Full Judgment
While one of them had loaded a national air-conditioner in his car and was carrying it away, the other stated that he was carrying the air-conditioner for testing before finalisation of transaction when Customs Preventive Officers reached the spot on 20-2-1984 after keeping surveillance on the premises. This also led to the recovery of seven more air-conditioners from the same premises. In the absence of any documents evidencing lawful import/possession/purchase/acquisition of these air-conditioners, the Customs Officer seized them under Section 110 of the Customs Act on the reasonable belief that they had been smuggled into the country in contravention of the restrictions imposed on their import into India. The appellant suddenly got ill and was taken away to the Doctor and did not turn up on that day. Although he was summoned on not less than four occasions between 24th February, 1984 and 7th March, 1984, the first time that he appeared in (espouse to the summons was on 8-3-1984 after 17 days of the seizure. In his statement, recorded on that day under Section 108 of the Customs Act, he admitted the recovery of the seized goods, accepted that he had advertised for sale of customs-paid air-conditioners in the newspaper and had purchased them from different persons in the Sunday Market which is held on the Ring Road against payment of Rs. 50,000/- in cash; that the air-conditioners were brought into India by these different persons under the Transfer of Residence Rules; that he had purchased these air-conditioners for selling them to other persons for monetary benefit; that he had no receipts or customs documents to show their legal purchase and that he did not know the names of the persons from whom he had purchased them.
2. Bridged. Jagged Singh (retired) and Dr. H.M.S. Salida, the two persons from whom one air-conditioner each was recovered while they were taking them away in their cars from the premises of the appellant stated that they had come to the appellant's premises in response to the newspaper advertisement. A receipt for Rs. 15,000/-, issued by one Magyar Hussein, was also recovered from Bridged. Jagged Singh. Although both these persons tried to give some explanation to indicate as if the transaction of sale had not taken place till the time the Customs Officers intercepted them, it is clear from the evidence, on record, that they had purchased the air-conditioners from the appellant in response to the newspaper advertisement. No documentary evidence of payment of customs duty on these air-conditioners was produced by the two customers at the time of their seizure.
3. It is only in reply to the show cause notice dated 13-12-1984 that the appellant submitted two baggage receipts evidencing import of the two National Air-Conditioners as baggage of two different passengers who arrived in India on 18-1-1984 and 18-2-1984. They also submitted three certificates dated 23-10-1983 and 25-10-1983 issued by M/s.
S.M.G. Beaty & Co., New Delhi certifying that the appellant had purchased seven Westing House Air-Conditioners from them as obsolete items in an auction held at the American Embassy. The appellant's defence is that the National Air-Conditioners were sent to him for repairs by the passengers concerned who brought them into India and the remaining were purchased by him in the auction of obsolete items of the American Embassy conducted by M/s. S.M.G. Beaty & Co., New Delhi. The Additional Collector has rejected the explanation of the appellant as well as the documents submitted by him alongwith his reply dated 13-12-1984 to the show cause notice on the ground that no documents were produced either at the time of seizure or later, when he appeared in response to summons on 8-3-1984. The adjudicating authority had also held that during the intervening period, the appellant managed to manipulate the receipt from M/s. S.M.G. Beaty & Co. for these air-conditioners and had also managed customs-paid receipts for the National Air-Conditioners purported to have been received for repairs.
4. Shri Suman Kapoor, the Ld. Counsel for the appellant complained during the hearing that the case had been heard by several different adjudicating authorities and it had taken more than four years for passing the order of confiscation. He also submitted that the burden of proof in the case of air-conditioners, which were neither notified under Section 123 of the Customs Act nor were covered by Chapter IVA, was squarely on the department which they had not discharged and, in these circumstances, whatever defence was produced by the appellant by way of documents should be accepted.
