ORDER
K.S. Venkataramani, Member (T)
1. Shri Kanayialal, Proprietor of M/s. R.K. Radio Sales and Services, Bangalore, has preferred this appeal against the Order dated 19-2-1986 passed by the Collector of Customs (Appeals), Madras, by which the Collector (Appeals), had upheld the order of confiscation of certain foreign goods from the shop of the appellant.
2. On 29-3-1984, the Customs staff of Bangalore Collectorate searched the shop of the appellant and recovered electronic goods such as National Panasonic Radio Cassette Recorders, Sanyo Radio Cassette Recorders and Unisef Cassette Tap Recorders etc., of foreign origin, valued at Rs. 31,700/- for action under the Customs Act, 1962. In a statement, following the seizure, the appellant said that one Sikh gentleman ‘Sardarji’ claiming, himself to be representative of a tape recorder manufacturer approached him a fortnight before the seizure and offered for sale the goods under seizure on credit basis which offer had been accepted by him. He placed the order for the goods which were duly received and delivery was taken about three days prior to the seizure. He said that he did not have any receipts and that he would produce the documents alongwith the invoices, the next day. He further stated that the goods were of Japanese origin but the markings had been erased. This was his explanation regarding the National Panasonic Cassette Recorder and Sanyo Radio Cassette Recorders. In respect of the Unisef Model TU 506 N and Model AF-52, here also the markings were erased and he said that these had been purchased from M/s. Pawan Electronics, New Delhi for which the Invoice No. 004015 dated 19-12-1983 was produced. Invoice for Model 52F was promised later. In a further letter dated 10-7-1984, the appellant said that the goods seized from his shop were of all Indian origin which had been purchased by taking a bank loan. Show Cause Notice was issued to the appellant and to the supplier M/s. Pawan Electronics. In a statement obtained on 19-6-1984, the Proprietor of M/s. Pawan Electronics, New Delhi, had said that he had sold Cassette Recorders TU 50 UNISEF to the appellant under Invoice No. 004015. He further said that these had been purchased by him from M/s. Nirmal Electronics of Delhi under a Bill No. 388 dated 30-7-1983. The goods sold to the appellant were of Indian origin. The reply to the Show Cause Notice furnished by M/s. Pawan Electronics was to the effect that the goods sold by them to the appellant were not those mentioned in the Mahazar relating to the seizure of the goods on 29-3-1984. It was also stated that the Import Policy for the period 1984 and earlier allowed the import of components of tape recorders to Actual Users. The appellant in his reply to the show cause notice pleaded that he was a radio mechanic dealing in radio and electronic goods and that the goods under seizure were covered by the bills produced by him. During the adjudication proceedings, the goods were also examined by an Electronics Engineer of M/s. British Physical Laboratories, Bangalore, whose services were obtained by the Department and also by one businessman in electronics goods who was produced by the appellant as his witness. The BPL’s engineer Shri Venkateswar, on examination of the goods, could only say that although the parts of the items were imported, it could not be asserted whether the goods were assembled in India or were those which’ have been imported as fully finished goods into India. On the other hand, Shri T.L. Nagaraj, the defence witness was categorical that the goods were of Indian origin. The Deputy Collector, however, held that the appellant’s claim that the goods were of Indian origin had not been established because it was found that the bills produced by him did not relate to the goods and the suppliers had also denied that the goods described in the mahazar were those supplied by them. The Deputy Collector also placed reliance on the original statement of the appellant showing receipt of the goods two weeks prior to the day of seizure which again made the bills produced by him as un-relatable because of the difference in time. She discarded the opinion given by both the experts and held that the charge was proved even on the basis of the documentary evidence itself. She also observed that the appellant had not been able to show that the goods were manufactured in India. The Deputy Collector ordered confiscation of the goods fixing a redemption fine of Rs. 15,000/-. A personal penalty of Rs. 5,000/- was also imposed.
3.The appeal against this order was rejected by the Collector (Appeals), Madras, who pointed out that the National Panasonic Cassette Recorders and Sanyo Cassette Recorders being notified items and in the absence of any documentary evidence about their licit import, confiscation was in order. Moreover, the markings of foreign origin had been found to be erased. The appellant had also failed in respect of these goods to discharge the obligation cast upon him under Section 123 of the Customs Act, 1962 to show that the goods are not contraband. The Collector (Appeals) however, gave relief in the matter of personal penalty which was reduced from Rs. 5,000/- to Rs. 2,000/-.
