TMI Blog2020 (11) TMI 590X X X X Extracts X X X X X X X X Extracts X X X X ..... atches, and have claimed that the smart watches under seizure are part of this consignment. However when asked to establish the correlation between the goods imported under said bill of entry and the seized goods, appellant failed to establish the same. Appellants have not shown at any time that these statements had been retracted by him at any time. The letter of Advocate to which the Appellant Counsel have referred is dated much before these two statements and cannot be said to be a retraction of the statements made subsequently. In absence of any retraction we find these statements as reliable pieces of evidence wherein the appellants have themselves been asked to establish correlation between the Bill of Entry produced by them and the goods seized have failed to establish any such correlation and have admitted that such correlation cannot be established - In the absence of any evidence to show that these smart watches have been licitly imported into India, and in view of the Section 123 of Customs Act, 1962, these 5543 smart watches have been illicitly imported and are liable for confiscation under Section 111 of the Customs Act, 1962 as has been held by the Commissioner. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4370 mobile back covers are smuggled goods under Section 2(39) and section 2(33) of the Customs Act, 1962; 2. I hold that 16 Chopard brand watches, 63 Ulysse Nardin brand watches, 33 Rolex brand watches, 18 Guess brand watches are liable to confiscation under Section 111(f), (h), (i), (j) and (m) of the Customs Act, 1962; 3. I hold that the seized 258 Counterfeit of Tissot brand watches, 17 Counterfeit of Rado brand watches, 28 Counterfeit of Armani brand watches, 305 Counterfeit of Calvin Klein brand watches, 48 Counterfeit of Michael Kors brand watches, 39 Counterfeit of Swarovski watches, 163 Counterfeit of Longines brand watches are liable for absolute confiscation under Section 111(d), (f), (h), (i), (i) and (m) of the Customs Act, 1962 read with Rule 6 of the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 further read with Section 11 of the Customs Act, 1962; 4. I hold that the seized 5543 smart watches are liable to confiscation under Section 111(d), (f), (h), (i), (j) and (m) of the Customs Act, 1962 read with Rule 3 of the Information Technology Goods (Requirements for Compulsory Registration) Order, 2012; 5. I hold that 8 V8 Sti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rson(s) come forward to claim ownership of these mobile covers; 11. I determine and confirm the demand of evaded amounts of chargeable and payable customs duty of ₹ 2,21,62,347/- (Rupees two crore twenty one lakh sixty two thousand three hundred forty seven only) under Section 28(8) of the Customs Act, 1962 and such person(s), who make a claim of ownership to these seized goods to pay the same forthwith; 12. I also determine and order payment of interest, at the applicable rates, on the determined and confirmed demand of customs duty of ₹ 2,21,62,347/ (Rupees two crore twenty one lakh sixty two thousand three hundred forty seven only), in terms of Section 28(10) read with Section 28AA of the Customs Act, 1962; 13. I impose a penalty equal to the determined amounts of payable customs duty of ₹ 2,21,62,347/- (Rupees two crore twenty one lakh sixty two thousand three hundred forty seven only) plus determined amounts of payable interest under Section 28(10) and Section 28AA of the Customs Act, 1962 upon such person(s), who come forward to make a claim to these seized goods, under Section 114A of the Customs Act, 1962; 14. I impose a penalty of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S No Description CTSH No Assessable Value Custom Duty Payable 1 Chopard Watches Brand 91011100 16 11318208 4762702 2 Ulysse Nardin brand watches 91011100 63 15966720 6718796 3 Rolex watches brand 91011100 33 22367400 9412202 4 Guess watches brand 91011100 18 78480 33024 5 Counterfeit Tissot watches of brand 91011100 258 98040 41255 6 Counterfeit of Rado brand watches 91011100 17 6800 2861 7 Counterfeit Armani watches of brand 91011100 28 896 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive of the courier company recorded under Section 108. Since, the investigation in this case could not lead to identification of the person(s), who were involved in the smuggling of the seized goods and no person had come forward to make a legal and valid claim of ownership of the seized goods, the subject notice, in omnibus, called upon those person(s), who come forward to claim the ownership of the seized goods to show their cause as to why - ➢ The 858 pieces of counterfeit of the foreign brand watches, having transaction value of ₹ 2,97,940 and