2017 (12) TMI 401 - AT - Customs

Smuggling - betel nuts - the goods found on the trucks were of foreign origin, in the light of the prevailing trend of smuggling of betel nuts of foreign origin and in view of the fact that there was no supporting documents letter,invoice, challans import documents etc, the goods were confiscated - Held that - There is absolutely nothing on record to even remotely suggest that such goods are of foreign origin. Betel nuts is also not a commodity notified under Section 123 of the Customs Act, 1962 and hence, the onus is on the Department to prove that the goods are of foreign origin and smuggled in India. Further, there is no export or trade information from any knowledgeable person to indicate that the category or quality of the seized betel nuts are not found in India. Local movement of Betel Nuts and violation of any local laws regarding custody and movements of such goods cannot be made the basis for confiscation under Customs Act, 1962. Reliance placed in the case of Muruli Sandik, Jay Jayram Yadav, Jagarnath Yadav Versus Commissioner of Customs (Preventive) , Shillong 2016 (9) TMI 275 - CESTAT KOLKATA . Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Confiscation of betel nuts found in trucks.
2. Ownership claims and lack of supporting documents.
3. Allegation of goods being of foreign origin.
4. Legal burden of proof on Revenue.
5. Customs Act, 1962 applicability.
6. Similarity to previous Tribunal case.

Analysis:
1. The appeals challenged the Order-in-Original confiscating betel nuts loaded in two trucks intercepted by Customs officers. The drivers lacked documentation, leading to seizure based on suspicion of illegal import. Ownership claims were made, with one party disassociating from the goods, and another asserting ownership without proper NOC for transport.

2. Investigation revealed lapses in documentation and ownership claims. The Department issued a show cause notice, ultimately confiscating the goods due to suspicion of foreign origin and lack of supporting documents. The vehicles were also ordered for confiscation but allowed redemption upon payment of fines.

3. The core issue revolved around the alleged foreign origin of the seized goods. The Adjudicating Authority upheld confiscation citing a trend of smuggling, despite no concrete evidence of foreign origin. The onus was on the Revenue to prove foreign origin, as betel nuts were not listed under Section 123 of the Customs Act, 1962.

4. The Tribunal emphasized the legal burden on Revenue to prove smuggling, citing a lack of evidence in the present case. Previous Tribunal rulings highlighted the necessity of substantial proof beyond suspicion, especially in cases involving non-notified goods like betel nuts.

5. The Tribunal found no conclusive evidence of foreign origin and criticized the reliance on mere suspicion and local movements for confiscation. The lack of export or trade data supporting foreign origin further weakened the Revenue's case.

6. Drawing parallels to a previous Tribunal case with similar circumstances, the Tribunal overturned the impugned order, emphasizing the insufficiency of evidence to prove foreign origin. The judgment highlighted the importance of substantial proof in cases involving non-notified goods under the Customs Act, 1962.