1. The appellant herein has been taken as a legal representative of Shri Harjeet Singh after the demise of the latter for pursuance of the appeal filed by late Shri Harjeet Singh.
2. Facts of the case are as follows :-
2.1. Preventive Officers of Customs, Kanpur, searched the residential premises of Shri Harjeet Singh. During the search two Video Cassette Recorders (VCRs) Model No. NV 300 and NV 340 Along with 46 video recorded cassettes all foreign origin valued at Rs. 37150/- in all were recovered. On demand, Shri Rana Singh, brother of late Shri Harjeet Singh produced two baggage receipts Nos. 148260 dated 27-8-83 in the name of Shri Shashi Bhushan from Delhi Airport and 216041 dated 30-01-84 issued in the name of Moosa Yusif Hussain from Bombay Airport. In support of lawful acquisition/possession of the said VCRs. He also produced two invoices Nos. 1515 dated 30-7-84 of M/s. Nam Dhari Electricals, Dewan Hall Road, Chandni Chowk, Delhi and another invoice No. S/51-0333 dated 7-7-84 of M/s. Video Sonics Company, defense Colony, New Delhi in support of the purchase of the 46 video cassettes. Shri Rana Singh also produced one sale deed dated 10-7-84 in support of lawful purchase of the VCR Model NV 340 from Moosa Yusif Hussain but he failed to produce any sale deed in respect of VCR Model NV 300 made in Japan. It was also alleged by the department in the show cause notice dated 22-2-85 that the invoices in respect of Video Cassettes were not found to be issued in respect of the cassettes of foreign origin and that the party could neither produced any proof of payment of Customs duty by them nor any sale deed in respect of the said VCR Model NV 300 made in Japan. The said foreign goods were, therefore, seized in the reasonable relief that the same had been acquired in contravention of the provisions of Section 11 of the Customs Act read with clause 3 of the Import (Control) Order No. 17/55 dated 7-12-55 issued under Section 3(i) of Import and Export (Control) Act, 1947. Shri Rana Singh in his statement recorded immediately after seizure admitted that the seized goods belonged to his brother Shri Harjeet Singh who was proprietor of M/s. Aman Video Club, Kaushalpuri, Kanpur. Shri Harjeet Singh claimed the ownership of the seized goods vide his statement dt. 20-2-85.
2.2 It was also alleged after perusal of the baggage receipts that both Shri Shashi Bhushan and Moosa Yusuf brought the VCR into India on 27-8- 83 and 30-1-84 respectively and they were not entitled to part with them in any manner in terms of the Baggage Rules; the sale of the VCRs, was, therefore, considered in contravention of the provisions of Rule 2(c) of Baggage (Conditions of Exemption) Rules, 1975 as amended. It was also alleged that the seized goods were notified goods under Section 11-B of the Customs Act and they were also notified under Section 123 ibid. Accordingly, the burden of proof that the goods were not smuggled was cast upon the notices namely Shri Harjeet Singh.
3. On due adjudication, the learned Additional Collector has absolutely confiscated the VCRs and the Video cassettes and has imposed a penalty of Rs. 5000/-.
4. The learned Advocate Shri M. D. Chaudhary, appearing for the appellant has urged that the goods were recovered from the residential premises. Evidence of their purchase/legal acquisition as well as legal importation was given by the appellant's brother Shri Rana Singh on the sport except in case of one VCR for which the sale deed from Shri Shashi Bhushan could not be given on account of its misplacement. He submitted that in view of the clear provisions of Section 11-G, provisions of Sections 11-C, 11-E, and 11-F shall not apply to the goods kept in the residential premises of a person for his personal use. The appellant had taken all precautions while purchasing the goods through a dalal by taking the baggage receipts from the persons who had imported the goods. Even the sale deeds were also taken; one of the sale deeds could not be produced because of its implacement. Similarly, the purchase receipts of video cassettes were also produced. Thereafter, the cassettes were recorded were recorded and the goods, therefore, have become of India origin. He has further urged that the learned Adjudicating Authority's action in discarding the sale deeds and the baggage receipts on the ground that one sale deed was not immediately produced and in the other case the seller was not known to the appellant (late Shri Harjeet Singh), is not correct. It is not necessary that the purchaser is required to know the seller. It is for this purpose that the goods are purchased through brokers and all precautions were taken by way of making the sale deed as well as procuring the original baggage receipts. In these circumstances, it cannot be held that the goods were illegally acquired or illegally imported. As regards the contravention of Baggage (Conditions of Exemption) Rules, he submits that the VCRs were imported on payment of duty as is apparent from the baggage receipts and therefore, the aforesaid rules do not apply to the transfer of these goods. On a query from the Bench that the sale of the VCRs has been in contravention of the relevant ITC Public Notice have not been invoked in the show cause notice. In view of the foregoing submissions, he submits that the goods be released unconditionally; even if there is any fault in sale of the goods by the two importers namely Shashi Bhushan and Moosa Yusuf, the fault lies with them and the appellant cannot be penalised either by way of confiscation of goods or by way of penalty for the fault of others.
