ORDER
G.N. Srinivasan, Member (J)
1. This is an Appeal against the captioned order passed by the Commissioner of Customs (Prev.) Bombay in which he ordered absolute confiscation of 1243 packages of primary nickel strips totally weighing 10,026 kgs. valued at Rs. 35.09 lacs under Section 111(d) of the Customs Act, 1962 and also levied a penalty of Rs. 5.00 lacs on the appellant.
2. Officers of Marine & Preventive Wing of the Customs (Prev.) Com- missionerate, Mumbai searched the godown premises of the M/s. Pawan Enterprises situated at Bhiwandi, but nothing incriminating was recovered from the premises. From another godown, according to information given by Shri Anil Mishra, Supervisor of the godown, the following goods were detained from the godown : (i) 162 pieces of Copper Wire Bars. (ii) 1,094 pieces of Antimony Ingots weighing approximately 25.162 kgs. (iii) 144 bags of Nickel Sheets weighing 9,648 kg.
On 23-3-1995, 144 bags of Nickel Sheets were seized on the ground that the Nickel Sheets were of foreign origin, under a Panchanama. The Other two items were released. On 24-5-1995 a Show Cause Notice was issued calling upon the appellants to Show Cause as to why 1,243 primary Nickel strips weighing 10,026 kg. valued at Rs. 35.09 lacs should not be confiscated under section 111(d) and why a penalty should not be imposed under section 112(b)(ii) of the Customs Act, 1962. On 29-5-1995 a comprehensive reply was filed by the appellant refuting the allegations contained in the Show Cause Notice. On 31-8-1995 the Commissioner passed the impugned order as stated above. Hence the appeal.
3. Dr. Kantawala the Ld. Advocate for the appellant in Appeal No. C/8/96-BOM argued that the seized goods were neither notified under Chapter IV-A nor specified under Section 123 of the Customs Act. Therefore, the burden to prove their smuggled character rests solely on the Department and which burden had not been discharged by it. On the contrary, it is argued according to findings of the Commissioner, that the Appellant was not instrumental in smuggling an item Nickel which is one of the items which is freely importable under OGL, as there is neither any prohibition nor restriction against its import in the Import Policy for the relevant time. In fact Nickel is freely importable under Chapter 75 of the relevant import policy as is reflected therein. Hence it is argued by Dr. Kantawala, that provisions of Section 111(d) of the Customs is not applicable in this case. He argues further it is true that the word “INCO”, are mentioned in the Nickel ingots and that itself will not show that they are of Foreign origin. The burden of the Department has not been discharged fully, therefore, he also stated that mere Foreign origin of the goods is knot sufficient in law to shift the burden which is otherwise on the department. The facts and circumstances of the case, it is further argued, that the department had not adduced any direct evidence to draw only conclusion that the appellant was responsible for the smuggling of the stock seized. It is further, argued by the Ld. Counsel that even if the bill produced by the appellant was not correct, since the item was not a notified item, merely because, it was foreign goods in the absence of any other evidence, it cannot be held that the officers had reasonable belief that they were smuggled goods. Alternatively it is argued by him that the adjudicating authority erred in law by not giving the option for redemption of the goods on payment of redemption fine as held by Supreme Court reported in AIR 1987 S.C. 1982. He also cites the decision of Bombay High Court in Santosh Gupta v. Union of India – 1990 (48) E.L.T. 210 (Bom.) to show that burden is on the Department. He also cited the decision of the Tribunal in Bon-Ton Sight Care v. Collector of Customs – 1993 (64) E.L.T. 239 (Tribunal) where the Tribunal held that merely because, particulars in certain bills not tallying in respect of some goods there cannot be any confiscation.
4. Shri S.D. Nankani the Ld. Counsel for other appellants in other appeals argued that the seized goods in this case is of Canadian Origin and his clients have sold to M/s. Pawan Enterprises only Russian and African made goods. They never sold any Canadian goods. Hence seized goods were not his goods which have been sold as no proper enquiry has been made as to what Pawan did with the goods sold by his client. The order goes beyond the Show Cause Notice. He attached the order stating that his client did not sell the Canadian goods and hence he could not be held liable.
5. Shri S.V. Singh, the Ld. JDR narrated the facts and stated that on 18-3-1995 Mr. Mishra’s evidence was recorded. He stated that these goods came to godown in October 1994, when he was on leave. He was not aware of the ownership of the goods and the goods stored were of foreign origin without any documents. One Sunil Kumar Agarwal the Accountant stated on 28-3-1995, that he was called by Pawan and gave certain documents which were lying with Pawan for accounting purposes, and directed him to hand over to the Customs Authorities that the papers were with Sunil Agarwal for accounting purpose, and that file was hand over to him only on 20-3-1995. He put signature on 28-3-1995, and signed in all documents this has been fully described in paragraph (iv) of the Show Cause Notice.
6. We have considered all aspects. Originally Russian and African made Nickel were sold by MMTC to Mahindra Ugine Ltd. who sold the same to a firm M/s. Agarsha Enterprises who sold the same to appellants Gulab Enterprises who in turn had sold the same to the other appellant Pawan Enterprises. If the goods of Russian Origin has been sold, if the goods seized which were of Canadian origin then how could Gulab Impex be connected in this case? Just because, goods is of Canadian origin can the three appellants be charged violation for illicit of import of Canadian goods be made without any basis? Just because the goods seized are of Canadian Origin licit import can not be questioned by the Customs Authority. In our view this action is not correct in law as there must be evidence to show by the Department that the import was illicit. The facts would clearly show in page 16 of the impugned order that there is no link among appellants in respects of goods of Canadian Origin. The goods dealt with the appellants M/s. Gulab Impex who, were reported to have sold goods to Pawan was of Russian origin. Hence that does not link the Canadian goods to Gulab Impex. It has been contended specifically by Shri S.V. Singh the Ld. JDR, that act of Pawan Kumar dated 28-3-1995 was wrong in law. In our view that does not implicate that there has been a wrong act committed by Pawan. We feel that it has not sold the goods which were not banned item when they came within the OGL. Once the goods come within the OGL facts that they had been certain non-explanation as to how there has been proper import by the appellant can the customs authorities confiscate the goods under law? In our view it cannot be done. The Customs authorities has specific powers as mentioned in Section 123 and the provisions of Chapter IV-A of the Act to confiscate the goods. We, are therefore, of the view that on the basis of the evidence, the impugned order, cannot be legally sustained. As we are allowing the appeal on the basis of the evidence we are not dealing with other plea made by Counsel. Appeals are allowed with consequential relief.