S. Kalyanam, Member (J)

1. Since the above appeals arise out of a common order of the Additional Collector of Customs, Madras, dated 28-2-1985 and relate to a single transaction and mutually connected, they are taken up together and disposed of by this order.

2. The appeals are directed against the order of the Additional Collector of Customs, Madras, referred to supra, absolutely confiscating 96,000 Nos. of YKK brand zip fasteners of foreign origin, valued at Rs. 96,000/- c.i.f. under Section 111(d) of the Customs Act, 1962, hereinafter referred to as the 'Act', read with Section 3(2) of the Imports and Exports (Control) Act, 1947, besides imposition of a penalty of Rs. 50,000/- on Jethmal, proprietor of M/s. Jain Enterprises and Rs. 15,000/- on appellant Raichand under Section 112 of the Act.

3. On 27-1-1984 the Customs authorities on the basis of prior intelligence searched the residential premises of Jethmal, proprietor of M/s. Jain Enterprises, appellant herein, at No. 12, Thandavaraya Pillai Street, Madras-1. The search resulted in the recovery of 8 wooden cases covered with gunny bags which on opening and examination were found to contain 96,000 Nos. of 8" YKK brand zip fasteners of foreign origin. Jethmal was not present at that time but his brother Raichand, one of the appellants herein, was present. Since Raichand could not satisfactorily account for the licit origin or legal acquisition of the zips in question, they were seized under mahazar as per law attested by witnesses. Appellant Raichand gave a statement before the authorities on 27-1-1984 stating that his brother Jethmal is the owner of M/s. Jain Enterprises, the appellant herein and that he (Raichand) is employed under his brother and the goods under seizure were purchased out of the money given to him (Raichand) by his brother. Raichand further admitted that the goods under seizure were delivered at his instance by a broker from Burma Bazaar on 24-1-1984 at about 8 P.M. and the goods under seizure were of foreign origin and not covered by any bills. Raichand also admitted that the goods were meant for being despatched to Calcutta for purpose of sale. It is in these circumstances, after further investigation, proceedings were instituted against the appellants which ultimately culminated in the impugned order now appealed against.

4. Shri P.C. Rajappa, the learned advocate appearing for appellant Jain Enterprises submitted that the goods under seizure at the relevant time were not notified under Section 123 of the Act and so the burden is on the Department to prove and establish that the goods are of foreign origin and that they were smuggled into the country. The Department it was contended, has not discharged the initial burden cast on it under law and so the impugned order was assailed as not legally tenable. It was further urged that the inculpatory statement recorded from the appellant's brother Raichand (the other appellant herein), does not implicate Jain Enterprises and further the inculpatory statement of Raichand was resiled from on 30-1-1984 and in such a situation, it was contended that the goods cannot be confiscated nor penalty levied without any corroboration of the earlier retracted confessional statement of Raichand. The learned counsel also contended that the appellant by letter dated 30-1-1984 informed the authorities that the goods under seizure were purchased by the appellant from Veerchand Surajmal and Co., under cash bill No. 1642 dated 10-1-1984 and Veerchand Surajmal Co. themselves have purchased the goods from M/s. Murray Co., under bill No. 1487 dated 17-6-1983. Since the goods under seizure are covered by valid purchase vouchers, it was urged that they are not liable for confiscation. The learned counsel also assailed the finding in the impugned order that the purchase bill of the appellant dated 10-1-84 does not refer to any size of the zip and urged that mere omission to mention the size of zips in the purchase bill of the a