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B.K. Krishnani Vs. Collector of Customs and Central - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Delhi
Decided On
Reported in(1983)LC1486DTri(Delhi)
AppellantB.K. Krishnani
RespondentCollector of Customs and Central
Excerpt:
.....for over a year.7. on behalf of the department, shri nair submitted that mere possession of the goods for a period of one year was not sufficient, as the relevant rule places equal emphasis on the use of the article abroad. when it was pointed out to him that neither the assistant collector nor the appellate collector had indicated the exact features which made them conclude that the two articles had not been used, shri nair submitted that it would be very difficult to give detailed reasons for coming to such a conclusion. however, by examination of an article, one could form an overall impression as to whether it had been used or not. he submitted that the lower authorities had used their judgment properly in this regard and that if deemed fit we might also examine the articles and.....
Judgment:
1. This is a revision application (hereinafter called "appeal") filed before the Central Government which under Section 131 B of the Customs Act 1962, stands transferred to this Tribunal to be disposed of as if it were an appeal presented before the Tribunal.

2. The facts of this case are comparatively simple, but it raises some general questions of practice and interpretation and we are accordingly dealing with this case in some detail.

3. The case turns on the interpretation and application of certain provisions in Rule 2 of the Transfer of Residence Rules, 1978. For facility of reference, this said Rule 2 is reproduced below : - "Subject to the provisions of the Baggage (Conditions of Exemption) Rules, 1976 and rule 3 of these rules the personal and household effects, of a person on a bona fide transfer of residence to India, shall be exempted from duty subject to the following conditions, namely :- (a) such person has been residing abroad for a minimum period of two years immediately preceding the transfer of residence and is transferring his residence to India for a minimum of stay of one year; (b) such person affirms by a declaration that the goods have been in his or his family's possession and use abroad for a minimum period of one year and the examination of the goods and the attendant circumstances do not indicate to the contrary ; (c) the goods not accompanying the passenger were shipped or despatched or arrived within the time limits specified in the Baggage Rules, 1978." 4. In applying these Rules in the case of any passenger coming to India on transfer of residence, a difficulty frequently arises with reference to condition (b) in the above Rule, relating to the possession and use abroad of the goods for which exemption is claimed. It is frequently held, either on the basis of examination of the goods or on considering the attendant circumstances, that the goods were not in the possession of the person for a minimum period of one year ; or that, even if they were in his possession an examination of the goods does not indicate that they were actually used by him during that period. Accordingly, such a person is denied the benefit of the exemption under the Transfer of Residence Rules and the goods in question are subjected to duty. If the person is aggrieved with the order, as often happens, the matter is taken up in appeal, where again the process of examination of the goods and consideration of the attendant circumstances is repeated. If the decision here also is against him, a revision application or second appeal may follow, with a further examination of the goods and consideration of the attendant circumstances by the revisional authority.

5. In the present case, Shri Kishnani, who was employed as a Personal Assistant in the Embassy of India, Berne, was transferring his residence to India after staying abroad for over six years. While a number of articles brought by him were allowed the benefit of the Transfer of Residence Rules, this was denied in respect of a Mini-refrigerator, a Panasonic Video Cassette Recorder (VCR) and a Philips Colour TV set. So far as the last item is concerned, it was given the benefit of the concession at the appeal stage and need not be further referred to. As regards the remaining two items, the Mini-refrigerator was denied the benefit on the basis of examination by the Assistant Collector (Air Customs), Delhi Airport who held that it did not show any signs of use. As regards the VCR, it was again observed that it did not bear signs of use for one year. At the appeal stage, the Appellate Collector inspected the articles in the presence of the appellant and his counsel. He has recorded that the VCR and the Refrigerator were new and did not satisfy the criterion of use under Rule 2(b). He, therefore, rejected the appeal in regard to these two articles. It is against this decision that Shri Kishnani has come up in appeal to the Tribunal.

6. When the appeal came up for hearing, Shri Krishani argued his own case. He submitted various items of documentary evidence to show that the two articles had been in his possession for over one year. He contended that there had been no "proper" examination of these articles by the Assistant Collector and by the Appellate Collector. He invited us to examine the goods or, preferably, to get them examined by an "expert", which according to him would establish his contention that they had been in use for over a year.

7. On behalf of the Department, Shri Nair submitted that mere possession of the goods for a period of one year was not sufficient, as the relevant Rule places equal emphasis on the use of the article abroad. When it was pointed out to him that neither the Assistant Collector nor the Appellate Collector had indicated the exact features which made them conclude that the two articles had not been used, Shri Nair submitted that it would be very difficult to give detailed reasons for coming to such a conclusion. However, by examination of an article, one could form an overall impression as to whether it had been used or not. He submitted that the lower authorities had used their judgment properly in this regard and that if deemed fit we might also examine the articles and come to our own conclusion in the matter. For reasons which follow, we have not considered it necessary to examine the articles.

