1. Covering section 129D, with sections 128 and 128A of the Customs Act, 1962 and section 35E, with sections 35 and 35A, of the Central Excise Act, 1944 and section 85 of the Finance Act, 1994 - Appeals - By Department on review of orders. 

2. Appellant/Assessee was a trader of polyester yarn. 

3. An investigation was held in the premises of appellant and goods were as they looked to have been smuggled as per provision of Section 123 of the Customs Act, 1962. 

4. Accordingly, the Additional commissioner issued a show cause notice to the assessee demanding him to prove that he is innocent and has not smuggled the goods. 

5. As per the demand of show cause notice assessee produced all the challans, invoices, proof of payment for the goods and also the bank certificates etc. 

6. Thus, the additional commissioner dropped the show cause notice. 

7. Later, Additional commissioner was transferred and the joint commissioner replacing him reviewed the case. 

8. The Joint Commissioner could note that though the assessee had not smuggled the goods but his supplier had. 

9. Being aggrieved the Joint Commissioner filed an appeal with the Commissioner Appeals. 

10. Commissioner Appeals passed an order setting aside the order of dropping the show cause notice. 

11. Assessee being aggrieved filed an appeal before CESTAT, Mumbai. 

12. The CESTAT held that as Appellant is able to prove that he has procured the goods through proper channel, and the department has not initiated the proceedings against the his supplier, who has infact smuggled goods, the proceedings against the appellant are not sustainable and hence the impugned order deserves no merit. 

13.Ruled in favour of the Assessee.