TMI Blog2004 (3) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... otification under Section 11B or 123 of the Act, and whether CEGAT was right in relying on market opinion in place of notifications under the Customs Act. (3) Whether the CEGAT has erred in holding that the SKD packs and CKD packs were only parts of watches and not covered by the notification. Whether the CEGAT was right in holding that the usage of the case packs and CKD packs, were not restricted to the importer and could be sold in open market, event though the notification places the restriction of usage by importer only as per notification 43/85-Cus. (III)". 2.The respondent is a Government company with two watch manufacturing units at Jalahalli, Bangalore. The officers of the customs department, on receiving information that stocks of smuggled watches and components were stored in the factory premises of the respondent conducted a search of the premises. According to the Department, the search disclosed the following: (a) A stock of 10,000 watch movements of "citizen calibre 8200" in CKD condition covered by Bill No. 015/90 dated 16-10-1990 of R.Corporation, Navsari, Gujarat for Rs. 20,95,808/- and Bill No. 010/90 dated 22-10-1990 of Vespa Trading Company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Section 111(d)/111(p) of the Act. (iv) Why the 4896 nos. of ADD wrist watches valued at Rs. 27,49,710/-manufactured out of the wrist watch movements supplied by M/s. Lakshmi Watches Pvt. Ltd., Bangalore should not be confiscated under Section 120(1)/120(2) of the Act. (v) Why the plastic/polythene covers and the other packing materials such as cardboard boxes used for keeping/concealing the goods under seizure, should not be confiscated under Section 118/119 of the Act, 1962. (vi) Why penalty should not be imposed on them under Section 112(a) (b)(i) (ii) of the Act. 4.The respondent and M/s. Lakshmi Watches (P) Ltd., filed objections denying any irregularity in the supplies or violation of provisions of the Customs Act. M/s. R.R. Corporation filed objections denying supply of any goods to the Respondent. They contended that their business was polishing of diamonds etc., and someone must have used its name. They stated that Sunil Kothari who appeared to have made the supplies by using their name was not known to them. After enquiry and hearing, the Adjudicating Authority passed an order dated 7-5-1993. He held that the goods purchased from R. R. Corp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 120(2) of the Act. HMT Ltd., was however permitted to redeem the said ADD wrist watches on payment of a redemption fine of Rs. 1,50,000/- under Section 125 of the Act, by exercising option within a period of 30 days from the date of receipt of the order. (v) Confiscation of the plastic/polythene covers and the other packing materials such as the cardboard boxes used for keeping/concealing the goods under seizure under the provisions of Section 118/119 of the Act. (vii) Direction that no separate duties of customs be collected while releasing the goods upon realisation of redemption fine, in respect of the goods cited at paras (i) and (iv) above. (vii) Imposition of the following penalties under Section 112(b)(ii) and 112 (a)(ii) of the Act:- (i) M/s. HMT Ltd., Rs. 5,00,000/- (ii) M/s. Laxmi Watches (P) Ltd. Rs. 1,00,000/- 5.Feeling aggrieved, the respondent filed an appeal before the CEGAT in Appeal No. C.289/94. By order dated 23-8-2002, CEGAT allowed the appeal and set aside the order of the Adjudicating Authority. 5.1In regard to goods purchased from R. R. Corporation/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n/Vespa Trading Co., and the supplies by Lakshmi Watches (P) Ltd., However significantly, all the three questions of law raised relate to the supplies by R.R. Corporation/Vespa Trading Company and not in regard to the supplies by Lakshmi Watches (P) Ltd. 7.In so far as the goods purchased from Lakshmi Watches (Pvt.) Ltd., no question of law arises for consideration. The order of the Adjudicating Authority clearly shows that he was satisfied that their importation into the country was licit, but the violation was in regard to condition No. (iii) of the Notification No. 43/85 dated 28-2-1985, which reads thus: "(iii) The importer shall, within such period as the Assistant Collector of Customs may specify in this behalf, produce a certificate from the Assistant Collector of Central Excise in whose jurisdiction the factory manufacturing such wrist watches is situated, to the effect that the said imported component have been used in the manufacture of the said "Wrist Watches". The Adjudicating Authority was of the view that the importer should be the actual user of the imported goods for the manufacture of wrist watches. The Tribunal on considering the wording of the said Not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to take special measures for the purpose of checking the illegal import, circulation or disposal of goods of any class or description, or facilitating the detection of such goods. Section 123 provides that where any goods to which the said section applies (that is gold, watches and any other goods to which may be specified by notification by the Central Government) are seized under the 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. Notification No. 204-Cus. dated 20-7-1984 issued under Section 123(2) of the Act, and Notification No. 205/84-Cus., dated 20-7-1984 under Section 11B of the Act, are issued in regard to the following: "Watches, watch movements including partly assembled movement, dials and cases for watches". The Tribunal has found that the goods in question are not watches or watch movements or dials or cases for watches. They could not also be treated as partly assembled movements, as there was no such part assembly. As the description of goods clearly showed, the goods consisted of 54 loose parts, which were neither assembled fully no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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