2018 (3) TMI 1844 - AT - Customs

Smuggling - Betel Nuts - goods notified under Section 123 of CA or not - Confiscation - penalty - HELD THAT - There is no doubt that the impugned goods are not covered by Section 123 of Customs Act, 1962. Nevertheless, the claim of the appellant requires to be tested against the documentary evidence furnished by them and the gap between purported import of the goods and the purchase thereof cast doubts on the linkage between the two. Furthermore, it is questionable that the owners of the goods could have procured betel nuts on credit without knowing the suppliers before hand or having had transactions with them in the past. It appears that the adjudicating authority has correctly found that the inability to explain the purchase of the betel nuts is attributable to procurement of illegally imported goods. Furthermore, the Learned Counsel admitted that though the original consignee was well-known, the fresh consignee was not. That the goods were proceeding to a destination and to a consignee not known to appellant which is unacceptable. There are no merits in the appeal - appeal dismissed.

Summary

Issues:
Appeal against order-in-original regarding confiscation, redemption fine, and penalty under Customs Act, 1962.

Analysis:
The appeal was filed against an order-in-original by the Commissioner of Customs (Preventive), North Eastern Region, Shillong. The first appellant contested the confiscation, redemption fine, and penalty imposed under Section 112 of the Customs Act, 1962, while the second appellant challenged a penalty of ?1,00,000 under Section 112(b)(i) of the same Act. The case involved a consignment of 'betel nuts' seized on suspicion of being smuggled from Myanmar. The appellants claimed the goods were legally imported, supported by bills of entry, and argued that the authorities erred in deeming the goods as smuggled. They contended that the burden of proof was on the customs authorities to establish smuggling, emphasizing that the seized goods were in domestic movement and not covered under Section 123 of the Customs Act.

The Authorized Representative argued against accepting the appellants' documentary evidence, citing discrepancies in the timing of imports and the seizure. It was alleged that the consignment was fictitious, sourced close to the Indo-Myanmar border, and purchased on credit from an unknown party. Reference was made to a tribunal decision in a similar case. The tribunal noted that the cited decision was not relevant as it concerned procurement from local farmers, unlike the Myanmarese origin of the impugned goods. While acknowledging that the goods were not covered under Section 123, doubts were raised regarding the linkage between purported import and purchase due to timing discrepancies. The tribunal found the inability to explain the purchase of betel nuts as indicative of illegally imported goods, especially since the fresh consignee was unknown to the appellant. Lack of clarity in procurement and destination details led to the dismissal of the appeals, upholding the adjudicating authority's order.

In conclusion, the tribunal upheld the order of the adjudicating authority, dismissing both appeals. The decision was based on the inadequacy of explanations provided by the appellants regarding the procurement and destination of the goods, leading to the rejection of their claims and the affirmation of the original penalties and confiscation.