present market value of ₹ 7,44,850/- be not absolutely confiscated under Section 111(d), (f), (h), (i), (i) and (m) of the Customs Act, 1962 read with Rule 6 and 11 of the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007; ➢ The seized 130 pieces of foreign brand watches, having transaction value of ₹ 4,97,30,808/- and present market value of ₹ 12,43,27,020/-; 5543 pieces of smart watches, having transaction value of ₹ 23,25,843/- and present market value of ₹ 58,14,607/-; 16 pieces of V8 Stick Kit e-cigarettes, having transaction value of ₹ 49,920/- and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t at all. In the cases of Aakash Enterprises [2006 (205) ELT (Bom.) and Lakhpatri [2016 (343) ELT 78 (Del.)] the Hon ble High Courts of Bombay and Delhi have held that the burden of proving smuggled nature of non-notified goods is entirely on the department. ➢ The watches were seized on 05.04.2018 along with other goods in a tempo. In Advocate s letter dated 25.05.2018 , the following facts were placed on record: The Appellant had taken original Bill of Entry No.3140294 dated 7.09.2017, filed at Chennai for import of 20,000 smart watches to the Marine and Preventive office at Marine Lines. However instead of releasing the watches, signature of the Appellant was taken on certain statements. Panchnama of seizure was not supplied. The import value was ₹ 244 per piece. The total market value was about ₹ 13 lakhs for all the watches under seizure. Copies of the Bill of Entry Invoice were once again placed on record. ○ The watches were depreciating and deteriorating and it was prayed that they should be released at the earliest. ➢ Admittedly and undisputedly, this letter was never rebutted by the department. If the clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e worth ascertaining the value which these watches fetched for the department. ➢ In para 8 of the order, value is determined under Rule 9 of CVR, 2007 by taking 40% of market value from E- commerce website Flipkart. The market value is ₹ 58,14,607/- and the transaction value is ₹ 23,25,843/-. Both are exaggerated, inflated and illusory. NIDB data is deliberately suppressed as if smart watches have never been cleared by Customs. In his reply to the SCN the Appellant inter alia submitted that the smart watches were available at Snapdeal for ₹ 649/- per piece. (Print out at Page 97). Currently such smart watches are sold by Flipkart at ₹ 503/- per piece. 3.3 Arguing for revenue learned Authorized Representative while reiterating the findings recorded in the impugned order submits that:- ➢ Watches are specifically covered by Section 123 of the Custom Act, 1962. Smart watches are watches and hence the burden to prove legal acquisition of the smart watches of foreign origin will rest on the appellant; ➢ The goods were detained and seized from the tempo, and undisputedly the appellant was present in the tempo along with the dr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the owner or the contents of the packages. After getting a consent letter from Baboothmull, the officers opened the packages which contained these articles of the total value of ₹ 12,255/-. 1. Parker Fountain Pens (19 Made in Canada) 28 Doz ₹ 3,360 2. Master hair clippers (Made in Germany) 5 Doz ₹ 600 3. Oster Hair Clippers (Made in Germany) 3-1/2 Doz ₹ 400 4. Venus pencils (Made in England) 760 Doz ₹ 2,250 5. K. 55 Out thread razors (Made in Germany) 68 Doz ₹ 4,080 6. Nylon buttons (Made in Japan) 47 Gross ₹ 705 7. Gillette Razor Blades (Made in England) 1000 PCs ₹ 120 8. 7 O'clock Razor sets (Made in England) 12 Doz ₹ 730 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to seizure or confiscation. This was followed by another letter dated September 14, 1962 from M/s. Gagrat Co., addressed to the Assistant Collector of Customs wherein the request for supply of the necessary information, was reiterated. The importation of goods shown as items 1, 4 and 7 had been prohibited since December 1957 and of those at items 2, 3, 5, 6 and 8 since March 1960, save under a licence issued by the Import Trade Control Authorities under s. 19 of the Sea Customs Act read with s. 3(1) of the Imports and Exports Control Act, 1947. The Assistant Collector of Customs on October 26, 1962 issued a notice to Bhoormull through his solicitors, M/s. Gagrat Co., Bombay requiring him to produce evidence of bona fide acquisition of the goods in question failing which to show cause within a week as to why those goods valued at ₹ 12,255/- be not confiscated under S. 167(8) of the Sea Customs Act read with s. 3(2) Imports and Exports Control Act, 1947. It was added that in case no reply was received within the specified period the case would be decided ex- parte on the basis of the facts already on record without further