9911796707
TMI Blog2013 (1) TMI 727X X X X Extracts X X X X X X X X Extracts X X X X ..... r, the appeals were listed for hearing on 17-4-2012, 27-6-2012, 4-9-2012, 6-11-2012 and finally today i.e. 10-1-2013. On none of these occasions, any one represented the petitioners despite notice. 2.1 Section 129B of the Customs Act, 1962, lays down the procedure to be followed by the Tribunal and reads as follows :- "SECTION 129B. Orders of Appellate Tribunal. - (1) The Appellate Tribunal may, after giving the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or annulling the decision or order appealed against or may refer the case back to the authority which passed such decision or order with such directions as the Appellate Tribunal may think fit, for a fresh adjudication or decision, as the case may be, after taking additional evidence, if necessary. (1A) The Appellate Tribunal may, if sufficient cause is shown, at any stage of hearing of an appeal, grant time to the parties or any of them and adjourn the hearing of the appeal for reasons to be recorded in writing : Provided that no such adjournment shall be granted more than three times to a party during hearing of the appeal." &emsp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom, show cause notices were issued to the owners of the goods asking them to explain as to why the goods in question should not be confiscated, duty demanded and penalties imposed. The Commissioner adjudicated the cases. The facts are almost identical. Each of the owners of the goods was asked to explain as to where they got the goods from. The fact that these goods are of foreign origin is not denied by anyone. The owners explained that they received the goods after they purchased them from various stockists/importers in Mumbai. The department thereupon contacted the stockists/importers and enquired with them whether they have sold the goods found in the appellants' premises. They, in their statements, recorded under Section 108, denied having sold the goods in question to the appellants. The Commissioner in the impugned orders mainly relied on the fact that the appellants could not explain the possession of the imported goods nor were they in a position to explain as to where they got the goods from nor were they in a position to say whether duty had been paid on the goods or not. To come to the conclusion that the goods are smuggled and therefore were liable to confiscation, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y pleaded that the goods in question were not notified under Section 123 or Chapter 4 of the Customs Act; the burden to prove that they are smuggled is on the department and it has not been discharged by it; the fact that the sellers of the goods have stated that the goods in question have not been sold by them does not establish that the goods are smuggled; that the goods had foreign markings on them does not imply that they are smuggled because they could have been legally imported into the country as well; that these goods are freely available in the market as there is no prohibition against their import at the relevant time; that the Commissioner's reliance on the D. Bhoormull's and Kanungo's cases is misplaced as no presumption is raised against the appellants by the department that the goods are of smuggled nature; that the appellants are under no obligation to retain Bills of Entry and other import documents permanently in respect of imported goods; that the department was trying to throw the burden cast on it on the appellants who were innocent traders in the impugned goods; that there is abundance of case law that in respect of non-notified goods to say that the burden to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Surana v. CC - 2004 (178) E.L.T. 987 the Tribunal held that burden has to be discharged with positive evidence and where no such evidence is available, the goods are not liable to confiscation. In the case of Vinod Arora v. Commissioner - 2004 (179) E.L.T. 353 it has been held that where the goods are neither notified under Section 123 nor under Chapter IVA, there is no requirement that records such as to possession, storage and sale of goods be maintained. Similar views have been held in Khulbhushan Jain v. Commissioner - 1999 (111) E.L.T. 906, Lakhpatrai & Sons v. Commissioner - 2004 (177) E.L.T. 934 and a host of other judgments. (d) The Tribunal failed to consider the aforesaid settled law on the subject as cited above and it was not open to the Tribunal to come to a different conclusion in the present matter. 7. The ld. Addl. Commissioner (AR) appearing for the Revenue reiterates the findings given in the adjudicating authority's order and the grounds averred in the reply to the writ petition which are summarized briefly as below :- (i) As regards the jurisdiction of the Customs Department at Mumbai, to adjudicate the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... place. Merely because of that fact, it cannot be said that the law should not take its course. An offender cannot be allowed to break the law and also enjoy the benefit of law. The Hon'ble High Court of Karnataka in the Ralectronics case [1994 (71) E.L.T. 26 (Kar.)] held that - "the power of investigation and collecting materials which may lead to further enquiry or adjudication is part of the machinery created by the law to prevent tax evasion. The machinery provisions in a fiscal legislation are to be liberally construed so as to effectuate the purpose behind the said machinery. Therefore, when the cause of action arises within the territorial jurisdiction of a particular officer, he is competent to have the matter investigated even in an area outside his jurisdiction. It is not a case of stretching the jurisdiction beyond his territory at all". The appellant has relied on the decision of the Tribunal in the case of Vikram Jain to argue that the Customs Officers in Bombay does not have jurisdiction to adjudicate the present case. However the said decision of the Tribunal was overruled by the Hon'ble Karnataka High Court in the same case reported in 2009 (244) E.L.T. 504 (Kar.) a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in these circumstances one has to consider whether the Revenue has discharged the burden of proof regarding the smuggled nature of the goods and whether the onus of proof has shifted to the appellants. In the Phoenix Mills Ltd. v. Union of India [2004 (168) E.L.T. 310] the Hon'ble High Court of Bombay explained the distinction between burden of proof and onus of proof in the following words. "The burden of proof lies upon the person who has to prove a fact and it never shifts, but the onus of proof shifts. Onus means the duty of adducing evidence." In the present case the foreign origin of the goods is evident on the markings found on the packages of the goods and the appellants themselves have admitted that the goods are of foreign origin in the statements recorded under Section 108 of the Customs Act. The appellants were asked about the source of procurement of the goods. The appellants gave details in this regard and when the same were verified, it was found that the said suppliers had not supplied the impugned goods. When the appellants were confronted with these facts, they were unable to give any satisfactory explanation nor any evidence by way of bills/challans indicating t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nravel every link of the process. Many facts relating to this illicit business remain in the special or peculiar knowledge of the persons concerned in it. On the principle underlying section 106 of the Evidence Act, the burden to establish those facts is cast on the person concerned; and if he fails to establish or explain those facts, an adverse inference of facts may arise against him, which coupled with the presumptive evidence adduced by the prosecution or the Department would rebut the initial presumption of innocence in favour of that person, and in the result prove him guilty. As pointed out by Best in 'Law of Evidence' [12th Edn. Article 320, page 291], the "presumption of innocence is, no doubt, presumptio juris : but everyday's practice shows that it may be successfully encountered by the presumption of guilt arising from the recent (unexplained) possession of stolen property," though the latter is only a presumption of fact. Thus the burden on the prosecution or the Department may be considerably lightened even by such presumption of fact arising in their favour. However, this does not mean that the special or peculiar knowledge of the person proceeded against will relie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for them to be confiscated under Section 111(d). In this case the allegation is that the goods have been removed without payment of customs duty and therefore, they are liable to confiscation under Section 111(d) of the said Customs Act. 9. The Commissioner has imposed various penalties on the persons from whose possession the goods had been seized under Section 112(b) of the Customs Act. It is now well established that mens rea is an important ingredient for imposing a penalty on the persons enumerated in Section 112(b) of the Customs Act. The goods may be liable to confiscation for contravention of the provisions of the Customs Act but the person who is in possession of the goods need not necessarily have anything to do with either smuggling or dealing with them knowingly. The evidence brought out by the department nowhere suggests that the appellants were aware that the goods in question were smuggled into the country. Their dealing in such goods, whose tainted nature they are unaware of, is not covered under Section 112(b) of the Customs Act. The penalties imposed on these persons, therefore, cannot be sustained while upholding confiscation of the goods. We, therefore, s ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
