ORDER
D.C. Mandal, Member (T)
1. By the impugned order the Additional Collector of Central Excise, Meerut has confiscated the goods mentioned at Serial Nos. 1 to 23 of the list enclosed to the impugned order-in-original under Section 111(d) read with Section 111(o) and 111(p) of the Customs Act, 1962. The goods were seized from the business premises of M/s. Kishore Photo Studio (hereinafter referred to as appellant No. 1). The Additional Collector, however, allowed the goods to be redeemed on payment of fine of Rs.20,000/- in lieu of confiscation and payment of Customs duty at the appropriate rate, under Section 125 of the Customs Act, 1962. He also imposed a penalty of Rs.20,000/- on appellant No. 1 under Section 112 of the Customs Act. Appeal No. C/2354/88-NRB has been filed by the Appellant No. 1 against this order.
2. In the impugned order the Additional Collector has held the sale of one Television as illegal. On this account he has imposed a penalty of Rs. 1,000/-/on Shri Mohd. Yamin (hereinafter referred to as Appellant No. 2) under Section 119 of the Customs Act. Appellant No. 2 has challenged this portion of the impugned order by appeal No. C/2355/88-NRB.
3. As both the appeals arise out of the same order-in-original the appeals have been heard together and are being disposed of by this common order.
4. I have heard Shri S.K. Dhanda, Consultant for the appellants and Shri K Kumar, SDR for the respondent.
5. A preliminary objection was raised on behalf of the appellants that Shri A.K. Chabra, Additional Collector of Central Excise, Meerut was not declared a Customs Officer under Section 4 of the Customs Act, 1962 and as such, he was not competent to pass the impugned order. On this point, Shri Kumar has cited Notification No. 252/83- Cus., dated 27.8.1983 issued under Section 4(1) of the Customs Act, by which the Collector of Central Excise, Meerut was declared as the Collector of Customs. After this Notification was shown to Shri Dhanda, he did not press for the preliminary objection. S/Shri Dhanda and Kumar were then asked to argue the case on merits.
6. The contentions of the appellant No.l in the grounds of appeal and also through the counsel during the personal hearing before me are, in brief, as follows :
(i) The Department has relied on the statement dated 17-10-86 of Shri R.K. Malhotra, the proprietor of the appellant No. 1. The said statement was not voluntary. It was dictated by the Officer and Shri Malhotra’s signature thereon was obtained. In his letter dated 23-6-87 (copy at Annexure ‘U’ at page 121 of the paper-book) addressed to the Additional Collector of Central Excise, Meerut, Shri Dhanda, Consultant, requested that on the date of personal hearing he might be given an opportunity to cross-examine the Superintendent Central Excise who headed the party of HQrs (Preventive) Intelligence which had searched the business premises of M/s. Krishna Photo Studio on 17-10-86. Shri Dhanda explained in that letter that the cross-examination was very essential to establish that the statement of Shri R.K. Malhotra was recorded on that date under duress and inducement of relief if his client gave the statement as desired by the authorities. The Additional Collector did not give the opportunity of cross-examination as requested nor has he given any reason for not acceding to the request. As the statement of Shri R.K. Malhotra was not voluntary and the same was obtained by duress and inducement of relief, the same could not be relied upon in the proceedings.
(ii) Except VCR (item No. 16 of the list enclosed to the impugned order) no other article as per the said list was notified goods under Section 123 of the Customs Act and Chapter IV-A of the Customs Act, 1962. Notification No. 205/84-Cus dated 20-7-84 (later amended by Notification No. 263/84-Cus dated 23-10-84) was issued under Chapter IV-A of the Customs Act. The VCR along with AC Adapter (item No. 13) and Battery Charger (item No. 19 of the list) was given to the appellant No. 1 by Smt. Gulshan Sehgal for checking and dubbing certain programmes. These items belong to Smt. Gulshan Sehgal. She gave an affidavit and produced baggage receipt No. 138969 which show that she legally imported the VCR on payment of Customs duty and that the VCR along with its accessories referred to above was given by her to appellant No. 1. National Video Camera (item No. 15 of the list) was acquired by the appellant No. 1 in 1981 whereas Video Camera was notified in 1984 vide Notification No. 205/84-Cus., dated 20-7-1984.