reference to him. In reply, a lette ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lector held that such burden prima facie stood discharged as the circumstances of this case irresistibly led to the conclusion that the goods had been illicitly imported. The main circumstances, taken into account by the Collector, in raising such an inference, may be arranged as under : (i) The import of such goods has been totally prohibited since 1957 except in the case of hair clippers and Venus Pencils, which were allowed on a highly restricted quota basis till October 1959/March 1966, Policy period', 'when their import too was banned; (ii) The highly suspicious circumstances of the seizure and the dubious conduct of the parties in relation thereto (a) There is large number of goods, all of foreign origin, worth over Rs .12,000/-, were found fully packed and ready for despatch. (b) Baboothmull from whose possession they were seized gave conflicting and evasive explanations in regard thereto. At the time of seizure on June 4, 1962, he disclaimed all knowledge about the ownership and contents of those packages, and said they were left outside the shop by a broker whom he, could not identify. Some days later, he , appeared in the arena (garb ?) of an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Schedule, is enforced against the goods irrespective of whether the offender is known unknown. But, imposition of the other kind of penalty, under the second part of the entry in column 3, is one in personam; such a penalty can be levied only on the person concerned in any offence described in column I of the Clause. Goods found to be smuggled can, therefore, be confiscated without proceeding against any person and without ascertaining who is their real owner or who was actually concerned in their illicit import. Section 168 empowers an officer of the Customs or anti- smuggling staff to seize any thing liable to confiscation. Section 178(A) provides for burden of proof. It says (1) Where any goods to which the section applies are seized under this Act in the reasonable belief that they are smuggled goods, the burden of proving that. they are not smuggled goods shall be on the person from whose possession the goods were seized; (2) This section shall apply to gold, gold manufactures, diamonds and other precious stones, cigarettes and cosmetics and any other goods which the Central Government may, by notification in the Official Gazette, specify in this behalf, (3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rks, we now advert to the con- tentions canvassed before us. Similarly worded provisions which are pari materia with above referred provisions of Sea Custom Act, exist in Custom Act, 1962, in form of Section 108, 110, 111, and 112 and 123. 4.4 While considering the similar arguments advanced in the case of Bhurmal referred above, which was having similar or identical facts, Hon ble Apex Court has laid down the law clearly stating as follows: Mr. Sanghi, learned Counsel for the appellants, has advanced these arguments- (a) Bhoormull had no locus standi to invoke the extraordinary jurisdiction of the High Court under Article 226 of the Constitution because there was not even prima facie evidence to show that at the time of seizure, he was in ownership or juridical possession of the goods; (b) The onus of proving the goods to be smuggled goods that initially lay on the Department, stood sufficiently discharged by the inevitable inference arising out of the totality of the circumstances in this case, which were appraised by the Collector in the light of the conduct of Baboothmull and Bhoormull, who, gave conflicting and incredible explanations as to how they had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s emphasised that in the present case, no evidence whatsoever was produced by the Department to show that the goods in question were smuggled goods. The Collector's order-proceeds are the argument-calling upon Bhoormull to prove that he had purchased these goods in the normal course of business was contrary to the law laid down by this Court in Amba Lal v. Union of India[(1961) 1, S.C.R. 933] Reference has also been made to several decisions of the High Courts, but most of them turn on their own facts and do not elucidate the principle beyond what was laid down in Amba Lal's case (supra) It cannot be disputed that in, proceeding for imposing penalties. under Clause (8) of S.167 to which S. 178-A-does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to. the contrary. But in appreciating its scope And the nature of the onus. cast by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 relieve the prosecution or the Department altogether of the burden of producing some evidence in respect of that fact in issue. It