- (1.) This court by order dated June 15, 2004 admitted the appeal on the following substantial questions of Law: (i) Whether on the facts and circumstances of the case the department was able to discharge the initial burden of proving that the goods were smuggled and was so recovered from the possession of the respondents and that the evidence adduced was sufficient for the purpose of Section 106 of the Evidence Act to discharge the burden as was held in the case of Collector of Customs, Madras v. D. Bhoormull, 1974 AIR(SC) 859 on the principle whereof the onus shifts on the respondent particularly when the case was admittedly of foreign origin and the respondent, could not produce any document regarding procurement of the goods and payment thereof and the respondent failed to identify any supplier of the goods and that there was admission on the part of the respondent that the goods were procured from Nepal through cash transaction of which there was no record with further admission that the goods were illegally imported into India which seems to be sufficient evidence of discharge the burden laying on the department and shifts the onus on the respondent? (ii) Whether on the facts and circumstances of the case on the basis of appreciation of evidence in accordance with law would justify intervention by the court on reference with the finding of the Tribunal?
(2.) The short fact is that the customs authority after having raided the business place of the respondent seized certain electronic goods and at the time of raiding the respondent could not explain their source of collection of the goods as those were prima facie found to be imported materials. On account of failure the goods were seized, and appropriate authority issued show cause notice and thereafter on receipt of the explanation the first authority held that the goods are liable to be confiscated as those are clandestinely imported. The Commissioner (Appeals) on consideration of the facts and circumstances of the case and also the statement recorded by the raiding officials and the partners of the respondent firm came to the conclusion that the goods are neither notified one nor the same could be classified to be of smuggled character. Therefore the order of confiscation as well as penalty was set aside. The revenue thence took this matter on appeal to the Tribunal. The learned Tribunal upheld the judgment and order of the first appellate authority [2003 (256) E.L.T. 908 (Tribunal)]. It appears in addition thereto the learned tribunal on fact found that the goods are not notified or prohibited goods within the meaning of Sections 113 and 111 nor they were found to be of smuggled character as it is a pre-condition for issuance of such action under Section 123 of the Customs Act.
(3.) The learned Tribunal also found on fact that these goods are no doubt branded imported goods and the same were available in market in plenty, hence the smuggled character cannot be presumed and it was also held by the learned tribunal that when the imported goods are available in the market in plenty presumption is in favour of lawful importation of the goods. Under these circumstances, the learned Tribunal held that the revenue has failed to discharge its burden to prove that these goods were of smuggled character, or to bring an action under Section 111 read with Sections 113 and 143 of the Customs Act.;