4. The learned counsel, Shri Jeshtmal, represented the appellant in the hearing. He contended that the Department had failed to establish the foreign origin of the goods. The appellant was a dealer in radios and dealt with only Indian goods. The suppliers, M/s. Pawan Electronics, New Delhi, had also said that they had sold only Indian goods to the appellant. The erasures of the markings of country of origin on the goods had also been explained during the adjudication proceedings as this was usually the practice even at the time of Customs clearance when component parts are imported. The Counsel pointed out that the BPL’s engineer, who had been called by the Department had not given a categorical opinion that the goods are of foreign origin whereas the expert produced by the appellant had clearly opined that the goods, because of certain aspects of workmanship, were only of Indian origin. This opinion ought to have been accepted by the Deputy Collector. The Collector (Appeals) had also not given any independent finding for considering the goods as of foreign origin. The Counsel also referred to another case of M/s. Malhotra Radio House, Bangalore, where electronic goods worth Rs. 51,300/- were ordered to be released after seizure and issue of show cause notice by the Deputy Collector.
5. Appearing for the Department, the learned Departmental Representative, Shri C.V. Krishnan urged that the claim of the appellant that the goods were of Indian origin had been clearly negatived by the investigation conducted by the Department and by the suppliers who had said that what had been seized and described in the mahazar are not the goods supplied by them to the appellant. He further pointed out that the Deputy Collector had found the charges proved on the basis of documentary evidence and even without reference to the expert opinion. The BPL Engineer was a man of long experience employed in a manufacturing firm whereas the expert produced by the appellant was only a diploma holder doing repairs and sales. The appellant had also said that he was selling the goods as “imported goods”. Therefore, there was no need to interfere with the order of the lower authority.
6. The submissions made by both the sides have been carefully considered.
7. In this case, the foreign origin of the goods would appear to have been concluded by the Department because of the fact that on these goods, the imprint of the country of origin as “Made in Japan” etc., were found to have been erased. The falsification of the appellant’s statement that the goods were of Indian origin is also another reason for holding the goods to be only of foreign origin. But it is observed that the claim of the appellant, all along, has been that the goods are Indian goods which he had purchased locally. In this connection, it would appear from the narration of Deputy Collector’s order that even in his statement on 29-3-198, he had referred to a Sikh gentleman offering to supply the goods as a representative of a radio and tape recorder manufacturing firm. The appellant further had produced on the very day of seizure certain invoices from a Delhi supplier who was also traced although the invoices had not been accepted because of certain discrepancy in Model numbers as between the goods under confiscation and those described in the invoice. The erasure of the country of origin imprinted, although might lead to strong suspicion of illegal import of the goods itself, yet when it is considered in the light of the opinion given by the BPL engineer, it would be clear that this by itself cannot form the basis for considering the goods as not of Indian origin. The BPL engineer’s opinion was that it was not possible for him to indicate whether they are fully finished imported goods or items assembled in India from imported components. This, inspite of the fact that he is from a firm which is having collaboration arrangement with the Japanese firm, ‘Sanyo’ and one of the item under confiscation is described as ‘Sanyo’ model. Thus, the opinion given by the expert is definitely ambiguous and would not advance the case of the Department. The other expert although having a lower academic qualification than the BPL engineer, yet he seem to be dealing in electrical and electronic goods in his shop ever since 1970 and he is also doing repairs of such goods. He had opened the items and had given his opinion with reference to the wiring, soldering and other aspects of workmanship, which, according to him, showed that the goods are of Indian origin. The Deputy Collector had not given due weight to this opinion on the ground that there are items coming into India from countries like Hongkong and Taiwan with fake markings of country of origin. However, no instances of such cases had been cited by the Deputy Collector while rejecting the expert opinion on this ground. Further, the falsity of the bills produced by the appellant cannot by itself, in the circumstances of this case, as discussed above, be sufficient ground for holding the goods to be of foreign origin and contraband. A reference has also been made to a case where after seizure and issue of show cause notice, the proceedings had been dropped. A copy of Order No. 16/84 dated 14-2-1985 by the Deputy Collector of Customs, Bangalore, in the case of Malhotra Radio Corporation, Bangalore, has been given to me. Even to cast the burden under Section 123 of the Act on the appellant, the initial threshold has to be crossed that the goods are of foreign origin. However, in view of the totality of the circumstances in this case, namely that the appellant had been claiming the goods to be of Indian origin, and the expert opinion on examination of’ the goods had not categorically endorsed the Department’s case that they were of foreign origin, and the rejection of the expert opinion by the lower authority is also not based on sound reasoning, it is considered that this will be a fit case for extending the benefit of doubt to the appellant. The appeal is therefore, allowed with consequential relief to the appellant.