1987 (6) TMI 195 - AT - Customs

Issues Involved:
1. Legality of the seizure under Section 110 of the Customs Act, 1962.
2. Burden of proof under Section 123 of the Customs Act, 1962.
3. Validity of the confiscation of goods under Section 111 of the Customs Act, 1962.
4. Imposition of penalty under Section 112 of the Customs Act, 1962.
5. Applicability of Notifications No. 204/84-Cus. and 205/84-Cus., dated 20-7-1984.

Detailed Analysis:

1. Legality of the Seizure under Section 110 of the Customs Act, 1962:
The appellant argued that the seizure was invalid as it was conducted without a reasonable belief that the goods were liable to confiscation, as required by Section 110. They contended that the officers seized goods of Indian origin and some goods based on mere suspicion, which negates the existence of a reasonable belief. The Tribunal noted that the seizure must comply with the mandatory provisions of Section 110, and any breach could invalidate the seizure.

2. Burden of Proof under Section 123 of the Customs Act, 1962:
The appellant contended that the burden of proof under Section 123 was wrongly placed on them. They argued that Section 123 applies only when there is a reasonable belief that the goods are smuggled. The appellant provided evidence that most goods were of Indian origin or lawfully acquired. The Tribunal emphasized that the initial onus of proving the smuggled nature of the goods lies with the Revenue, especially since video cassettes were not specified in Notification No. 204/84-Cus., which lists goods under Section 123.

3. Validity of the Confiscation of Goods under Section 111 of the Customs Act, 1962:
The Additional Collector had ordered the confiscation of various items under Section 111 for contravention of Section 3(1) of the Imports/Exports (Control) Act, 1947, read with Sections 11, 11C, 11D, 11E, and 11F of the Customs Act, 1962. The appellant argued that the goods were lawfully acquired and that the seized video cassettes were of Indian origin. The Tribunal found that the Revenue failed to provide evidence that the goods were smuggled, thus invalidating the confiscation order for many items. However, the Tribunal upheld the confiscation of certain items but reduced the fine in lieu of confiscation.

4. Imposition of Penalty under Section 112 of the Customs Act, 1962:
The Additional Collector imposed a penalty of Rs. 30,000 on the appellant. The appellant argued that no offense was committed and that there was no mens rea. The Tribunal agreed that the offense was technical and lacked mens rea. Consequently, the penalty was reduced to Rs. 5,000 to meet the ends of justice.

5. Applicability of Notifications No. 204/84-Cus. and 205/84-Cus., dated 20-7-1984:
The Tribunal examined the applicability of Notifications No. 204/84-Cus. and 205/84-Cus. Notification No. 204/84-Cus. issued under Section 123(2) did not include video cassettes, while Notification No. 205/84-Cus. issued under Section 11B did include them. The Tribunal concluded that the initial burden of proof remained with the Revenue, as video cassettes were not specified under Section 123. The Tribunal referenced the Allahabad High Court judgment in Ashok Kumar v. Collector of Central Excise and Customs, which supported their conclusion that the burden of proof lies with the Revenue.

Conclusion:
The Tribunal partly allowed the appeal, ordering the release of certain items upon payment of a reduced fine and reducing the penalty imposed on the appellant. The Tribunal emphasized the initial burden of proof on the Revenue and the technical nature of the appellant's offense.

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