2011 (11) TMI 662 - HC - Customs

Seizure of betel nuts - imported goods - whether smuggled goods or not? - onus of proof of foreign origin - Held that - so far the point of time at which reasonable belief should exist is concerned whenever the goods are seized the officer seizing the goods must at the time of seizure have a reasonable belief that the goods he was seizing were smuggled goods and any subsequent acquisition of knowledge of such belief would be of no avail. So far the allegation that betel nuts in question were of foreign origin is concerned a Division Bench of this court in case of Commissioner Custom Department Government of India Patnahad specifically held that it was not in dispute that betel nut was non-notified item and as such the onus to prove that the same was of foreign origin lay on Custom authority. In the instant case the Custom authorities did not at all consider the shape and size of the seized betel nuts nor there is any expert trade opinion that the seized betel nuts were in any manner different from the betel nuts available in the country. In the present case neither there is any trade opinion nor any significant decisive difference has been found and hence the seized betel nuts cannot be said with certainty to be of foreign origin - in view of absence of any material to show that the goods were smuggled goods or were of any third country origin the respondents authorities should not have detained the truck and betel nuts loaded on it nor they should have seized the same which acts are clearly violative of the well settled principles of law. Petition allowed - the impugned order of detention and seizure of the betel nuts and the truck on which it was loaded are hereby quashed - decided in favor of petitioner-importer.

Summary

Issues:
Seizure of betel nuts by Customs Department on the presumption of theft and third country origin.

Analysis:
The petitioners, a trader and a transporter, filed a writ petition to challenge the seizure of betel nuts by the Customs Department. The petitioners claimed that the betel nuts were purchased through proper channels and transported with all necessary documentation and fees paid. The truck carrying the consignment was stopped by individuals claiming to be police officials, who then seized the goods without providing any detention memo or seizure list. The driver of the truck was allegedly coerced into stating that the betel nuts were smuggled from Nepal. However, the petitioners argued that there was no prohibition on importing betel nuts from Nepal, as long as they were not imported to Nepal from a third country.

The petitioners contended that the value of the betel nuts was within the permissible range for import as per relevant regulations. They also argued that the authorities did not have sufficient grounds to seize the goods under the Customs Act. The petitioners highlighted that despite their attempts to obtain information and documentation from the authorities, they were not provided with the seizure list promptly, indicating nefarious intentions on the part of the respondents.

On the other hand, the respondents argued that the driver's statement led to the seizure of the goods, and the petitioners did not approach the authorities in a timely manner to address the issue. The respondents relied on the power granted to them under the Act to summon individuals and seize goods based on reasonable belief.

The court examined the circumstances of the seizure and found that the authorities had relied on baseless statements without considering the valid documentation provided by the petitioners. The court referenced legal precedents to emphasize that the seizure should be based on reasonable belief and supported by relevant material. It was concluded that the seizure of the betel nuts and the truck was unjustified and violated established legal principles.

In light of the arguments presented and the lack of substantial evidence to support the seizure, the court allowed the writ petition, quashed the order of detention and seizure, and directed the authorities to release the truck and the betel nuts immediately upon receipt of the court's order.