12 of Annexure C were advertised and offered for sale. Even taking into consideration the statements of the respondents wherein the advertisement for the goods was admitted, we note that this advertisement (The Times of India dated 15-6-80 - copy supplied by the respondents during the hearing) merely mentions Westing-house airconditioner and refrigerator, National microwave oven, etc. Annexure A to the Panchnama lists out these six articles valued at Rs. 1,06,500/-. These include three pieces of Westinghouse airconditioners of 1-1/2 tons, one piece Westinghouse airconditioner of 2 tons, one Frigidair airconditioner 1-1/2 tons, one national microwave oven, one Philips cooking range and one Westinghouse refrigerator.

Neither the Collector nor the Board have shown as to who imported these goods and when. Besides it is argued on behalf of the appellant that Notification No. 84 Customs of 1975 made rules called Baggage (Conditions of Exemption) Rules, 1975. Rule 2(c) which is relevant for the present proceedings lays down that the market price of the goods should have depreciated to less than 50% of the market price before the goods could be sold, displayed or advertised or offered for sale. From a copy of the Baggage Receipt No. 303672 dated 19-1-80 (provided by the respondents) we note that two refrigerators were valued at Rs. 3,000 and five airconditioners were totally valued at Rs. 7,500/- at the time of importation. The Collector's order nowhere mentions the market value of the goods when new and the market value of the goods at the time of seizure. It" was submitted by the learned representative of the respondents that Annexure A to the Panchnama dated 15-6-80 (page 54 of the Paper Book) gives the market value of the goods at the time of seizure. We are unable to accept this as the market value for the purposes of Notification 84 of 75. There is nothing in this Panchnama to show that proper valuation was done, that any market enquiry was conducted or that the value is as per the law. The comparison of the values between those given in the Baggage Rules and in the Annexure A shows that no attempt has been made to establish that the provisions of Notification 84 of 75 have been contravened by the respondents.

9. We also note, as pleaded on behalf of the respondents, that the husband and wife travelled separately and brought goods separately. The Collector has not established as to which goods were brought by which party. He has not shown as to which goods were advertised. No statement has been recorded from the advertisers to show that the respondents advertised particular goods. Though the respondents admitted in their statements that they advertised the goods they have denied the same in their reply to the show cause notice. The absence of any other evidence for advertisement, therefore, weakens the case. In these circumstances, we are of the opinion that the Board was correct in holding that the Collector's orders were silent on some vital aspects. As discussed earlier, there is no 'correlation between the advertisement which has been denied and the goods seized.

10. We also considered whether there was any display. Such display had to be for sale and the Department had not succeeded in showing that any of the confiscated goods were displayed for sale. No statement has been recorded from any alleged customers. We do note that Panchnama dated 15-6-80 (prepared at the time of search at B-11 Greater Kailash Enclave) does mention that "as a result of search miscellaneous trade goods of foreign origin which were displayed in the said premises for sale...". This, however, does not help as there is no evidence from any independent source and the Panchnama does not itself explain how the Panchas came to the conclusion that there was display in the premises for sale.

11. In view of the circumstances, we are of the opinion that the Board was correct in passing their order dated 30-7-82. The appellants have not succeeded in proving that this order was wrong. For this reason, we dismiss the appeal of the Department.


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