G.P. Agarwal, Member (J)

1. Being dissatisfied with the confiscation of the seized 8 Sewing Machines with an option to redeem the same on payment of a redemption fine of Rs. 1,76,000/-, the appellants have filed their present appeal.

2. Factual backdrop : As a result of search of the business premises of the appellant firm on 4-7-1985, 8 pieces of Industrial Sewing Machines of Japanese origin in original packing valued at Rs. 1,76,000/- were recovered. Since Shri Sri Newas Gupta, partner of the appellant firm could not produce any valid documents regarding their licit importation/acquisition/possession, the said machines were seized under Section 110 of the Customs Act, 1962 in the reasonable belief that the same were liable to confiscation. Some documents were also seized. Statements of S/Shri Hari Niwas Gupta, Sri Niwas Gupta and R.K. Gupta, partners of the appellant firm were recorded. In his statement dated 23-12-1985 Shri R.K. Gupta inter alia stated that they had imported 43 sets of stitch machines through M/s. International Clothing Industries (P) Ltd., against bill of entry No. 1060/82 dated 3-5-1985; cash No. 1946 dated the 7th June, 1985; that the L/C had been opened by M/s. International Clothing Industries (P) Ltd., that the machines were then imported by the export house and cleared against additional licence No. 2855239 dated 20- 9-1985; that they (export house) had taken advance money from them; that after clearance the export house despatched the goods to their office as per their requirements. He further stated that out of the said 43 machines, 35 machines were sold by them and the rest 8 machines were seized by the authorities concerned. As a sequel thereof Shri Akshay Kejriwal, Director of the export house namely International Clothing Industries (P) Ltd., Bombay was also examined under Section 108 of the Customs Act. In his statement Shri Akshay Kejriwal stated that they had imported 43 sewing machines during 1984-85; that they had imported these machines on the advice of their broker who said that the appellant firm were interested in those pieces; that the goods were sent to the appellant firm on 14-6-1985 for sale to actual industrial users as per the import policy; that the appellant firm was to inform them (M/s. International Clothing Industries (P) Ltd.) on actual sale so that the sales invoice could be raised in the name of actual users and that to the best of his knowledge the appellant firm had not sold any machines and that though they had sold the Industrial Sewing Machines to the appellant firm they had not raised any sales invoices in their name as goods imported against export house additional licence could only be sold to actual users. Ultimately show cause notices were issued to the appellant firm and their partners calling upon them to show cause as to why the seized goods be not confiscated under Section 111 (O) of the Customs Act, 1962 and penalty be not imposed upon them under Section 112 of the said Act. In reply the appellant firm as well as their partners had stated that the goods were not exempted from any prohibition in respect of their import and were cleared against a valid Import Licence, and therefore, the provisions of the Section 111 were not attracted. It was further added that the goods were imported under a proper B/E by M/s. International Clothing Industries (P) Ltd., Bombay who were actual users and since the importers were the actual users, they could utilize the seized machines for their own use. During the personal hearing it was also contended that Custom duty amounting to Rs. 64,608/- was paid on the goods and the provisions of Section 111 (O) of the Customs Act could not be applied. It was also contended that the assessment order was valid unless reviewed. However the Collector of Customs who adjudicated the case did not agree with the said contentions of the appellants and ordered for the confiscation of the seized goods with an option to redeem the same on paym