ORDER
Gowri Shankar, Member (T)
1. The officers of the Commissionerate of Customs, Preventive, searched the shops Sure and Sure Boutique, located on the ground and first floor of Radha Niwas at Khar, Mumbai. They seized ready-made garments, leather belts, pouches and bags, etc., of foreign origin on the view that the goods were smuggled. The goods are stated to have market value around Rs 64.15 lakhs. Parbat B. Patel, proprietor of Sure and Narsi Devji Patel, proprietor of Sure Boutique, who was the cousin of Parbat B. Patel were interrogated in the course of investigation
and their statements were recorded. Parbat Patel said in his statement that he was engaged in selling garments and other articles accepted the fact of seizure shown willingness to pay Rs 2.00 lakhs towards duty. Narsi Devji Patel, his cousin was confronted with the bills of Sapna Enterprises, Vareeja Over-seas, Patel Apparel and Pravin Plastics, which were produced to show that the goods were supplied by these firms. He agreed that none of the bills showed the goods of foreign origin. Except that he could not corelate the bills under seizure. He agreed that the goods specified under Annxures C, D and E of the panchanama gave details of various goods of foreign origin; that he did not have documents covering the goods under seizure. He was questioned with regard to each of the bills except the bills show general descriptions, the goods under seizure were specifically of foreign origin bearing well known foreign brand names such as Gianni Versace, Calvin Klein, etc. The officers recorded the statement of Khetsi Hirjee Shah, proprietor of Sapna Enterprises who accepted that he had sold only unbranded readymade garments. He denied the claim made by Narsi Devji Palel and Parbat Patel that the goods found in the shop were sent by him. Statements to this effect with regard to the bills issued by Yatin Manubhai Thakkar, proprietor of Vareeja Overseas, Khubchand Devji Gala, proprietor of Fantasy Sales/Fantasy Bags, Beig Shabeer Ahmed Yousuf, proprietor of Smart Leather, Gulabchand Devji Gala, proprietor of Gala Bag Works, Praveen Himmatlal Meghani, proprietor of Praveen Plastic Products, Mahesh Savji Manek, proprietor of M “N” M Ready-made Garments, Bharat Kumar Dayashankar Jani, proprietor of Super garments and Naina Dilip Lathia, proprietor of Dilip Traders. All of them stated that the goods seized by the officers, sale of which was attribute to them was not true, they have not supplied any of the goods. Affidavits filed by proprietors of Summer Apparels, Ambika Garments, Patel Apparels, Priority, Choosychery all were to the same effect.
2. Notice was issued on this basis proposing confiscation of the goods under Clause (d) of Section 111 of the Act on the ground that imports were unauthorised and proposing penalty on Parbat Patel and Narsi Patel under Section 112 of the Act. Persons concerned replied through their Advocates that the goods, which were seized, were 85% of Indian origin and only 15% of foreign origin. They were legally and validly purchased from genuine parties, and bills and vouchers with regard to them however had been produced. There is not even a prima facie case establish for smuggling. It is also contended that payment of goods have been made by cheques and copies of bank statements shown such payments were submitted. It was accepted that there were three sets of goods of seized goods. It is also contended that in a number of cases goods of Indian labels shown foreign origin have been put on goods of Indian origin. The Commissioner did not accept these statements. He found the charges in the notice established. He discounted the retractions made by Parbat Patel and Narsji Patel in their statements as unacceptable in view of the judgment of the Supreme Court in K.L Pavunni v. Asstt. Collector, 1997 (90) E.L.T. 241 He concluded that the department has sufficient evidence to discharge the burden by proving the documents produced by these persons were not connected with the goods and also by statements of persons who it was claimed had been found. He however ordered release of garments and other goods, which did not bear the country of origin from the premises of Sure. He ordered confiscation of other goods to-
tally valued at Rs. 20.52 lakhs approx. with an option to redeem on payment of fine of Rs 5.00 lakhs. He also imposed penalty of Rs 1.00 lakh on Narsji Patel and Rs. 50,000/- on Parbat Patel. Hence these appeals.
3. Having heard the Counsel for the appellant and the departmental representative, we are satisfied that the Commissioner, in coming to his conclusion, has not applied his mind on the evidence that was cited before him in the reply to the show cause notice. It was contended that the persons whom the appellant had said as having supplied the goods to the appellant, and in their statements before the officers had denied having sold these goods, had in subsequent affidavits affirmed said that they had in fact sold the goods to the appellant and it was out of fear of customs officers that they had given statements to the contrary. The affidavit affirmed on 9-9-1990 by Khetshi Shah, proprietor of Sapna Enterprises in which he stated that he had sold substantial quantity of the goods to the appellant and evidence to this effect has also been produced. It is further contended that payment for the goods have been made by cheques and details of the cheques and the extracts of the bank account showing in confirmation were also produced. It was contended that several other parties had also submitted their affidavits. It was also contended that about 85% of the goods which were the subject-matter of adjudication were in fact Indian goods on the view that foreign marking would locally be put on them.
4. If the goods bear foreign markings, a presumption that arises that they are of foreign origin. After all the customers who buy them these goods from the appellant would buy in the firm belief that they are of foreign origin. The appellant, in keeping such goods of foreign origin and selling them to the customer has held out that the goods were of foreign origin. In the normal course, it is not possible for us to believe that a person who sells the goods bearing brand name of repute would advise the customers that they were not in fact what they purported to be. We agree that the presumption is rebuttable. It is not unknown that for goods of Indian origin to bear foreign markings and are sold as such. The burden of proving that the goods are not of foreign origin would however be on the person who makes the claim, in this case the appellant. However, the Commissioner has clearly not considered the affidavit of Khetshi Shah which has been produced before us and the affidavits of other sellers. The bank account produced by the appellant also indicates payment by cheques to various suppliers. If the Commissioner had good reasons for discarding the affidavits and this bank account he was entitled to do so. He has not even referred to these. We are therefore of the view that the matter requires to be adjudicated afresh by the Commissioner after fully applying his mind.
5. The appeals are accordingly allowed and the impugned order set aside. The Commissioner shall, after giving the appellant a reasonable opportunity of being heard, pass orders in accordance with law dealing with the submissions that have been made in the reply to the Show Cause Notice and other materials on record and that may be made at the hearing. We are told that the goods are still in the custody of the department. We therefore hope that the matter will be adjudicated expeditiously.