8. In the first place, we would observe that the claim for the benefit of the Transfer of Residence concession in respect of these two articles was denied basically on the ground that they were not found on inspection to have been in use for a year. The appellant's claim that they were in his possession for the required period of one year has not been controverted.

9. We have considered very carefully what should be a reasonable interpretation and method of application of the condition (b) in the above-mentioned Rule 2, particularly in a case where there is no dispute, that the goods have been in the passenger's possession, but a doubt is felt whether he has used them. If great stress is laid on the question of use, it is bound to lead to considerable difficulty both to passengers and to the administrative and quasi-judicial authorities.

For instance, in the present case, the goods were examined by the Assistant Collector and by the Appellate Collector and since neither of them accepted the appellant's claim, he has invited us to examine them.

We would hesitate to say that we are more expert in detecting the degree of use of an article than an Appellate Collector or an Assistant Collector who has to see such articles every day in the course of his duties. Shri Kishnani has also made the interesting statement, "I have viewed about 140 movies on the VCR and I am sure if an electronics engineer is asked to test this statement he would be able to satisfy the Tribunal that my contention is correct". We wonder which electronics engineer would be able even after the most intensive examination of a VCR, to say that it has been used for viewing 140 movies. Even if we do not accept this extreme proposition, it would still be somewhat impracticable to bring in experts in used VCR's, or experts in the examination of used articles, to give an expert opinion as to whether an article has or has not been used for a period of one year.

10. According to our understanding, the logic behind the Transfer of Residence concession is that a person who has been maintaining an establishment abroad would have acquired a number of articles commensurate with his status and with the availability and prices of goods in the country in which he is living, so as to provide himself with the necessities and some of the comforts of life. When such a person has to transfer his residence and return to India, it is considered reasonable that he should not be asked to discard the household and personal effects which have been in his use, or sell them (which might only be at throw-away prices), but should be allowed to bring them back to India. In order that a reasonable provision of this nature might not be misused by unscrupulous persons to bring in large quantities of new articles, perhaps with a view to their sale, a guideline has rightly been prescribed that the articles should have been in the person's or his family's possession and use for a reasonable minimum period of one year. While this policy and the guideline are basically reasonable, they have also to be interpreted in a reasonable way. To us it appears reasonable that if possession of an article for the minimum period is established or accepted, use of the article during that period can normally be presumed. If a person has had an article like a VCR or a refrigerator in his possession, it is normally unlikely that he would not have made use of such articles (there are some exceptions to such a presumption ; these will be commented upon later). Whether the article has been used sparingly or continuosly, can hardly be a reasonable ground for distinguishing one case from another in the matter of allowing the concession. It would be paradoxical if a careful owner who keeps his property in very good condition is penalised vis-a-vis a careless person who treats his property roughly, or an unscrupulous person who deliberately imprints "signs of use" on his (perhaps new) articles. But such fine distinctions and untenable discriminations are bound to follow if the criterion of use (over and above that of possession) is raised to a fetish.

11. Exceptions, where despite a clear indication of possession, there is an equally clear indication that the goods have not been used, could no doubt exist. The following are some hypothetical examples : - (i) Where the article in question could not possibly have been used in the place where it is said to have been used : for instance, electrical articles working at 220 volts in a country where the electric supply is at 110 volts ; (ii) where the article could not have been used in view of some other reason : for instance, a TV set which is claimed to have been used in a place which is totally out of the range of any TV transmission (if in these days such a place does exist) ; (iii) where the person who claims to have used the article could not conceivably have used it: for example, a heavily handicapped person who claims to have used a racing bicycle ; and (iv) where a person is so foolish as to bring an article in its original packing which has evidently not been opened at all.

Barring such extreme cases, we are of the view that satisfactory.possession or use of the article for the prescribed minimum period should ordinarily be considered as very strong evidence of the article during that period, and in such a situation an article should not be denied the benefit of the Transfer of Residence concession on the basis that it "looks new" or "does not show any signs of use".

12. For the above reasons we do not consider it necessary in the present case to examine the disputed goods. On the evidence produced, we consider that Shri Kishnani is entitled to the benefit of the Transfer of Residence concession in respect of these two articles. We accordingly allow the appeal.

Corrigendum to Order No. 162/1983-C, dated, 22nd April 1983 passed by the Customs, Excise and Gold (Control) Appellate Tribunal (Special Bench 'C') on Appeal No. CD(SB) (T) A. No. 94/83A.In exercise of the powers conferred by Sub-section 35C(2) of the Central Excises and Salt Act, 1944, the Tribunal hereby makes the following amendment in the aforesaid Order :- In the last sentence in paragraph 11 of the Order, for the words "Barring such extreme cases, we are of the view that satisfactory possession or use of the article" the following words shall be substituted : - "Barring such extreme cases, we are of the view that satisfactory evidence of possession of the article".

SD/- SD/- SD/-(A.J.F. D'Souza) (S.D. Jha) (S. Venkatesan)Member (Technical) Member (Judicial) Senior Vice-President 27-6-83 27-6-83 27-6-83


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