TMI Blog2004 (12) TMI 251X X X X Extracts X X X X X X X X Extracts X X X X ..... iefly the facts are that on specific information that Nokia brand mobile phones and watch movements of foreign origin were smuggled into the country by one Shri Joitkumar Jain and stored in his premises at Room No. 9, 1st floor, Rassiwala Chawl, R.S. Nimkar Marg, Mumbai 400 008, the said premises was searched by the officers on 17-9-2003. The search resulted in the recovery of 2940 pieces of Nokia brand mobile phones and 54,000 pieces of watch movements totally valued at Rs. 1.58 crores approx. On being asked, the owner of the said premises, Shri Joitkumar Jain could not produce any stock register or customs duty paying documents in respect of these goods. Hence, the said goods were seized under panchnama dated 17-9-2003 under a reasonable belief that they are smuggled and were handed over to the appellant under supratnama for safe custody. The appellant produced photocopies of invoice of M/s. Rishabh Industries, Mumbai, for watch movements and two incomplete bills of entry having only one page each in respect of import of Nokia mobile phones by one M/s. Time Land Trading Co., Vasai. Later on, the appellant was reluctant to hand over the seized goods to the department, the officers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... phones by M/s. TLTC. (h) Bill of entry shows goods are of Korean origin. The goods however have no indication of such origin. It does not mean that hey are not of Korean origin and not covered by the bills of entry. (i) Respondent erred in over-emphasising the statement of the appellant that he was General Manager of M/s. TLTC. (j) Liability to pay octroi is on the seller. On learning that the octroi has not been paid, the appellant has opted to pay the octroi himself. (k) The statement of the CHA does not believe or contradict the claim by the appellant. It was but natural that the stickers got removed during examination. Moreover, CHA retracted his statement. (l) Every mobile phone has a serial number and therefore the onus is on the department to verify the same from the manufacturers and since the department failed to do so, the finding that the goods are not of Korean origin is unsustainable. (m) The respondent erred in holding that the impugned goods were not purchased from M/s. TLTC, particularly when M/s. TLTC have confirmed the sale. (n) The goods are therefore not liable to confiscation and no redemption f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oth the clauses can be imposed simultaneously. (d) As there is no allegation of illicit importation by the appellant, no penalty under Section 112(a) can therefore be imposed. (e) There is nothing on record to show that the appellant dealt with the goods with the knowledge or reason to believe that they are liable to confiscation, therefore no penalty can be imposed under Section 112(b) also. 4.In support of his contention that the appellant discharged the burden cast on him in regard to acquisition of watch movements under Section 123 and that the department has not discharged its burden in regard to mobile phones, reliance is placed by the appellant on the following decisions: (i) S.K. Chains v. C.C.(P), Mumbai [2001 (127) E.L.T. 415 (Tri - Mum.)] (ii) Pukhraj Nihalchand Jain v. C.C., Mumbai [2003 (154) E.L.T. 715 (Tri. - Mum.)] (iii) CC(P), WB v. National Radio Products [2003 (156) E.L.T. 908 (T-Kolkata)] (iv) Laxmi Narayan Somani v. C.C., Patna [2003 (156) E.L.T. 131 (T-Kolkata)] (v) Vikram Jain v. C.C., Bangalore [2003 (158) E.L.T. 205] (vi) Takshila Spinners v. C.C., Chandigarh [2001 (131) E.L.T. 568 (Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant was asked as to where he procured the watch movements from, he stated that he did so from M/s. Rishabh Industries. The officers questioned the latter to find out as to where he got the watch movements from. He deposed that he purchased them from M/s. SSCC Society. The latter, however, denied having sold the same parts which were seized. It has come on record that M/s. Rishabh industries purchased the watch movements from M/s. SSCC Society somewhere in December, 2002. Watch movements are notified to be perishable items under Section 110 of the Customs Act, 1962 by the Government of India vide MF(DR) Notification 31/86-Cus., dated 5-2-1986 as amended. Popat Rambia also says that what he has sold in December, 2002 are perishable watch movements. M/s. Rishabh Industries seem to have sold the same movements in September, 2003, i.e,. nearly after nine months. The Commissioner has rejected the theory that the watch movements under seizure were the ones purchased from M/s. SSCC Society. We observe that the total turnover of M/s. Rishabh Industries, according to their own statement, is around Rs. 90 lakhs a year. One has to stretch one's imagination to believe that M/s. Rishabh Industri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... smuggled. Such burden cannot be discharged by making a claim that he has purchased it from someone. The appellant has failed to discharge the burden under Section 123. The goods are, therefore, rightly confiscated under Section 111(d) of the Customs Act. 9.It is the contention of the appellant that the burden of proof is on the department to prove that the mobile phones, which are not notified under Section 123, are smuggled and that the department has not discharged the burden -cast on it. We observe that there are several decisions of the tribunal that in re-spect of non-notified goods the department has to prove that they are smuggled. The Hon'ble Supreme Court in the case of C.C., Madras v. D. Bhoormal [1983 (13) E.L.T. 1546] laid down the extent to which the department has to discharge this burden. We observe that in the case cited supra the Apex Court was dealing with both notified as well as non-notified goods. According to the Apex Court, the department is required to establish such a degree of probability that a prudent man may on its basis believe in the existence of the facts in issue to discharge its burden. The court held that the department need not adduce direct ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant was asked as to where he got the Nokia mobile telephones from. He has stated that be has purchased them from M/s. TLTC who in turn imported them and cleared them from the Mumbai Air Cargo Complex on 16th September, 2003. Investigation revealed that these phones were sent out of Mumbai to Vashi on the second shift of 16th September. When confronted with this fact, the appellant states that these very phones were brought back from Vashi by him through some hamaals in a train sometime on 17th itself. This version is given to explain as to why no octroi was paid when the phones were brought back to Mumbai. The appellant was also asked as to why the stickers that were pasted on the mobile phones cleared at Air Cargo Complex were not found on the phones seized from the appellant. It is brought out on record by the clearing agent who handled this cargo that the mobile phones cleared at the Air Cargo Complex had the stickers on them and were also of Korean origin. The appellant's reply to this is that the stickers got removed when he was checking the phones he had purchased. The Commissioner holds that it is not possible that stickers nearly on all phones could have fallen off just ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'Regarding the penalty, I find that 2940 pieces of Nokia brand Mobile Phones and 54,000 pieces of watch movements of foreign origin were recovered and seized from the premises situated at Room No. 9, 1st floor, Rassiwala Chawl, R.S. Nimkar Marg, Mumbai-08. These premises are owned by Shri Joitkumar Jain. I further find that for claiming the watch movements under seizure, he has produced invoice No. 15 of M/s. Rishabh Industries for the purchase of watch movements from them. I also find that office premises of M/s. Rishabh Industries are situated in a premises which is owned by wife of Shri Joitkumar Jain and the factory premises at Goa of M/s. Rishabh Industries are owned by Shri Joitkumar Jain, the noticee. It is also seen that major funding for running of M/s. Rishabh Industries is by the noticee himself and this fact has not been denied by him at any stage of the proceedings. Since he was in a position to dictate the terms, he could manage to produce the invoice of M/s. Rishabh Industries for claiming the bona fide purchaser of the seized watch movements. However, I find even this could not help him out in any way as the model No. of watch movements covered by the said invoice ..... X X X X Extracts X X X X X X X X Extracts X X X X
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