will only alleviate that burden to discharge which very slight evidence may suffice. Another point to be noted is that the incidence, extent and nature of the burden of proof for proceedings for confiscation under the first part of the entry in the 3rd column of Clause (8) of s. 167, may not be the same as in proceedings when the imposition of the other kind of penalty under the second part of the entry is contemplated. We have already alluded to this aspect of the matter. It will be sufficient to reiterate that the penalty of confiscation is a penalty in rem which is enforced against the goods and the second kind of penalty is one in personam which is enforced against the person concerned in the smuggling of the goods. In the case of the former, therefore, it is not nec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne. Whatever cryptic information was given by him, was also conflicting. Despite two show-cause notices, Bhoormull intransigently refused to disclose any further information. Apart from making a bare claim, he did not furnish evidence of his ownership or even juridical possession of the goods. The totality of these circumstances reinforced by the inferences arising from the conduct of Baboothmull and Bhoormull could reasonably and judicially lead one to conclude that these goods had been illicitly imported into Madras, a sea port. Even if the Division Bench of the High Court felt that this circumstantial evidence was not adequate enough to establish the smuggled character of the goods, beyond doubt, then also, in our opinion, that was not a good ground to justify interference, with the Collector's order in the exercise of the writ jurisdiction under Art. 226 of the Constitution. The function of weighing the evidence or considering its sufficiency was the business of the Collector or the appellate authority which was the final tribunal of fact. For weighing evidence and drawing inferences from it , said Birch J. in R. Madhub Chander [(1874) 21, W.R. Cr. 13, at 19] there can be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ein, the appellant was a firm carrying on business, as dealer, importer and repairer of watches. On a search of the firm's premises on October 17, 1959, the Customs authorities seized 390 watches out of which 250 were con- fiscated on the ground that they had been illicitly imported into India. The firm's petition under Article 226 of the Constitution was. allowed by a learned single Judge of the High Court and the order of confiscation was quashed on the ground that the customs authorities had failed to prove illicit importation of the watches. On appeal, by the Department, the Division Bench of the High Court reversed the decision of the single Judge with these observations The watches were seized from the possession of the respondent No. 1 (appellant) who had not obtained a licence or a customs clearance permit for importation of the same. They were of foreign make and. must have been imported across the. customs frontier. The explanations offered by the Respondent regarding its coming, Into possession of, the same between 1956 and 1957 were found. upon enquiries by the customs authorities, to be false, the result of these enquiries were communicated to the Respondent N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t arose out of the tell-tale circumstances in which the goods were found, regarding their being smuggled goods, by disclosing facts within his special knowledge. Amba Lal's case (supra) strongly relied upon by Mr. Ramamurthi, is clearly distinguishable on facts. There, Amba Lal was originally a resident of Pakistan. He migrated into India on the partition of the Indian Sub-continent before March 1948 when the customs barrier between India and Pakistan was raised for the first time. The Department did not lead any evidence, circumstantial or direct, that the goods seized from Amba Lal had been illicitly imported. Amba Lal gave plausible explanation that he had brought those goods along with him in 1947, when there were no restrictions on their importation. The Department however, tried to take advantage of certain alleged discrepancies in the statements of Amba Lal which were recorded in English. Amba Lal did not know English. He was not supplied with copies of those statements, nor allowed to inspect them. This Court, therefore, held that the Department was not entitled to rely on those discrepancies. Quoting from Shambhu Nath Mehra v. State of Ajmer [(1956) S.C.R. 199] th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ught to be proved. .Amba Lal's case was a case of no evidence. The oily circumstantial evidence viz., the conduct of Amba Lal in making conflicting statements, could not be taken into account because he was never given an opportunity to explain the alleged discrepancies. The status of Amba Lal viz. that he was an immigrant from Pakistan and had come to India in 1947 before the customs barrier was raised bringing along with him the goods in question, had greatly strengthened the initial presumption of innocence in his favour. Amba Lal's case thus stands on its own facts. The present case is in line with the decisions in Issardas Daulatram v. Union of India and. M/s. Kanungo Co. v. Collector of, Customs (supra). 