2005 (11) TMI 306 - AT - Customs

Confiscation - Smuggling - Seizure of betel nuts - Non-notified goods - HELD THAT - The goods in question are betel nuts which are not covered u/s 123 of the Customs Act 1962. I also find that the goods have been held to be smuggled based on some local trade opinion. However it is an admitted fact that the betel nuts in question are grown in Assam Meghalaya and its adjoining areas. But the Revenue could not be able to establish that the seized betel nuts are of foreign origin or smuggled. They could also not be able to produce any document relating to the smuggled activities. The whole order of the Commissioner (Appeals) has been passed on mere suspicion. Suspicion howsoever strong cannot take the place of proof. As such it is for the Revenue to prove by production of sufficient tangible evidence that the same had been smuggled into the country. They have not produced any evidence to this effect. Therefore I do not find that the Customs have discharged its obligation to prove that the betel nuts in question had been smuggled into the country. Thus the above-captioned three appeals filed by the two appellants and set aside the Orders passed by the Commissioner (Appeals). This Order is confined to the appellants who have come up in appeal before this Tribunal. The appeals are disposed of accordingly.

Summary

Issues:
Confiscation of betel nuts under Section 110 of the Customs Act, 1962.

Analysis:
The judgment involves three appeals concerning the confiscation of betel nuts under Section 110 of the Customs Act, 1962. Customs officers seized betel nuts, poppy seeds, etc., from different trains at railway stations suspecting them to be of third country origin and brought into India illegally. The goods were seized, and show cause notices were issued to various parties. The lower authority confiscated some betel nuts absolutely and allowed redemption on payment of fines in other cases. Appeals were filed before the Commissioner (Appeals), who confirmed the lower authorities' orders. The appellants challenged these decisions before the Tribunal.

The advocate for the appellants argued that the betel nuts were not covered under Section 123 of the Customs Act, shifting the burden of proof to the Department to establish that the goods were smuggled. The advocate contended that the Customs Authorities failed to prove that the goods were of foreign origin and relied on traders' opinions, which was deemed insufficient by citing various legal precedents. The Commissioner (Appeals) placed the burden on the appellants to prove the goods were not smuggled, which the advocate argued was incorrect.

The Revenue reiterated the lower authorities' findings, supporting the confiscation of the betel nuts. However, the Tribunal found that betel nuts were not covered under Section 123 of the Customs Act and were deemed smuggled based on local trade opinions, which was insufficient. The Tribunal highlighted that the burden of proof lies on the Revenue to establish with tangible evidence that the goods were indeed smuggled, which they failed to do. The Tribunal concluded that suspicion, no matter how strong, cannot replace proof, and since the Revenue did not provide sufficient evidence of smuggling, the appeals were allowed, and the orders of the Commissioner (Appeals) were set aside.