2015 (11) TMI 1639 - AT - Customs

Smuggling - cut betel nuts - whether or not cut betel nuts seized by the Revenue on 17-2-2013 are smuggled and are liable to confiscation for violation of the provisions of 111(c), 111(i) and 111(k) of the Customs Act, 1962? - Held that - Betel nuts is not a commodity notified u/s 123 of the Customs Act, 1962 and onus is on the department that seized goods were in fact smuggled into India. Movements of betel nuts was within India and appellant had produced certain documents how the seized goods were procured which is also corroborated by the persons whose statements are recorded. Simply finding some incoherence by presumption does not ipso facto make the seized betel nuts as smuggled goods. It is accordingly held that department is not able to discharge the onus that seized goods were of smuggled nature when appellants have produced the procuring documents, confirmed by their statements. The confiscation of 250 bags of the betel nuts upheld by the first appellate authority is not justified and is set aside. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Determination of whether the seized betel nuts were smuggled and liable for confiscation under Customs Act, 1962.

Detailed Analysis:
The case involved the seizure of betel nuts loaded on a truck, suspected to be of foreign origin, leading to discrepancies in the destination declared by the driver and on official documents. Statements from various individuals involved in the transportation chain were recorded, indicating the ownership and handling of the goods. The seized goods were found to be adulterated in a test conducted by the Central Food Laboratory, differing from the test report obtained at the time of import. The Customs authorities issued show cause notices for confiscation and penalties, leading to appeals before the Commissioner and subsequently to CESTAT.

The appellants argued that the time gap between the import and testing of the seized goods resulted in adulteration, citing previous cases and regulations related to food safety standards. They contended that betel nuts were not listed under specific regulations, challenging the presumption of smuggling by the first appellate authority.

The Revenue, represented by the Assistant Commissioner, defended the seizure based on the discrepancies between the samples tested at import and seizure, indicating that the seized goods were not covered by the bill of entry.

After considering the arguments and case records, the Tribunal analyzed the evidence and reasoning provided by the first appellate authority. It was observed that the time gap between the testing of imported and seized goods could lead to different test results, as acknowledged in a previous case. The Tribunal noted that the burden of proof lay with the Revenue to establish that the seized goods were smuggled, especially since betel nuts were not listed as a notified commodity under the Customs Act. The lack of concrete evidence supporting the smuggling allegations led the Tribunal to set aside the confiscation of the seized goods and allowed the appeals filed by the appellants.

In conclusion, the appeals filed by the appellants were allowed, with consequential reliefs granted as per the operative part of the order pronounced in court.