2014 (5) TMI 201 - AT - Customs

Seizure of betel nuts - Identification of Betel nut - Expert opinion - Levy of Penalty - Held That - The said expert person, gave his opinion about the foreign origin of the goods on the basis of visual examination of the betel nuts - However, no final opinion as regards the country of origin has been given by him - Relying upon Dinanath Maurya vs. CC Lucknow 2000 (11) TMI 580 - CEGAT, KOLKATA - Tribunal has observed that opinion of a local shopkeeper cannot be held to be an expert opinion and does not prove the foreign origin of the goods, beyond doubt - The Revenue in the present case apart from relying upon so called expert opinion as regards the foreign origin of the goods have not produced any evidence to establish the smuggled nature of the goods - It is not the case of the Revenue that betel nuts of foreign origin are not legally imported into India and the same are not available in the open market - As such, in the absence of any evidence to show that betel nuts in question were actually smuggled, the confiscation of the same cannot be upheld. Act of Cheating - Fake documents Unverified documents - Non-maintenace of accounts - Held That - Assessees have produced the Challan form M issued by Assam State Agriculture Marketing Board showing the purchase of betel nuts in question - Merely because the two different consignments of betel nut were purchased on two different dates, prior to the transportation of the same will not make such documents as fake - No verification of the said documents have been made by the department from the Assam State Agriculture Marketing Board - Betel nuts do not carry any identification marks so as to relate the consignment to be document produced by the appellants - As such, in the absence of any inquiry made by the Revenue from the issuing authority, Assam State Agriculture Marketing Board, rejection of the same on the sole ground that appellants have not maintained any accounts and held the said documents to be fake, is not proper on the part of the Commissioner (Appeals) Thus, the impugned order are set aside Decided in favour of assessee.

Summary

Issues:
1. Seizure and confiscation of betel nuts by DRI officers.
2. Expert opinion on the origin of the betel nuts.
3. Ownership claim and procurement documents of the betel nuts.
4. Confiscation and penalties imposed by the authorities.
5. Lack of evidence on foreign origin and smuggling of betel nuts.
6. Rejection of purchase documents by lower authorities.

Analysis:

1. The case involved the seizure and confiscation of 86 bags of betel nuts by DRI officers from a consignment of 285 bags booked by a trading company. The consignment was suspected to be of foreign origin and potentially smuggled.

2. An expert opinion by Shri Anand Agarwal suggested that the betel nuts were not of Indian or Nepali origin but could be from Indonesia, Myanmar, or Bangladesh. However, the Tribunal noted that the opinion lacked a definitive conclusion on the country of origin and cited precedents where local shopkeepers' opinions were not considered expert.

3. The trading company claimed ownership of the betel nuts, stating they were purchased from Assam and being transported to Delhi through authorized channels. They provided procurement documents, including a Challan form 'M' from the Assam State Agriculture Marketing Board, to support their claim.

4. The authorities confiscated the betel nuts and imposed penalties on the trading company and individuals involved. Despite the company's attempts to redeem the goods, the penalties and confiscation were upheld by the Commissioner and Commissioner (Appeals), leading to the appeals before the Tribunal.

5. The Tribunal found a lack of concrete evidence to prove the foreign origin and smuggling of the betel nuts. It highlighted the absence of substantial proof beyond the expert opinion and emphasized the distance and logistics involved in smuggling goods from different regions.

6. The rejection of the purchase documents by lower authorities was scrutinized by the Tribunal. It noted discrepancies in dates but reasoned that the documents being issued before the seizure did not necessarily indicate fraud. The Tribunal criticized the lack of verification by the Revenue from the issuing authority, leading to the rejection being deemed improper.

In conclusion, the Tribunal set aside the impugned orders, allowing the appeals and providing consequential relief to the appellants due to the lack of evidence establishing foreign origin, smuggling, and the rejection of purchase documents without proper verification.