(iii) All the goods as per list enclosed to the impugned order are old and used. The additional Collector got the goods at Serial Nos. 1,2,3,4,5,7,8,9, 10,11,12,14,15 and 20 examined by an expert. The experts opinion is at page 79 to 82 of the paper-book. The expert has opined that all these items are old and used and some of them are out-dated and the model is discontinued. The Additional Collector has not given any reason why he has discarded the expert opinion.
(iv) (a) The articles mentioned against srls. No. 1,2,3,4,5,11,13,16,19 & 20 belong to Customers, Mends and relative which were received for repair or getting certain jobs done. Hair Drier shown against srl. No. 20 belongs to the wife of Shri R.K. Malhotra and was brought to the shop for getting the cord changed. Items No. 13,16 & 19 belong to Smt. Gulshan Sehgal who gave these to the appellants for checking and dubbing certain programmes as already indicated earlier.
(b) The articles mentioned against srls. No. 8,9, and 10 of the list were given by Shri N.K. Malhotra, father of Shri R.K. Malhotra who has confirmed this fact in his affidavit.
(c) The camera shown against srl. No. 7 of the list was acquired by the appellant No. 1 second-hand. The camera was taken out by Shri R.K. Malhotra to Singapore on 24-9-85, as would be seen from the photocopy of his passport.
(d) The articles shown against Srls. No. 12,14 & 15 were acquired secondhand by the appellant No. 1 for professional use.
(e) Articles shown against Srls. No. 6,17 & 18 were brought by Shri R.K. Malhotra as part of his baggage during his vist to Singapore and the same were allowed by the Customs under Baggage Rules.
(f) Items No.21,22 & 23 of the list relate to films, the import of which is allowed under OGL and which are easily available in the market for purchase. These films were purchased by the appellants and the purchase vouchers were produced before the Additional Collector during the personal hearing.
(v) The appellant explained the sources from which all the articles listed at Srls. No. 1 to 23 were acquired. In respect of the goods which were received from the customers for repairs etc., affidavit from the persons concerned were filed by the appellant before the Additional Collector. The Additional Collector ignored the facts on flimsy ground. The affidavits should have been accepted as good evidence as the same were not challenged nor rebutted. The Tribunal’s decision reported in 1988 (37) ELT 152 was cited in support of this argument.
(vi) Except Item No. 16, all other goods are not notified goods. The burden of proof that the same are smuggled goods rests on the department. The Department has not discharged that burden. On this point the decisions of this Tribunal, reported in 1988 (33)-ELT 388(T) and 1988 (16)-ECR534(T) are relied on.
(vii) Denial of the facility of cross-examination has resulted in the denial of natural justice, which has vitiated the entire proceeding. In support of this argument reliance has been placed on the Tribunal’s decision reported in 1988(36)-ELT-304(T).
(viii) The show cause notice did not say that the duty was demandable. By demanding duty in the adjudication order, the Additional Collector has gone beyond the scope of the show cause notice.
(ix) Goods are not liable to confiscation. The imposition of penalty is illegal.
7. Arguing in appeal No. C/2355/88-NRB for Mohd. Yamin, the learned consultant has stated that the Additional Collector has imposed penalty of Rs.1,000/- on appellant No. 2, under Section 119 of the Customs Act. No penalty can be imposed under this section. The order of penalty against appellant No. 2 should, therefore, be set aside and the appeal be allowed.