4.5 Section 123 of Custom Act, 1962 reads as follows: SECTION 123. Burden of proof in certain cases. 1. Where any goods to which this section applies are seized under this Act in the reasonable belief that they are smuggled goods, the burden of proving that they are not smuggled goods shall be - a. in a case where such seizure is made from the possession of any person, - i. on the person from whose possession the goods were seized; an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the term watches . Watches are classified under CTH 9101. Smart Watches are classified under CTH 8517. Smart watches have a completely different and distinct identity from watches. Unlike watches, smart watches do not contain any watch movements. We are not in position to agree with above contentions of the learned counsel, for the reason that issue for consideration in the present case is vis a vis the applicability of Section 123 to the smart watches and not the question of determination of correct classification as per Harmonized System or the Customs Tariff Act, or the admissibility of benefit under Notification No 57/2017-Cus. Admittedly the items under seizure are having a watch module which is for displaying the time. In our view the essential character of the item under consideration is that of a watch and is bought and sold as a watch in the trade. Just because certain other functions are inscribed in the said device it will not essentially go beyond the meaning of word watch as used in section 123. Smart watch has been described at https://www.ebuyer.com/blog/2015/06/what-does-a- smartwatch-do/ stating as follows: Traditional timepieces just seem so outda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed: i. Bill of Entry number 3140294 dated 07.09.2018 for the import of smart watches ii. Customs examination dated 16.10.2017 issued by AAI Cargo Logistic and Allied Services Company Limited iii. Airway Bill No. 160-87836641 by Cathay Pacific Airway iv. Packaging List for the invoice No. MAA0905 v. Commercial Invoice Number MAA0905 dated 2017.09.05 issued by Zoe Win International Group Co. Limited vi. E-Payment transaction status receipt for the payment of 10,53,119/-. Q. in your statement dated 05th April, 2018, you had claimed duplicate branded watches contained in 07 cartons. What you have to say? Ans. I had claimed duplicate watches on the basis of my brother's information, who had said that I had to be at CST for the watches on 5th April, 2018. I thought that all the cartons containing watches belongs to me. However, I could not contact my brother for the next few days as he resides in China. Also, this was my first experience with the customs officials and I was misguided by my fellow trade men that I shall run as I had claimed the import of smuggled copy of duplicate copy of branded watches. When I contacted him on next week, he in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T. I could not visit Chennai this time as I had some family problem. I call my brother to arrange the transportation of the same. I shall provide you the ledger copy of the smart 20,000 smart watches tomorrow. Q. How you pay to Shri Shiva? Ans. No, he is my friend and did not charge any money for storing the balance smart watches contained in 10 cartons. Q. Is he your business partner? Ans. No, he is not my business partner. Q. How you have paid to the contractor in Train? Ans. i have paid them in cash. Q. How you have paid Sun Cargo? Ans. I have not paid any amount to Sun Cargo, as I have not received my goods till date. Q. Who had booked goods for transportation via train to Mumbai? Ans. Shri Shiva. Q. How he had transported the goods this time? Ans. He has also approached the railway contractor to book the courier in the same way how I used to booked in earlier cases. Q. If Shri Shiva had booked the courier, why did you not contacted Shri Shiva to clarify next day? Ans. I asked him why there is copy of duplicate branded watches in my cartons but he said that he had not opened the cartons so he was not aware ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur statement dated 05.04.2018 19.06.2018. What you have to say? Ans. I have gone through the statement dated 05.04.2018 19.06.2018 and I have placed my dated signature of having seen and deposed by me on the respective