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S.N. Sarkar and Abdul Latif Vs. Collector of Central Excise - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Delhi
Decided On
Reported in(1985)(22)ELT186TriDel
AppellantS.N. Sarkar and Abdul Latif
RespondentCollector of Central Excise
Excerpt:
.....of this discrepancy that the collector of central excise had chosen to disbelieve the claim of shri sarkar. but it is not disputed that shri sarkar was the consignor in respect of 30 out of the 52 bales seized. in the circumstances, the fact, that he had initially claimed to have consigned 21 bales only, would not be a circumstance against the truth of his contentions, if otherwise found acceptable. so far as shri latif is concerned, he claims two of the bales only.5. no doubt, it is contended for the appellants that the certificates obtained from the two persons referred to in the collector's order ought not to have been accepted, as the appellants were not given an opportunity to test the correctness of the contents of the said certificates. but when questioned as to whether the.....
Judgment:
1. These two appeals arise out of a common Adjudication Order and relate to common questions of fact and law, and are being disposed of under this common order.

2. On information the godown of M/s. Calcutta-Punjab Roadways in Tis Hazari, Delhi was searched and 52 bales of old garments made of synthetic fabrics of foreign origin were seized. The commission agent of the said firm was examined. Opinion was obtained from two persons as to the foreign origin of the goods, they were thereupon seized and further investigation carried out. The consignors were found to be various persons of Calcutta, the appellants being two of them. Notices were sent to them also. One, Shri Sulekh Chand made an application for release of the goods to his custody, but when notices were sent to him he did not respond. The various consignors, including these two appellants, claimed to have lawfully acquired these articles from various persons including persons who had purchased these goods through authorised auction sources. But the Collector of Central Excise, New Delhi disbelieved their claims and held that the goods being of foreign origin and there being no proof of lawful import thereof, they were liable for confiscation under Section l11(d) of the Customs Act, 1962 and accordingly ordered absolute confiscation thereof. But he imposed no penalties. It is against the said order dt. 3-6-1983 that these appeals have been preferred.

3. Shri Sekhar Mukhopadhyay, Advocate with Shri K. Chatterjee, Consultant, appeared for the appellants while the Respondent was represented by Shri M.L. Kapoor. It was argued for the appellant that no reliance should have been placed on the certificates obtained from two persons regarding the foreign origin of the goods and that in any event, the goods not being either notified under Section 123 of the Customs Act or covered by the provisions of Chapter IV-A of the said Act, and in the absence of any proof that they had been smuggled into India, the order for confiscation is bad in law. Shri Kapoor, on the other hand, contended that the foreign origin of the goods being established the Collector was justified in drawing the conclusions needed against the appellants and the order of confiscation is, therefore, proper.

4. No doubt, Shri S.N. Sarkar appears to have initially claimed that he was the consignor of 21 bales though he subsequently claimed that he had consigned 30 bales. It was mainly on the basis of this discrepancy that the Collector of Central Excise had chosen to disbelieve the claim of Shri Sarkar. But it is not disputed that Shri Sarkar was the consignor in respect of 30 out of the 52 bales seized. In the circumstances, the fact, that he had initially claimed to have consigned 21 bales only, would not be a circumstance against the truth of his contentions, if otherwise found acceptable. So far as Shri Latif is concerned, he claims two of the bales only.

5. No doubt, it is contended for the appellants that the certificates obtained from the two persons referred to in the Collector's order ought not to have been accepted, as the appellants were not given an opportunity to test the correctness of the contents of the said certificates. But when questioned as to whether the appellants had demanded an opportunity to cross-examine these two persons during the Adjudication proceedings, it was conceded that no such demand was, in fact, made. In the circumstances, the correctness of the contents of the two certificates need not be doubted. We may, in fact, further note that during the arguments in these appeals it was conceded for the appellants that most of the articles claimed by these two appellants did, in fact, bear labels indicating their foreign origin, and the fact that all of them are of foreign origin is not, in fact, a matter in dispute.

6. But it should be noted, as observed in the order of the Collector himself, that these goods are neither notified under Section 123 of the Customs Act nor covered by the provisions of the Chapter IV-A of the Act. In the circumstances, there can be no presumption whatever that these goods must have been smuggled into India. In that event, if they are to be made the subject matter of an order for confiscation, it should bo established by the Department that these goods had been as a fact smuggled into India. No doubt, if some acceptable evidence is adduced of the smuggled character of these goods the burden would then shift on the appellants to rebut the same. The Collector was also aware of this correct legal position as is seen from his order itself.

7. The Collector has observed that the fact, that the seized goods are imported and that such import is restricted or prohibited and that the seizure was effected on the basis of specific information would give rise to a presumption of the smuggled character of these goods. But such conclusion on the part of the Collector appears to us to be unjustified. In so far as the goods are admitted to be neither notified under Section 123 of the Customs Act nor covered by Chapter IV-A of the Act, the above circumstances alone would not justify a presumption as to their smuggled character. Therefore, the Collector was not justified in placing the burden on the appellants to prove the lawful origin of these goods in India.

8. Shri Sarkar had been always claiming that out of 30 bales claimed by him, a portion had been purchased by him from another person who had himself purchased these and other goods in auctions conducted by the Customs Department and the balance had been purchased from sundry Brokers and Hawkers piecemeal in Calcutta. Shri Latif had also contended that he had acquired these articles either through auctions held by the Port Trust, Calcutta, or other Customs auctions or by purchase from the general public. The contention for Shri S.N. Sarkar is that one Shri Gobind Lal Sarkar had purchased 80 bales of readymade garments, etc., in the Calcutta Customs auction and that Shri S.N.Sarkar had purchased 10 bales from Shri Gobind Lal Sarkar and the balance had been purchased from others. The awo appellants had referred to such purchases during the Adjudication proceedings also giving details of such purchases. But no investigation appears to have been done to verify the correctness of such claims. On the other hand, the Collector has disbelieved these claims mainly on the basis that while initially Shri S.N. Sarkar had claimed to have been the consignor of 21 bales, he later claimed to have consigned 30 bales and this change of stand would itself disprove his claim. He had, therefore, laid the burden on Shri Sarkar and also Shri Latif to prove that they had lawfully acquired the goods and that the goods were not smuggled. The reason suggested by the Collector for his above conclusion is not legally acceptable. It was for the Department to initially produce proof to at least prima facie establish the smuggled character of the goods and in the absence of any enquiry on this matter the Department had failed to establish any such prima facie case. In the circumstances, it was really not necessary for either of the appellants to positively prove that the goods had not been smuggled into India. As pointed out for them such goods are freely sold in the auctions held by the Calcutta Port Authorities or by the Customs Authorities. They are thereafter freely sold in the market place also. In the circumstances, there is no ground to presume that these goods must have been smuggled into India, thereby shifting the burden on the appellants to prove that they had not been so smuggled but had been lawfully acquired.

9. Therefore, in the absence of any proof to indicate that the goods claimed by the appellants were not legally imported, the appellants are entitled to the release of the goods as claimed by them.

10. In the result, the order of the Collector, so far as it relates to the 30 bales claimed by Shri S.N. Sarkar and 2 bales claimed by Shri Latiff, is set aside and the order of confiscation with reference to these bales set aside. The appeals are allowed on the above terms.


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