Electrical Distributors vs Collector of Customs

T.P. Nambiar, Member (J)

These are two appeals filed by the above-captioned appellants under Section 129A of the Customs Act, 1962 against the order-in-appeal No. Cal-Cus/854-856/88 dated 19-5-1988 passed by the learned Collector of Customs (Appeals), Calcutta. In terms of that order he confirmed the order passed by the learned Deputy Collector of Customs (Prev.), Calcutta, wherein he confiscated 11 Stereo Radio Cassette Recorders seized from the premises of the appellants.

The facts of the cases are that on an information received on 29-10-1986 the officers of the Customs Department made a search as a result of which six pieces of Stereo Radio Cassette Recorders and 450 pieces of blank Video Cassettes from the shop of M/s. Electrical Distributors, 27, Vivekananda Road, Calcutta-7 and five pieces of Stereo Cassette Recorders and one piece of Video Cassette Recorder (old) from the shop of Messrs Central Plaza, 5B, Rawdon Street, Calcutta-17, were recovered. The documents could not be produced by the parties and therefore, on a reasonable belief that these are smuggled goods they were seized. A show cause notice was issued contending as to why these should not be confiscated and the appellants furnished the reply. After adjudication, the learned Deputy Collector confiscated 11 Stereo Radio Cassette Recorders and 450 pieces of blank Video Cassettes. In appeal, the learned Collector confirmed the confiscation of 11 Stereo Radio Cassette Recorders, but set aside the order for confiscation of 450 pieces of blank Video Cassettes and remanded the case for consideration afresh. Against the confiscation of 11 Stereo Radio Cassette Recorders the present appeals are filed. Further, the appeal is filed against the imposition of penalty of Rs. 5,000.00. The learned Advocate, Shri Ashish Roy appearing for the appellants contended that the appellants had assembled foreign-made parts and these Stereo Radio Cassette Recorders were Indian assembled goods. He contended that from the Purchase Challan dated 20-10-1986 of M/s. Usha Electronics it is evident that six pieces of Stereo Radio Cassette Recorders were sold by them to M/s. Electrical Distributors. So also he contended that from Challan No. 017 dated 7-10-1986 issued by M/s. Sound Machine of 178A, S.P. Mukherjee Road, Calcutta. 30 pieces of Stereo Radio Cassette Recorders were sold to M/s. Usha Electronics at a total consideration of Rs. 33,000.00. Therefore, it was contended that out of those thirty pieces of Stereo Radio Cassette Recorders six pieces were sold to the appellants. It was also contended that the finding of the learned Deputy Collector that the firm, M/s. Sound Machine is not in existence is not correct. He also contended that Stereo Radio Cassette Recorders are manufactured and assembled from imported foreign components and it is obvious that the country of origin marked on the components shall remain as embossed and the same cannot be erased. It was, therefore, contended that because of that, it cannot be said that these Stereo Radio Cassette Recorders were smuggled ones. The learned Advocate also contended that stickers were pasted on the same by the Indian assemblers on the top of such embossment. In this case, the stickers were removed by the Central Excise authorities and there was a mark left on the seized Stereo Radio Cassette Recorders for having removed such stickers. He also produced the Trade Licence No. 14525 dated 17-7-1986 issued in favour of M/s. Sound Machine by the Calcutta Municipal Corporation and a Certificate of Central Excise authorities confirming that M/s. Sound Machine were exempted from excise formalities. The learned S.D.R., Shri M.N. Biswas contended that all these 11 Stereo Radio Cassette Recorders bore foreign markings clearly indicating that they were made in Japan i.e. marked as ''made in Japan''. He also contended that the case of the appellants that these Cassette Recorders have been assembled in India out of imported components bearing the markings "made in Japan" cannot be accepted. It was also his contention that when only components are imported for assembling Radio Cassette Recorders such components will not bear the markings. It was, therefore, contended that such markings are there on those components where complete Radio Cassette Recorders are imported from Japan. It was also contended that enquiry was made by the Central Excise authorities at the address of M/s. Sound Machine and it was revealed that no such firm existed. Therefore, he contended that the case of the appellants is not true and he also brought to my notice that this fact was alleged in the show cause notice. It was, therefore, contended that these Cassette Recorders are liable for confiscation under Sections 111(d) and 111(p) of the Customs Act, 1962. It was also contended that the very licence now produced was not produced before the Collector or the Deputy Collector. He also brought to my notice that the seizure list in this case pointed out the description of these Radio Cassette Recorders were made in Japan. For all the above-said reasons he contended that the appeals are liable to be dismissed.

