ORDER
A.C.C. Unni, Member (J)
1. Briefly stated the facts of the case are that on 28-7-1995, Preventive Officers of the Customs searched the business premises of the appellant and seized wrist watches of foreign origin valued at Rs. 25,100/- (CIF) and Rs. 75,350/- market value in India. In his statement given on the date of seizure the appellant admitted that he had no documentary evidence to prove the licit acquisition and possession of the imported goods. Later at the stage of adjudication, the appellant took a plea that the watches of foreign origin were purchased from passengers who had cleared them on payment of duty and the watches fixed with foreign origin movements were assembled in India. The appellant repeated the plea before the Commissioner (Appeals) also. The authorities below did not accept the contention of the appellant and the Commissioner (Appeals) in the impugned order observed that both wrist watches and watch movements are notified items under Section 11 of the Customs Act and they are also covered under Section 123 of the Customs Act. Therefore, the onus was on the appellant to prove the licit importation of such goods. As regards the baggage receipt pertaining to Shri Bhajan Singh Kapoor dated 8-3-1994 produced by the appellants as proof of legal import of the watches, the Commissioner (Appeals) declined to give any credence to the said documents by observing that if the watches were cleared in 1994, nothing prohibited the appellants to keep a record of the same and inform the Seizing Officer at the relevant time. As regards the watches assembled in India, Commissioner (Appeals) held that the appellants had not produced satisfactory evidence from the manufacturer about the sale of the said watches to the appellants.
2. As a result, the Commissioner (Appeals) confirmed the order-in-original directing absolute confiscation of all the 275 wrist watches and imposition of personal penalty of Rs. 10,000/- on the appellant.
3. Ld. Advocate for the appellant Shri S.C. Puri contended that though the appellant had initially stated that he had no bills or other documents to show the licit import of the watches/watch movements, he had subsequently submitted to the authorities and invoice dated 24-7-1995 issued by M/s. Rajesh Enterprises, H-236, Naraina Vihar, New Delhi and a receipt No. 156286, dated 8-3-1994 issued by the Collector of Customs, Sahara International Airport Bombay and a cash memo dated 7-6-1991 issued by the Customs and Excise Retail Shop to M/s. Rodenise (India), 6/9 Kirti Nagar Industrial Area, New Delhi as proof of licit import of watch movements as well as watches. The adjudicating authority as well as the first Appellate Authority had not taken into account the said documents and had not given any finding as to why the said documents should not be relied upon except the observations made by the Commissioner (Appeals) stating that the appellants should have kept the record of the documents and produced them before the Seizing Officer. Ld. Counsel had also drawn and relied upon the Tribunal’s decision in Standard Watch Company v. Collector of Customs reported in 1990 (47) E.L.T. 571 in which Tribunal had observed that merely because movements of watches were of foreign origin, watches assembled in India with movements of watches of foreign origin cannot be considered to be the wrist watches of foreign origin. The confiscation of watches of this basis had been set aside by the Tribunal in the said case. Ld. Counsel submitted that the initial onus of producing evidence of licit import of the goods had been discharged by the appellant by producing the three documents relating to the import of watches/watch movements. It was for the Department to investigate the said matter further and to establish that the documents produced ware fake or they do not relate to the seized goods. Ld. Counsel contended that the impugned order should not be sustained since the appellant has discharged the onus of proving the licit import of the goods with production of the three documents produced before the adjudicating authority.
4. Ld. JDR defending the impugned order submitted that the appellants had not been able to produce any satisfactory evidence about the licit import of the goods. Appellant had himself admitted in his statement on the date of seizure that the goods were of smuggled nature of foreign origin and he was not in a position to produce any bill/invoice or other documents relating to legal import. As regards the three documents subsequently produced before the lower authorities ld. JDR contended that appellant himself had stated that he will not be in a position to produce any satisfactory evidence and he had also stated that the persons who supplied the goods did not provide any bills or other documents or about their import nor does he know their name and address. He further draw attention to the fact that the cash memo issued by the Central Excise Retail Shop produced by the appellants as proof of import of watch movements by pointing out the said cash memo is dated 7-6-1991 wheras the seizure had taken place on 28-7-1995. As regards the case law relied on by the appellant, ld. JDR submitted that there was no dispute in the present case as to whether the watches assembled in India with foreign watch movements were to be considered as watches of foreign origin. The issue here was that both the watches and watch movements were prohibited items under Section 11 of the Customs Act items whose import is regulated under Section 123 of the Customs Act. It was incumbent on any person possessing goods covered by the said Section to prove the licit import, possession of such goods.
5. I have considered the submissions of both the sides. It is not in dispute that the goods under dispute are covered by Sections 11 and 123 of the Customs Act and that any person who is in possession or is dealing with these items are required to prove through documents or otherwise licit import of the said goods into India. The appellant though he initially coula not produce such documentary proof, had during the proceedings before the authorities below produced certain documents which correspond to the seized items, namely, watches as well as watch movements. The documents relied on by the appellants show the name and address of the original person to whom the said goods were sold by the authorities. It was for the Department to investigate further and to rebut the said evidence by showing that the documents were fake or that the goods covered by these documents do not relate to the seized goods. The department has not done so and the authorities below have brushed aside the said evidence without giving any satisfactory reason for doing so. The finding of the Commissioner (Appeals) that it was for the appellant to keep a record of sale/purchase of the said goods and show it to the Seizing Officer does not take into account the fact that appellant is actually only a Shopkeeper who is basically concerned only with sale of his goods across the counter. Taking into account the nature of the business engaged in by the appellant, I find that the authorities below have not given any legally satisfactory reason for rejecting the evidence produced by the appellant. In these circumstances, the appellant is entitled to the benefit of doubt. Accordingly, I set aside the impugned order. I direct the authorities below to allow redemption of the watches on payment of appropriate redemption fine calculated on the basis of relevant rules and procedure. In the circumstances of the case, I also feel that the penalty imposed is uncalled for. The same is also set aside. The appeal is disposed of in the above terms. At this stage, ld. Counsel brings to my notice that the appellant had deposited Rs. 5,000/- at the stage of First Appellate proceedings. This will also be taken into account while adjudicating the redemption fine. The appeal is allowed in above terms.