Full Judgment
2. It is contended by the appellant that the goods were not notified under Section 123 of the Customs Act, 1962 and that therefore the burden of proof that they were smuggled which lie upon the Department has not been discharged. The fact that the appellant could not produce before the Department D.P. Khandelwal, who, he said, had supplied the goods, does not mean that the nature of the goods as having been smuggled has been established. Decisions of the Tribunal are cited in support.
3. The Departmental Representative contends that by the fact of the appellant having undertaken to produce Khandelwal, the burden of proof shifted to him, and that he has not since discharged that burden, the goods have rightly been confiscated. He points out the finding of the Collector (Appeals)' order that the importation of goods required a licence. He cites the Supreme Court decision in Kanungo and Company v.Collector of Customs 4. It is settled law that except with regard to the goods which are notified under Section 123, the burden of proof that they are smuggled is upon the Department. [See G.P. Shah v. Collector of Customs - 1986 (6) ECR 87; Hindustan Bearing Corporation v. Collector of Customs -1990 (50) E.L.T. 91 (Tri.). It is not contended that the goods in this case were notified under Section 123. Therefore, the burden of proving that the goods were smuggled lie on the Department. In the judgment of the Supreme Court cited by the Departmental Representative, the Supreme Court confirmed the finding of the Calcutta High Court that the burden of proving that the wrist watches which were seized from Kanungo and Company were lawfully imported and shifted to it after the Customs Department informed it of the result of the enquiry and in. estigation regarding the claim made by it with regard to it. The company had produced cash memos and vouchers in support of the claim that the watches had been legally acquired. Enquiries by the Customs confirmed that the vouchers produced were false and fictitious. It is in this context that the Calcutta High Court held that the burden of proof have been shifted.
5. In the present case, there is no question of the burden of proof having shifted. The burden would shift if the appellant had offered evidence to show importation or legal acquisition of the goods which evidence on enquiry was found to be false. The appellant had not, at any stage, said that he would produce such evidence. His statement is not available on record. From the reference to it in the orders of the Additional Collector and the Collector (Appeals) it appears that what the appellant said was that the goods were supplied to him in his capacity as a commission agent by D.P. Khandelwal and others. It would not be correct to say that the appellant'undertook to prove that the goods were legally imported, when he said that he would produce Khan-delwal. If the Department's plea had to be accepted, it would follow that by producing Khandelwal the appellant had produced evidence of lawful importation of the goods. This would obviously not be the case. Therefore, in this case the burden of proof has neither shifted to the appellant nor had he taken upon himself that burden. The ratio of the decision referred to above and many others that in case of the goods not notified under Section 123 [Chapter] IV A the burden of proof that the goods were legally imported falls on the Depart-ment and in the absence of such proof the goods cannot be confiscated, would therefore apply. The fact that the goods were restricted for import does not lead to the conclusion that they could not have been imported.
They could have been imported by persons holding licence for their import.