Kanha Vanaspati Ltd. Vs. Commissioner of Customs - Court Judgment

Excerpt:
1. appellants filed this appeal against the adjudication order whereby the amount of rs. 69.03 lakhs was confiscated under section 121 of the customs act, 1962.2. brief facts of the case are that the appellants purchased the goods imported by m/s. associated industries for rs. 5,35,23,958/- and paid only rs. 4,66,20,969/-, the balance of rs. 69,02,969/- were still to be paid by the appellants. the matter was investigated by the revenue authority and it was found that goods were imported against advance licences produced by m/s. associated industries which were found to be bogus. actually no advance licence was issued by the authority against which the goods were imported. m/s. associated industries were also found to be a bogus firm. during the investigation the appellants deposited the.....

Judgment:
1. Appellants filed this appeal against the adjudication order whereby the amount of Rs. 69.03 lakhs was confiscated under Section 121 of the Customs Act, 1962.

2. Brief facts of the case are that the appellants purchased the goods imported by M/s. Associated Industries for Rs. 5,35,23,958/- and paid only Rs. 4,66,20,969/-, the balance of Rs. 69,02,969/- were still to be paid by the appellants. The matter was investigated by the Revenue authority and it was found that goods were imported against advance licences produced by M/s. Associated Industries which were found to be bogus. Actually no advance licence was issued by the authority against which the goods were imported. M/s. Associated Industries were also found to be a bogus firm. During the investigation the appellants deposited the amount of Rs. 69.03 lakhs which were confiscated by the adjudicating authority.

4. The contention of the appellant is that amounts in question were confiscated under Section 121 of the Customs Act as a sale proceedings of smuggled goods. Appellants were bona fide purchaser of the goods and they had paid more than Rs. 4 crores to the seller of the goods. The appellants were not aware of the fact that the goods were imported in contravention to the provisions of Customs Act or the goods were smuggled in nature. Therefore, the amount deposited by the appellant cannot be confiscated.

5. Learned SDR appearing on behalf of the Revenue submitted that the goods were imported against non-existence advance licence and M/s.

Associated Industries is also not traceable. Therefore, the goods imported against such licences are smuggled in nature and the amount in question is the sale proceed of the smuggled goods.

6. We find that the appellants are challenging the confiscation under Section 121 of the Customs Act. The Section 121 of the Customs Act provides that where any smuggled goods are sold by a person having knowledge or reason to believe that goods are smuggled goods, the sale proceed thereof shall be liable to confiscation.

7. In the present case the goods were imported by M/s. Associated Industries against the advance licences which were, found to be bogus or forged. Therefore, M/s. Associated Industries were in the knowledge that the goods were of smuggled nature and the goods were sold to the present appellant. The amount in question is in respect of sale proceed of the goods which were smuggled by M/s. Associated Industries. We are concerned with the sale proceed which definitely are in respect of the sale of smuggled goods. Therefore, the Commissioner rightly confiscated the amount in question under Section 121 of the Customs Act. The appeal is dismissed.