Bhaskar Bhattacharya, J. - (1.) By this appeal under section 130A of the Customs Act, (hereinafter referred to as the Act) the Commissioner of Customs (Preventive), West Bengal, Kolkata has challenged the order of the Appellate Tribunal affirming the finding of the Commissioner of Appeal holding that there was no justification for confiscation of goods belonging to the appellant and of imposing personal penalty upon the directors of the respondent company.
(2.) The fact giving rise to the filing of this appeal may be summed up thus: (a) Acting on a specific information that huge quantity of Silk fabrics of Chinese origin had been stored at the factory-cum-godown premises of M/s. Ritika Limited, the respondent herein, the Officers of P & I Branch, West Bengal, Kolkata searched the premises in presence of the Assistant Commissioner of Customs, P & I Branch, the Director of M/s. Ritika Limited and two independent witnesses. The search yielded in recovery of 2907.67 meters of silk fabrics of Chinese origin in roll form as well as in cut-piece form. On demand, the representatives of the company could not produce any document except one voucher of Ritika Limited and one bill of Nav Bharat Textiles, in support of legal importation/ acquisition of the goods. (b) The goods were seized under section 110 of the Customs Act on reasonable belief that those were smuggled into India through unauthorised route in contravention of section 3(3) of Foreign Trade (Dev & Reg) Act, 1992 read with section 11 of Customs Act. (c) After departmental investigation, a notice to show-cause was issued on 5th February, 1998 to the respondents asking them to show-cause why the seized goods should not be confiscated and why penalty should not be imposed upon the directors of the Company. In reply to the notice, written explanations were given stating that the Company purchased raw-materials from the various suppliers including one Nav Bharat Textiles and payment were made through account payee cheques. In other words, the respondents claimed to be bona fide purchasers from Nav Bharat Textile and according to the respondents, the salesman of Nav Bharat Textile came to the shop of the respondents and supplied those materials on the basis of voucher the amount was paid by account payee cheques which were duly encashed. (d) The Joint Commissioner of Customs after hearing the parties ordered absolute confiscation of the seized goods and imposed personal penalty of Rs. 7,00,000/- upon each of the three Directors of the M/s. Ritika Limited under section 112B of the Act. The said Joint Commissioner while passing such order, came to the conclusion that the purported supplier namely, M/s. Nav Bharat textile on investigation having been found to he a non-existing concern, the department had discharged their initial burden of proof. It is further recorded that correspondence with the Bank could not disclose who had actually encashed the cheques purportedly issued for payment of the goods and accordingly, he disbelieved the defence of the respondents that they were bona fide purchasers for value. (e) Being dissatisfied, the respondents preferred an appeal before the Commissioner of Customs (Appeal) and the said appellate authority allowed the appeal thereby setting aside the order of confiscation and penalty with a definite finding that the respondents purchased the goods through Nav Bharat Textile for which payment was made by cheques. It was further held that goods being non-notified item, the burden of proof that the goods were smuggled in nature rested upon the department and the department had failed to discharge the same by not adducing any concrete evidence to substantiate the contention.
(3.) Being dissatisfied, the Revenue preferred an appeal before the Customs Excise and Gold Control Appellate Tribunal and as indicated earlier, the Tribunal has affirmed the order passed by the appellate authority.;