dates. I find that I had claimed smart watches and wrist watches contained in 10 cartons and 07 cartons but had not claimed goods contained in other cartons on 05.04.2018. I had only claimed only smart watches on 19.06.2018 and had not claimed other items viz. wrist watches, V8 stick kit mobile back covers on 19.06.2018. Q. It is seen that you have engaged a lawyer to represent your case who have himself confirmed (attested by you) that 17 cartons containing watches detained by this office on 05.04.2018 belongs to M/s Jstar Mobile Accessories Private Limited. What you have to say? Ans. I don't have anything to say on that part. Q. You have deposed in your statement dated 05.04.2018 that 10 cartons of smart watch 07 cartons of wrist watch belongs to you. The reply of your authorized representative confirms the same thing that 17 cartons belongs to M/s Jstar Mobile Accessories Pvt. Ltd. What you have to say? Ans. I admit that in my ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Please go through the Customs Duty payment details produced by you. What you have to say? Ans. I have gone through the extract of payment details as available in the ICEGATE. As the commercial invoice does not give details of IMEI number of 20,000 smart watches, I cannot substantiate my claim that the customs duty payment details is in respect of 5543 smart watches. Q. Please go through the Airway Bill No. 160-87836641 issued by Cathay Pacific Airway produced by you in support of your claim of 5543 smart watches detained by this office on 05.04.2018. What you have to say? Ans. I have gone through the Airway Bill. As commercial invoice issued by Zoewin International Group Co. Limited has no mention of individual IMEI number, I cannot substantiate my claim that the Airway Bill pertains to the 5543 detained smart watches, Q. Please go through the Foreign Bills transaction advice transacted produced by you. What you have to say? Ans. As the of Bill of Entry no. 3140294 dated 07.09.2017 is in respect of 20,000 smart watches and in absence of any details of IMEI number on the commercial invoice, I cannot substantiate my claim that the 5543 smart watches is the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same. Q. As per the Sales ledger produced by you for the Smart Watch it is seen that you have left with 5656 smart watches. Do you have any details of IMEI number of those 5543 smart watches? Ans. No. Q. Can you co relate the 5543 smart watches detained by this office in any other mean with 20000 smart watches imported under Bill of Entry no. 3140294 dated 07.09.2017? Ans. No. Q. Can you claim on the basis of Bill of Entry no. 3140294 dated 07.09.2017, Commercial invoices produced by you and in absence of any documents in relation to storage of goods in Chennai transportation from the place of import i.e. Chennai to Mumbai? Do you have any other supportive documents for your claim of 5543 smart watches detained by this office? Ans. No. Q. It is seen that other than smart watch, the said tempo was loaded with wrist watches of various brand, V8 stick kit mobile backs covers. It is seen that some of the brands of wrist watches has been found to be counterfeit. What you have to say? Ans. I know that the selling/ possessing and dealing in the counterfeit items prohibited item is an offense. Q. Do you have any documents to in relation to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. Detection and confiscation of the smuggled goods are aimed to check the escapement and avoidance of customs duty and to prevent perpetration thereof. In an appropriate case when the authority thought it expedient to have the contraveners prosecuted under Section 135 etc., a separate procedure of filing a complaint has been provided under the Act. By necessary implication, resort to the investigation under Chapter XII of the Code stands excluded unless during the course of the same transaction, the offences punishable under the IPC, like Section 120-B etc., are involved. Generally, the evidence in support of the violation of the provisions of the Act consists in the statement given or recorded under Section 108, the recovery panchnama (mediator's report) and the oral evidence of the witnesses in proof of the offences committed under the Act has consistently been adopting the consideration in the light of the object which the Act seeks to achieve. Appellants have not shown at any time that these statements had been retracted by him at any time. The letter of Advocate to which the Appellant Counsel have referred is dated much before these two statements and cannot be said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... watches are, thus, extended an option to redeem these seized smuggled 5543 smart watches upon payment of a redemption fine of ₹ 