TMI Blog1999 (3) TMI 204X X X X Extracts X X X X X X X X Extracts X X X X ..... t alleged that the said Fax machine, among others sold by M/s. MDCC to various parties, including the appellants, were not imported in a bona fide manner. SCN dated 24-6-1985 was issued to a number of noticees including the present appellants alleging that the appellants had dealt with smuggled goods which were liable to confiscation. Appellants were, therefore, called upon to show cause as to why the said Fax machine should not be confiscated absolutely and why penalty should not be imposed on them. In their reply to the SCN and during the personal hearing before the adjudicating authority appellants contended that they were bona fide purchasers of the said goods and since they were purchasers of the goods from a party in India as second purchasers and since they had paid the charges for the goods by cheque, the allegations of the appellants having dealt with smuggled goods were not applicable to them and there was no question of the goods being confiscated in the hands of the appellants or any penalty being imposed on them. The adjudicating authority, however, rejected the claim of the appellants and ordered confiscation of all the Fax machines sold by M/s. MDCC and imposed a red ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s from an Indian seller. In this connection, he relied on the Apex Court decision in Ambalal v. Union of India [1983 (13) E.L.T. 1321 (S.C.) = AIR 1961 SC 254]. It was further submitted that having regard to the fact that the appellants conduct was admittedly bona fide, no penal consequences should have been imposed upon them. Ld. Counsel relied on the Tribunal decision in Hindustan Steel v. State of Orissa [1978 (2) E.L.T. (J159) (S.C.) = AIR 1970 S.C. 253] and Merck Spares Delhi v. Collector of Central Excise and Customs, New Delhi [1983 E.L.T. 1261 (T)]. Further, merely because the action against the impugned goods was an action in rem, it did not mean that a person who had committed no offence can be made to suffer by payment of redemption fine. In support of this contention, he drew attention to Dolphin Laboratories, Calcutta v. Collector of Customs, Calcutta [1987 (29) E.L.T. 242]. There was no evidence to show that the appellants had knowledge or had reason to believe that the FAX machine was liable to confiscation under Section 111 and, therefore, any redemption fine in lieu of confiscation could not have been imposed [Karup Industries v. C.C.E. - 1990 (48) E.L.T. 271]. As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by Shri D.M. Parsad of MDCC in which Shri Parsad had given details of the raising of the bills by M/s. Sigma Enterprises. Shri Prasad had knowledge that there were no import documents relating to the SKD Fax machines testifying to the valid import of the SKD parts of the machines. Ld. JDR also reiterated the findings of the Collector in holding that since the Fax machines were highly restricted items during the relevant period and only some actual users were allowed to import such machines on a restricted basis, the claim of Shri D.M. Parsad that he was under the impression that M/s. Sigma from whom he was purchasing the machines were manufacturing/assembling the Fax machines out of SKD components could not be accepted as M/s. Sigma was itself a fictitious firm. Further, if the said machines had only been assembled in India, the name of the Indian manufacturer who assembled it would have been indicated. On the other hand, the correspondence seized from the premises of M/s. MDCC proved that the Japanese manufacturers of the Fax machines, namely, Canon, had not authorised any one in India at the relevant time to assemble the said SKD machines from components supplied by them. Though ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the conclusion drawn by the Collector that the Fax machines were smuggled goods is well founded. Further, none of these persons could also produce any documentary proof as to their duty paying character. It is no doubt true that the appellants, M/s. Blue Dart, had proved that they had no knowledge of the smuggled nature of the goods having regard to the fact that they had purchased the Fax machines from M/s. MDCC, an Indian firm on payment of the appropriate price by cheque. Appellants have contended that confiscation under Section 111 of the Customs Act is penal in nature and the principles laid down by the Supreme Court in Hindustan Steel Ltd. v. State of Orissa [1978 (2) E.L.T. (J 159) (S.C.) = AIR 1970 SC 253] would be applicable in such cases. We find that the above case relates to the failure of the appellant to take registration as dealer under the Orissa Sales Tax Act on a bona fide belief that they were not required to do so. In the said case the Apex Court had held that in the absence of contumacious conduct no penalty can be imposed just because penalty was imposable. In the instant case, the question relates to imposition of redemption fine where the goods have been c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Section 111. This position has been confirmed by the Supreme Court in Shewpujanrai Indrasenrai v. C.C. [1983 (13) E.L.T. 1305 (S.C.) = AIR 1958 SC 845 ] while construing the provisions of Section 167 (8) of the Sea Customs Act, 1878 corresponding to Section 111(d) of the present Act. Further, under Section 125(1) of the officer adjudging the confiscation is empowered to give the person from whose possession the goods have been seized an option `to pay in lieu of confiscation such find as the said officer thinks fit . Though it is true that both in the case of penalty and fine, it is the same person who is concerned with making the payment, it has to be borne in mind that in the case of penalty it is imposed directly on the person, while in the case of fine, it is on the goods. It follows that while mens rea may be relevant for purposes of penalty it is not required to be established in the case of fine. 6. We have therefore, no hesitation in holding that the demand of redemption fine of Rs. 1000/- in the case is legally sustainable. Further, in terms of Section 125(2), we also uphold the duty demand against the present appellants in terms of the Annexure to the impugned orde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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