2016 (9) TMI 275 - AT - Customs

Confiscation of seized betel nuts - Section 111(b) of the Customs Act, 1962 imposition of redemption fine - section 125 of the Customs Act, 1962 imposition of penalty - Section 112(b)(ii) of the Customs Act, 1962 demand of duty - Section 125(2) of the Customs Act, 1962 whether 521 bags of betel nuts are of foreign origin and smuggled into India, so as to attract confiscation, fine and penalty ? Held that - the case is already decided in Maqsood ALam vs.- Commr. of Customs, Lucknow 2015 (5) TMI 131 - CESTAT NEW DELHI where it was held that the onus to prove that the goods are of foreign origin and are smuggled is squarely on Revenue and this onus cannot be discharged merely on the basis of suspicion - there is no evidence that seized goods claimed by the appellants were of foreign origin and smuggled into India. Also, appellants have produced documents indicating procurement of Betel Nuts. Any impropriety in the documentation for local movement of goods, under the local laws, cannot make the goods liable to confiscation under Section 111(b) of the Customs Act, 1962 imposition of redemption fine, penalty and duty unjustified appeal disposed off decided in favor of appellant.

Summary

Issues:
1. Confiscation of seized betel nuts and imposition of fines and penalties under the Customs Act, 1962.

Analysis:
1. The appeals were filed against the Order-in-Original passed by the Commissioner of Customs, North East Region, which ordered the confiscation of seized betel nuts and imposed fines and penalties on the appellants under various sections of the Customs Act, 1962. The appellants argued that the seized goods were not of foreign origin and were not smuggled into India. They submitted various documents to support their claim, including Form-K, Form-M, and railway receipts. The Adjudicating Authority focused on the lack of trade license and sale/cash memos as grounds for confiscation, disregarding the evidence provided by the appellants. The appellants contended that the burden of proof was on the department to establish that the goods were of foreign origin and smuggled into India. They cited relevant case laws to support their argument.

2. The Revenue argued that the appellants failed to produce necessary documents regarding the purchase of the seized goods, and the forms submitted did not match the recovered/seized goods. The Adjudicating Authority's findings were reiterated by the Revenue.

3. The core issue in the appeals was whether the seized betel nuts were of foreign origin and smuggled into India. The show cause notice did not specify that the goods came into India from across the border. The Adjudicating Authority's decision was based on a belief rather than concrete evidence of foreign origin. The burden of proof was on the Revenue to establish the goods' foreign origin and smuggling. The appellants provided evidence of local procurement of betel nuts, and any deficiencies in local documentation could not justify confiscation under the Customs Act, 1962. Reference was made to a similar case decided by CESTAT, Delhi, emphasizing the onus on the Revenue to prove smuggling in cases of non-notified goods.

4. Considering the lack of evidence proving the seized goods were of foreign origin and smuggled into India, the appeals were allowed, and the Order-in-Original was set aside. The appellants were granted consequential relief.

This detailed analysis highlights the key arguments, legal principles, and findings of the judgment, providing a comprehensive understanding of the case and its implications under the Customs Act, 1962.