2019 (12) TMI 1427 - AT - Customs

Smuggling - Betel Nuts - burden to prove - appellant preferred appeal before learned Commissioner (Appeal) stating that the said betel nuts were purchased from M/s R.K. Enterprises, Kanpur and Chirag Enterprises, Lucknow and that the said betel nuts were not smuggled and the whole case was based on false statements and opportunity for cross-examination of various persons - HELD THAT - Learned Commissioner (Appeals) has observed that appellant had given a confessional statement on 02 February, 2016 that impugned goods were smuggled from Nepal and therefore, he has held that confiscation ordered by the Original Authority was sustainable. Learned Counsel for the appellant has submitted that the statement dated 02 February, 2016 was retracted and retracted statement was relied upon by learned Commissioner (Appeals) and once the statement was retracted the Original statement did not have evidential value. Learned A.R. has submitted that after retraction of statement the appellant was once again called by Revenue for tendering the statement and appellant did not turn up. In the circumstances of case, it is found that betel nuts are not covered by Section 123 of Customs Act, 1962. Therefore, onus was on Revenue to prove that the impugned goods were smuggled into India - the said onus has not been discharged by Revenue. There are no grounds to hold that the impugned goods were smuggled into India - Appeal allowed - decided in favor of appellant.

Summary

Issues: Confiscation of Betel Nuts, Allegation of Smuggling, Retraction of Confessional Statement, Burden of Proof on Revenue

In the judgment delivered by Hon'ble Mr. Anil G. Shakkarwar, Member (Technical) of the Appellate Tribunal CESTAT ALLAHABAD, the case revolved around the confiscation of 200 Bags of Betel Nuts belonging to the appellant, which were alleged to have been smuggled from Nepal. The Original Authority had confiscated the betel nuts and imposed a penalty on the appellant based on the belief that they were smuggled goods. The appellant contended that the betel nuts were purchased from legitimate sources and that the allegations were based on false statements, with the appellant being denied the opportunity for cross-examination by the Original Authority.

The learned Commissioner (Appeals) noted that the appellant had initially given a confessional statement on 02 February, 2016, admitting that the goods were indeed smuggled from Nepal. However, the appellant later retracted this statement. The Commissioner relied on the retracted statement to uphold the confiscation ordered by the Original Authority. The appellant argued that the retracted statement should not hold evidential value, especially after the appellant failed to appear for further statements as requested by the Revenue.

In the analysis, it was observed that betel nuts do not fall under Section 123 of the Customs Act, 1962, shifting the burden of proof onto the Revenue to establish that the goods were indeed smuggled into India. The judgment highlighted that the Revenue failed to discharge this onus, leading to the conclusion that there were insufficient grounds to support the claim that the betel nuts were smuggled into India. Consequently, the impugned order was set aside, and the appeal was allowed in favor of the appellant, who was deemed entitled to consequential relief as per the law.

This judgment underscores the importance of proper evidence and the burden of proof in cases involving allegations of smuggling, emphasizing the need for the Revenue to meet the required standard of proof to establish such claims conclusively. The retraction of a confessional statement and its evidential value were also significant factors considered in reaching the final decision in this case.