The point that arises for my determination is whether the confiscation of the Stereo Cassette Recorders is in accordance with law. In this connection, the learned Advocate, Shri A. Roy relied on a decision of this Tribunal passed in Order No. 55/Cal/90 dated 18-1-1990. In that case, the Tribunal held as follows : "Now it is common knowledge that these electronic goods are being brought in the form of different parts in the country and they are assembled here. The Appellant has also produced two invoices of Casetella Trading Co. Ltd. dated 9-9-1982 and 23-9-1982 respectively made out in the name of Central Electronic Industries and this Co. is based in Hong Kong. As per the first invoice 500 sets plastic moulded extruded cabinet top and bottom with packing material have been sold and by the second invoice 500 pieces of Tape Deck Mechanism and 500 sets volume control are sold. The Appellant has also produced bills of entries for home consumption filed by the Central Electronic Industries before Excise Authorities. Now when the appellant has produced documentary evidence to show their purchases then instead of relying upon the discrepancy in numbers etc. the Department should have made further enquiry with the suppliers to find out whether the goods in question are the same which were sold by them to the appellant. It is true that initially the appellant has to show that the goods are not smuggled ones but once they produce documentary evidence it is for the Department to show that the same is not reliable. If these different parts are simply assembled in India then the assembler or in the technical sense manufacturer would put stickers to show that they were made in India. Non-mentioning of serial numbers on the body or the carton may at the most raise suspicion but it cannot prove that the goods are not assembled in India and, supplied to the appellant. Non-mentioning of the word "Panasonic" may be mere omission also."

It was, therefore, contended that the appellants had produced the purchase challan from M/s. Usha Electronics to show that six pieces of Stereo Radio Cassette Recorders were sold to them by Messrs Usha Electronics. Usha Electronics purchased 30 pieces of Stereo Radio Cassette Recorders from M/s. Sound Machine as per the Challan dated 7-10-1986. In the circumstances of the cases I allowed the appellants to produce the documents with respect to the licence and the certificate issued by the Superintendent of Central Excises, Calcutta ''B'' Division. As per the Licence No. 14525 issued by the Calcutta Municipal Corporation it is seen that the licence is issued to M/s. Sound Machine for carrying on business at 178A, S.P. Mukherjee Road for assembling these Stereo Cassette Recorders. The Certificate issued by the Superintendent of Central Excise dated 11-1986 shows that M/s. Sound Machine at 178A, S.P. Mukherjee Road, Calcutta was manufacturing Radio-cum-Tape Recorder and they have submitted a declaration on 8-8-1986 to avail of the benefit of exemption under Notification No. 175/86 and they were allowed to avail of the exemption upto the clearance value of Rs. 7.5 lakhs. It is true that initially the appellants have to show that the goods are not smuggled ones. But once when they have produced this evidence it is for the Department to show that the same is not reliable. The finding that M/s. Sound Machine is not in existence is not a correct finding, in view of the above records which are before me. In view of the production of the Purchase Challan dated 20-10-1986 issued by M/s. Usha Electronics with respect to six pieces of Stereo Radio Cassette Recorders and in view of the above reasonings the confiscation of the same cannot be upheld. The benefit of doubt should be given to the appellants, M/s. Electrical Distributors as far as these six Radio Cassette Recorders are concerned. In such circumstances, I hereby order that the six pieces of Radio Cassette Recorders seized in the above case from the premises of M/s. Electrical Distributors be released in their favour. Consequently, the imposition of penalty of Rs. 5,000.00 is also set aside. Accordingly, the Appeal No. C-484/88 is allowed. As far as the appellants, M/s. Central Plaza are concerned the challan No. 017 dated 7-10-1986 issued by M/s. Sound Machine shows that they have sold to M/s. Usha Electronics 30 pieces of Stereo Radio Cassette Recorders. M/s. Sound Machine sold five of them to the appellants, M/s. Central Plaza. For the same reason which I have already discussed while discussing the case of Electrical Distributors the benefit of doubt is extended to the appellants, M/s. Central Plaza and accordingly, it is hereby ordered that the five Stereo Radio Cassette Recorders be returned to them and the penalty of Rs. 2500/- imposed on them is hereby also set aside. In the result, both the above-captioned appeals are allowed.