45,00,000/- and upon fulfilling the prescription stated in Rule 3 of the Information Technology Goods (Requirements for Compulsory Registration) Order, 2012. They would, in addition, be also liable to pay the ascertained customs duty liability of ₹ 9,78,715/- in terms of Section 125(2) thereof. At S No 12 in para 46 Commissioner has recorded the assessable value of these 5543 smart watches as ₹ 23,25,843/- and duty payable on the same as ₹ 9,78,715/-. In para 54, he has recorded that the present market value of the smart watches is ₹ 58,14,607/-. That being so if the redemption fine of ₹ 45 lakhs is held to be appropriate then the total cost to the person redeeming these 5543 watches will be ₹ 78,04,558/- which is much higher than the present market value of these goods. Thus in our view the redemption fine as determined by the Commissioner is prohibitive and hence cannot be held to be correct. In our view the ends of justice will be met if the redemption fine is determined after deducting the assessable valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mobile back covers have been ascertained by ascertaining their market values from the e commerce platforms and then taking 40% values thereof to ascertain the transaction values. Appellants have stressed that these smart watches namely DZ09, are available at much cheaper price on certain websites, namely Flipkart. For ascertaining the correctness of the claim made by the appellants we have seen price range of these smart watches, on amazon.in, and found that:- ➢ DZ09, can never be the identification factor of these smart watches, as DZ09 is neither a brand name owned by a particular manufacturing company (manufactured by various manufacturers and sold in their brand name as Padgene Smartwatch, Qiufeng Dz09 Bluetooth Smart Watch, GZDL, Qidoou, 321OU, Sazooy, Heshi etc.). It is simply an identification of the microprocessor which power these smart watches. ➢ DZ09 is the cheapest MediaTek powered Chinese smartwatch model. All of them have the same specifications (processor) but they are each taken in a different direction by their brand and the hardware they use. ➢ The prices vary from manufacturer to manufacturer and are available in range fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly makes, signs or uses, or causes to be made, signed or used, any declaration, statement or document which is false or incorrect in any material particular, in the transaction of any business for the purposes of this Act, shall be liable to a penalty not exceeding five times the value of goods. If the Appellant is not even claiming ownership of any other goods and has not produced any documents in respect of any goods other than these 5543 smart watches at any time, the logic for taking market value of those goods in which appellant has not transacted at all is not understood. Even if we uphold the order of the Commissioner imposing penalty under section 114AA of the Customs Act, 1962, then the quantum of penalty needs to be determined by taking into account the market value of the goods in respect of which appellant has transacted and produced the documents. The market value of the 5543 smart watches has been determined by the Commissioner himself as ₹ 58,14,607/- and five times of this will be ₹ 2,90,73,035/-. In his order against the five time value determined as ₹ 26,34,20,955/-, the Commissioner has imposed a penalty of ₹ 1 Crore. Applying the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unded etc.. The order for payment of duty under Section 125 (2) would be an integral part of proceedings relating to confiscation and consequential orders thereon, on the ground as in this case that the importer had violated the conditions of notification subject to which exemption of goods was granted, without attracting the provisions of Section 28(1) of the Customs Act. A reference may beneficially be made to a decision of this Court reported in Mohan Meakins Ltd. Versus Commissioner of Central Excise, Kochi (2000) 1 S.C.C. 462 wherein it has been observed in Para 6 Therefore there is a mandatory requirement on the adjudicating officer before permitting the redemption of goods, firstly, to assess the market value of the goods and then to levy any duty or charge payable on such goods apart from the redemption fine that he intends to levy under sub-section (1) of that section. In this view of the matter the objection raised by the Centre that Section 28 of the Customs Act would be attracted is not sustainable. The next question which falls for consideration is, as to whether or not a new ground or case for confiscation has been carved out as found by the CEGAT. According to the CE ..... X X X X Extracts X X X X X X X X Extracts X X X X
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