8. Shri K. Kumar for the respondent has argued that the allegation of coercion and duress regarding the statement of Shri R.K. Malhotra is not sustainable. He explained some of the items and did not say anything about the rest. The burden of proof that the goods were legally acquired by the appellant No.l shifted to him. In support of this argument the learned SDR has relied on the decision of Calcutta High Court in the case of East Jamuria Co. v. Collector of Customs, Calcutta, reported in 1978-Cen-Cus- age 79-D (Cat) and Madras High Court decision in the case of 5. Laxmichand v. Government of India, reported in 1983-ELT-322 (Mad). Regarding affidavits, the learned SDR has argued that the same were not acceptable as evidence in the facts and circumstances of the case. In support of this argument he has relied on the judgments reported in AIR-1963-SC-1, AIR-1959-Mysore-90 and this Tribunal’s decisions reported in 1987 (27)-ELT-695 and 1987 (32)-ELT-730. Regarding the Additional Collector’s order about charging duty, the learned SDR has drawn attention to the proviso to Section 125 of the Customs Act in which it is clarified that any fine in lieu of confiscation of goods imposed under Sub-section (1) of Section 125 shall be in addition’ to any duty chargeable in respect of such goods. Regarding penalty imposed on appellant No. 2, Shri Kumar has fairly conceded that the penalty could not be imposed under Section 119 of the Customs Act.
9. I have gone through the records of the case and have considered the arguments of both sides. I find from the photo-copy of letter dated 23.6.87 written by Shri S.K. Dhanda, Consultant for the appellants to the Additional Collector of Central Excise, Meerut that the learned consultant specifically requested for an opportunity to crosexamine Shri Prasad, Superintendent of Central Excise. He also explained in that letter as to why the cross-examination was very essential. The request for cross-examination has not been acceded to by the Additional Collector. The only reason given by him in support of rejecting the request for cross-examination is that “Party’s contention that his statement was recorded under duress and coercion threat and inducement is un-founded and against the merit of the evidence. As such, the defence contention in this regard is rejected”. The reason shown by the Additional Collector is rather vague. He has not spelt out the “evidence” on the basis of which he has rejected the request for cross-examination. In ground No. III of the Appeal Memorandum it is stated that the appellants submitted affidavits of Shri Amrish Kumar Singal, Shri K.K. Rostogi and Shri K.L. Malhotra, who was one of the Panch witnesses, which supported the appellants contention that Shri R.K. Malhotra was threatened and forced to give the statement as dictated by the Customs Officer. Particularly in view of the affidavits of these persons the Additional Collector should have given an opportunity to cross-examine the concerned officer as requested by the learned consultant. The refusal to grant the facility of cross-examination without giving sufficient reason is a gross violation of the principles of natural justice and on this ground alone the impugned order is required to be set aside and thematter should be remanded to the Additional Collector of Customs, Meerut for de now adjudication after giving an opportunity of cross-examination to the appellant No. 1. Secondly, the appellant No. 1 contended before the Additional Collector that the seized goods were old and used. The adjudicating authority got the goods examined by an expert as per request of the appellant. He has not discussed about the condition of the seized goods or the expert’s opinion and has not given any findings. He has not also given any reason as to why he has ignored the opinion of the expert. As he got the goods examined by an expert at the request of the appellant, he should have given his findings thereon before passing the adjudication order. For reasons best known to the Additional Collector, he has remained silent about the expert opinion.
10. In the light of the above discussions, I am of the view that the impugned order should be set aside and the appeal No. C/2354/88-NRB filed by the appellant No. 1 should be allowed by remand. Accordingly, I remand the case relating to the said appeal to the Additional Collector of Customs and Central Excise, Meerut for de novo adjudication after giving necessary opportunity of cross-examination as requested by the appellant No. 1. While re-adjudicating the case, he should also give his findings regarding opinion given by the expert on examination of the goods. The process of re-adjudication should be completed within a period of 4 months from the date of receipt of this order.
11. As the case relating to appeal No. C/2354/88-NRB is being remanded to the Additional Collector for re-adjudication, it is not necessary to give findings on the oilier points raised by the appellant No. 1 and his counsel during the hearing.
12. So far as appeal No. C/2355/88-NRB fifed by the appellant No. 2 is concerned, this appeal has challenged the penalty of Rs. 1,000/- imposed on him. The learned consultant has correctly argued and the learned SDR has fairly conceded that the penalty could not be imposed under Section 119 of the Customs Act, 1962. Section 119 says that any goods used in concealing the smuggled goods are also liable to confiscation. In the circumstances, the order of penalty imposed on the appellant No. 2 is set aside and the appeal filed by him is allowed.
13. Thus, the impugned order is set aside. The appeal No. C/2354/88-NRB is allowed by remand and appeal No. C/2355/88-NRB is allowed with consequential relief.