2003 (11) TMI 379 - AT - Central Excise

Summary

Issues:
- Seizure of silk yarn of foreign origin
- Confiscation of goods under Customs Act, 1962
- Appeal against order-in-appeal
- Allegations of smuggling and confiscation
- Burden of proof on department
- Lack of evidence linking goods to illegal importation

Seizure of Silk Yarn of Foreign Origin:
Customs officers intercepted a vehicle containing silk yarn of foreign origin alongside Indian origin yarn. The foreign silk yarn was seized under Section 110 due to suspicions of smuggling, with the Indian yarn also confiscated for concealing contraband goods. The appellant was penalized, and the Indian goods were allowed redemption upon payment of a fine.

Confiscation of Goods under Customs Act, 1962:
The adjudication proceedings led to the absolute confiscation of the silk yarn of foreign origin and the Indian origin yarn due to involvement in concealing smuggled goods. Despite producing bills for the licit acquisition of the silk yarn, they were dismissed as an afterthought. The Maruti Van used for transportation was also seized.

Appeal Against Order-in-Appeal:
The Revenue appealed against the order-in-appeal by the Commissioner (Appeals), challenging the decision to set aside the original confiscation orders. The grounds of appeal included discrepancies in the production of documents and the lack of identification marks on the goods.

Allegations of Smuggling and Confiscation:
The show-cause notice alleged that the twisted silk yarn was made from smuggled silk yarn, not that the twisted yarn itself was smuggled. The judgment clarified that if the yarn underwent twisting in the country, the smuggling could not be attributed to the twisted yarn. The burden of proof lay on the department to establish the goods' liability for confiscation.

Burden of Proof on Department:
To confiscate goods of foreign origin, a reasonable belief of smuggling is required, which the department failed to establish. The lack of evidence linking the goods to illegal importation of untwisted silk yarn or the appellant with smuggling activities rendered the case against the appellant unsubstantiated.

Lack of Evidence Linking Goods to Illegal Importation:
The judgment upheld the order-in-appeal, rejecting the Revenue's appeal as lacking merit due to insufficient evidence linking the seized goods to illegal importation. Statements without tangible collateral evidence were deemed insufficient to incriminate the appellant.