G.P. Agarwal, Member (J)

1. Not satisfied with the impugned Order passed by the Collector of Customs (Appeals), setting aside the order of confiscation and penalty passed by the Assistant Collector, the Revenue has filed the present appeal.

2. Factual backdrops: Preventive Staff on 20.6.82, apprehended the respondent after he had taken delivery of three bales from the Railway Station and on examination of the contents of these bales 333 pieces of garments of different textures, sizes, designs, and colours valued at Rs. 10,0467- were recovered. Since according to the Revenue the respondent failed to produce any evidence in support of the lawful acquisition/ possession etc., of the said goods, said to be of foreign origin, the same were seized. After the usual adjudication proceedings, the Assistant Collector ordered for the confiscation of the seized goods under Section 111 of the Customs Act, 1962 with an option to redeem the same on a payment of a redemption fine of Rs. 5,000/- in lieu of confiscation besides a personal penalty of Rs. 1,000/- under Section 112, ibid. Against this Order, the respondent went in appeal before the Collector of Customs (Appeals) New Delhi, who allowed the appeal and set aside the Order of confiscation and the penalty imposed inter-alia, holding that, according to the Assistant Collector himself, on examination of the garments in question no labels of foreign origin were found, but he concluded the seized garments to be of foreign origin by observing that the 'structure of the fabrics used' shows to be of foreign origin. This visual examination by the Assistant Collector did not find favour with the Lower Appellate Authority in the absence of any technical data, more particularly, as the very manufacturing processes are used in India as are used in abroad. Lower Appellate Authority also held that the burden was on the Department to prove that the goods were of smuggled nature since the provisions of Section 123 of Customs Act, 1962 or that of Chapter IV-A of that Act were neither relied upon in the Order of adjudication nor were cited in the Show Cause Notice.

3. The respondent has also filed the Cross Objections.

4. At the time of hearing, the respondent instead of entering into personal appearance, requested the case to be decided on the grounds taken in the Cross Objections. Accordingly, I perused the record and heard Smt. Nisha Chaturvedi, Learned SDR for the respondent.

5. Smt. Nisha Chaturvedi, Learned SDR for the appellant observed that since the garments in question were seized in pursuance of information and on a reasonable belief that the same had been imported into India in contravention of the provisions of different laws, it was for the respondent to prove that the garments in question were legally imported. She also cited "the decisions rendered in the case of State of Maharashtra v. Natwar Lal Damodar Pass, AIR 1980 SC Shah Chuman Mai v. State of Andhra Pradesh, 1983 ELT 1931 (SC) and Kanungo & Co., v. Collector. Customs, 1983 ELT 1486 (SC) by the hon'ble Supreme Court to show that even in cases where Section 123(1) of the Customs Act is not attracted, the prosecution discharges its burden by establishing circumstances from which a prudent person acting prudently, may infer that in all probabilities the goods in question were smuggled goods and the accused had the requisite knowledge, and that the Department is not required to prove its case with mathematical precision to a demonstrable degree and further that the burden of proof on the Department gets discharged by falsifying many particulars of the story put forward by the accused and the false denial could be relied upon for concluding that goods have been illegally imported. While elaborating her arguments, she submitted that the respondent initially took the defence that the garments were purchased from hawkers in Kali Market, Calcutta, but later on stated that he had purchased the same from M/s. Abdul Rashid and Saheb Khan, bot