5. Learned SDR, on the other hand, points out that she finds a letter from the respondent - Collector available in the file which throws a doubt on the genuineness of the baggage receipt issued in the name of Moosa Yusuf from Bombay Customs Airport. In view of this letter she urges that the case of this VCR should at least be remanded for further consideration. In other respects, she, however, reiterates the findings of the lower authority.
6. The learned Advocate opposing the plea of the learned SDR states that no evidence can be brought at this stage. Further no application for bringing any evidence on record has so far been made. This request has come only during the course of argument.
7. We have carefully considered the pleas advanced on both sides. I find from the evidence on record that late Shri Harjeet Singh was running a business in the name of M/s. Aman Video Club as referred to above. Therefore, the goods, though recovered from the residential premises, do not come within the protection of Section 11-G of the Customs Act inasmuch as the goods could not be said to have been used for the purpose of personal use referred to in Section 11G(1)(b). Nevertheless, I find that there is sufficient evidence on record that the goods were imported through baggage by two persons on payment of duty and they effected in turn the sale of the VCRs to late Shri Harjeet Singh for which he not only procured the baggage receipts but also got the sale deeds. The observation of the learned Adjudicating Authority in discarding the said evidence to the effect that the transaction was effected between unknown persons, is not tenable. It is not necessary that sale or purchase must be through two known persons. In the facts and circumstances of this case, there is no doubt that the two VCRs were imported legally on payment of duty and these have also been purchased by Shri Harjeet Singh on payment of adequate consideration. The two VCRs, no doubt, remain liable to confiscation because they were sold in contravention of the ITC Public Notice/regulations before the stipulated period of 5 years of the date of importation. Omission to invoke ITC Public Notice in the show cause notice does not vitiate the contravention in respect of VCRs. However, the primary fault for sale lies on the sellers. For this purpose it would meet the ends of justice if a nominal redemption fine in lieu of confiscation of the VCRs is imposed. I, therefore, upheld the confiscation of the VCRs, according to the baggage receipts produced, being Rs. 8000/-. The absolute confiscation in the facts and circumstances of this case is not at all justified because the goods cannot be said to have been illegally imported.
8. As regards the video cassettes, I observe that the allegation that the Video Sonics Company repudiated their invoice dated 7-7-84, has not been made in the show cause notice. Therefore, the invoice of Video Sonics Co. could not de discarded on that basis. The Adjudicating Authority's other reason for discarding the invoices in respect of Video Cassettes is that the invoices do not indicate that the tapes sold by M/s. Namdhari Electricals and M/s. Video Sonics Company are of foreign origin and in the absence of any indication to that effect on the invoices themselves, the learned Adjudicating Authority has found that the two invoices could not be correlated to the video cassettes in question seized from the residence of the appellants. The learned Advocate, on the other hand, urges that the cassettes after they were recorded no longer remain foreign goods and therefore, they are not liable to confiscation. I am inclined to agree with the observation of the learned Adjudicating Authority in this respect. Recording of video cassettes is merely the change of form of the imported goods. If the video cassettes are not otherwise proved to have been legally imported the mere fact that they were recorded subsequently will not take away their smuggled character. They are liable to confiscation under Section 120 of the Customs Act sub- section (1) of which provides the smuggled goods may be confiscated notwithstanding any change in their form. As rightly pointed out by the learned Adjudicating Authority the invoices produced by the appellant do not indicate that the cassettes purchased by the appellant are not of foreign. It has to be assumed that the said invoices do not cover the video cassettes in question. Video cassettes are also notified under Section 123 of the Customs Act. Therefore, the burden to prove that they are not smuggled lies on the appellant. That burden in the instant case has not been discharged. Accordingly, the video cassettes are liable to confiscation and no apparent reasons have been advanced by the learned Advocate for their release on payment of redemption fine. In the circumstances, I uphold the confiscation of the video cassettes.
8.1. As regards the penalty, having regard to the facts and circumstances of the case, I reduce it to Rs. 1000/- from Rs. 5000/-.
9. Appeal is disposed of on the above terms.