5. Shri G. Bhushan, the Ld. S.D.R., submitted that it was the appellant who had advertised in the newspaper for sale of customs-paid air-conditioners and, therefore, the burden of proving that the goods were not smuggled was squarely on him. He had not discharged this burden either at the time of seizure or later when he was summoned and the receipts were produced nine months after the seizure. He relied upon the decision of the Tribunal in the case of Collector of Customs and Central Excise, Chandigarh v. Shri Satnam Singh 1987 (27) E.L.T. 88 (Tri.) and Ballavdaga v. Collector of Customs 1991 (52) E.L.T. 251 (Tri.) and submitted that contradictory statements were made by the appellant about the goods. He had first stated that these were purchased from the Sunday Market. This defence was changed when the reply to the show cause notice was sent and certain receipts were produced. In these circumstances, the Tribunal had held that the defence could not be accepted.
6. We have carefully considered the appeal and the submissions made at the hearing.
7. The appellant had advertised in the newspaper for sale of customs duty-paid air-conditioners with a view to attracting customers so that the bona fide nature of the goods was not questioned by customers who were desirous of buying them. Having advertised in this manner it became obligatory on him to establish the licit nature of the goods and this meant that he took upon himself the responsibility of satisfying his buyers that the air-conditioners were duty-paid. If, in these circumstances, customs authorities decided to verify the correctness of this claim they were within their rights to demand the documents of payment of duty or lawful acquisition of the goods. While we agree that in normal circumstances the burden of proof in terms of Section 123 for an item like air-conditioners is on. the department, the appellant had, by his conduct in advertising for sale, taken this burden upon himself which he initially failed to discharge. The only question that can arise is whether even after having failed to support his claim till the issue of the show cause notice (six months later), the submission of certain documents issued by the auctioneer and two baggage receipts should be accepted as valid documents evidencing lawful acquisition of the air-conditioners. In the circumstances of this case, there is little doubt that the appellant had no evidence of legal acquisition of the air-conditioners when he advertised for their sale as customs duty-paid. The position of the documents, subsequently submitted by him, is discussed below: 8. So far as the baggage receipts are concerned, we observe that while receipt No. A 240807 dated 18-2-1984 for an amount of Rs. 12,925.00 paid as customs duty was issued to one Navneet Lal Dave of Bombay, receipt No. A 236866 dated 18-1-1984 was issued to another passenger (name not legible) of Distt. Trichur (Kerala) by Bombay Customs for the pieces of National Air-Conditioners on which duty was paid. The appellant's explanation is that Navneet Lal had brought his fridge for repairs to him, but had not cared to take it back after repairs. It is unbelievable that a fridge which was brought into India only two days ago and on which a large amount of customs duty was paid, needed repairs so soon after its import at Bombay and the passenger did not turn up for collecting it after repairs at all. Similarly, it is unbelievable that the passenger belonging to Distt. Trichur, which is located in Kerala and who had arrived at Bombay, should have left his fridge with the appellant at Delhi and not collected it. This explanation has rightly been rejected by the Additional Collector.
Similarly, the explanation with regard to the purchase of Westing House Air-conditioners from M/s. S.M.G. Beaty & Co. in an auction held several months before the date of seizure, was not forthcoming until nine months after the seizure. If these transactions had been bona fide, there is no reason why the documents should not have been produced on the spot or even later. If the allegation that the statement was recorded under duress, etc. is correct, the appellant could have subsequently sent the documents under cover of registered letter to the authorities. In the absence of bonafide conduct on the part of the appellant, who advertised that he had customs duty-paid air conditioners for sale, we do not consider that the goods were legally acquired by the appellant. In these circumstances, the appellant himself has chosen to take the burden of proving that his goods were lawfully imported and he has himself to squarely discharge it. We cannot be led to any other conclusion except that the contradictory stand taken by the appellant proves that the goods were not lawfully acquired and the order of confiscation was, therefore, rightly passed by the Additional Collector. By his conduct of offering to sell customs duty-paid goods for which he put an advertisement, the appellant had further compounded the matter. The imposition of penalty on him, in these circumstances, is also fully justified and we do not think that the penalty imposed was excessive. The appeal, therefore, fails and is dismissed.