Per Ms. Archana Wadhwa, J.
1. Both the appeals are being disposed of by a common order as they arise out of the same impugned order passed by the authorities below vide which the Chinese velvet bedsheets totally valued Rs.41,32,500/- stands absolutely confiscated and penalty of Rs.10,000/- stands imposed on Shri Arun Kumar Chirania and Rs.8,000/- on Shri Rajiv Kumar Singhal.
2. As per the facts on record, the godowns premises of M/s Shyam Traders, Proprietor Shri Arun Kumar Chirania were visited by the Preventive Customs officers on 25.01.09. The godown was put to search in the presence of Shri Rajiv Kumar Singhal, business partner of Shri Chirania. 191 bundles packed in green plastic covers showing their Chinese origin were put under seizure on the reasonable belief that the same were smuggled. Shri Rajiv Kumar Singhal told the officers that the recovered Chinese blankets were brought by him and Shri Chirania through M/s Pashupati Enterprises, Kolkata with the help of Shri Sanjay Hanuman of Kathmandu, Nepal. The same were to be sold in the open market.
3. Shri Rajiv Kumar Singhal in his specific statement recorded on 26.01.09 and 27.01.09 deposed that he is resident of Nepal and owns a shop there and he met a businessman Shri Sanjay Hanuman of Kathmandu, Nepal who also owns a shop there. He contacted the brother of his relative Shri Chirania and brought from China to Kolkata to Gorakhpur, the polyester printed knitted bedsheets. From there the goods were transported in four trucks to Gorakhpur. He also admitted that Chinese velvets were illegally imported from China to India.4. Subsequently, the appellants submitted two bills of entries passed by the Customs at Kolkata with builty and invoices relating to the transportation of polyester knitted printed bedsheets. They also submitted documentary evidence to show the sale of the goods by the importers as also the transportation of the same to their premises at Gorakhpur.5. Inquiries were got conducted and it was found that the bill of entry submitted by the appellants cleared 332 bundles of polyester knitted printed bedsheets. However, on testing of the seized goods, the same were found to be velvet and as such Revenue entertained a view that the consignment imported under the cover of bill of entry was not the fabrics seized from the Gorakhpur godown.
6. After further investigation and recording of the statements, Revenue issued a show cause notice (SCN) proposing confiscation of the goods as also imposition of penalty. The said SCN culminated into an order passed by the Joint Commissioner and subsequently confirmed by Commissioner(Appeals). Hence, the present appeal.
7. On going through the order of the original adjudicating authority, it is seen that the findings of illegal import of the fabrics in question is primarily based on the ground that whereas the goods were seized from the appellants' premises was velvet but the bill of entry produced by them showed polyester knitted printed bedsheets. As such he held that the goods in question stands illegally imported into India.
8. After hearing both the sides, we find that the matter can be disposed of without referring the various evidence produced by the appellants on record. Admitted the goods are not notified items in terms of Section 123 of the Customs Act, 1962. The seizure has been made on the basis of reasonable belief that the same were smuggled. The authorities below have not accepted the documents produced by the appellants as covering the goods in question.
9. We find that there is no evidence produced by the Revenue reflecting upon the smuggled character of the goods in question. The law on the issue is well settled that in case of non-notified goods u/s 123 of Customs Act, the onus to prove that they have illegally entered the country lies very heavily upon the Revenue. The same has to be discharged by production of tangible and positive evidence by the Revenue. The goods after import become the part of the stock of identical goods already available in the country. Failure on the part of the person possessing such goods to establish that the same were legally imported cannot lead to ipso-facto conclusion that the same were smuggled. Reference in this regard can be made to Tribunal's decision in the case of Lajwanti D.Datwani reported in 2002(150)ELT156(Tri.-Mum.), in the case of Surya Traders reported in 2009(245) ELT368(Tri.-Del.), in the case of Rang Birangi Sarees (P) Ltd. reported in 2007(219)ELT574(Tri.-Kol.), in the case of Gul Tara Chand Kripalani reported in 2002(150)ELT1021(Tri.-Kol.) and in the case of Anand Agarwala reported in 2002(143)ELT75(Tri.-Kol.).
10. In as much as the Revenue has not produced any evidence on record to show that the velvet in question was illegally imported from China, before it became a part of the stock of identical goods in India, the confiscation of the same and imposition of penalty upon the appellants were not justified. We, accordingly, set aside the impugned order and allow the appeal with consequential relief to the appellants.