2018 (10) TMI 481 - AT - Customs

Confiscation of consignment - alleged Mis-declaration of imported goods - import of Garlic from Nepal - Bag containing Chinese inscription - Garlic in question was packed in plastic bags which had some Chinese inscription, Revenue entertained a view that the Garlic in question was of Chinese Origin and inasmuch as any third country origin goods are not allowed to be imported into India through Nepal. Held that - There is no dispute to the fact that the Garlic in question passed through the Land Customs, Sonauli and was duly assessed by the Customs Officer and cleared after payment of appropriate duty - apart from the fact that the writings on the bags have not been deciphered to find out as to what exactly is the meaning of the same, there is no other evidence on record to show that the Garlic in question was of Chinese Origin. The purchase bills produced by the appellants establish that the Garlic was purchased from Nepalese market. The appellants has further established that they had purchase the bags also from Nepal, which are reusable bags and the Garlic was stuffed in such bags and then imported. Merely the bags contained some inscriptions in Chinese language which have also not been deciphered by the Customs, the said fact cannot itself go to establish that the Garlic stuffed in such bags were of Chinese Origin - Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Confiscation of imported garlic
2. Imposition of penalty
3. Certificate of origin
4. Admissibility of appellant's statement
5. Rectification of mistake application
6. High Court's directions for re-decision

1. Confiscation of imported garlic:
The case involved the import of garlic from Nepal, which was seized by Customs Authorities due to suspicion of being of Chinese origin, prohibited for import through Nepal. Despite a certificate from Nepalese Customs confirming Nepalese origin, the Adjudicating Authority upheld the confiscation based on the appellant's admission of Chinese origin. The Tribunal initially confirmed the confiscation but reduced the penalty. However, upon reevaluation, it was found that there was insufficient evidence to prove Chinese origin, and the garlic was established to be of Nepalese origin, as supported by purchase bills and certificates. The Tribunal set aside the confiscation order, emphasizing the lack of concrete evidence supporting Chinese origin.

2. Imposition of penalty:
The initial penalty of ?2 lakhs imposed on the appellant was reduced to ?1 lakh by the Tribunal. The appellant argued for a further reduction or removal of the penalty based on evidence such as bills of entries, certificates of origin, and purchase documents. The Tribunal, after re-examining the evidence, found no justifiable reason to uphold the penalty. Consequently, the penalty was set aside along with the confiscation order, providing consequential relief to the appellant.

3. Certificate of origin:
The appellant presented a certificate from Nepalese Customs confirming the garlic's Nepalese origin, despite the presence of Chinese inscriptions on the bags. This certificate, along with other supporting documents, established the garlic's origin as Nepalese. The Tribunal emphasized the importance of considering such official certificates in determining the origin of imported goods, highlighting the clarity provided by the Nepalese Customs regarding the origin of the garlic.

4. Admissibility of appellant's statement:
The appellant's admission of the garlic being of Chinese origin was a crucial factor considered during the adjudication process. While the appellant later retracted this statement, the Tribunal deemed the retraction belated and upheld the confiscation based on the initial admission. However, upon further review, the Tribunal found that the evidence presented by the appellant contradicted the initial admission, leading to the dismissal of the confiscation and penalty, emphasizing the need for concrete evidence in such cases.

5. Rectification of mistake application:
The appellant filed a rectification of mistake application, arguing that certain key pieces of evidence were not adequately considered during the initial proceedings. The application was rejected, prompting the appellant to approach the High Court for redress. The High Court directed the Tribunal to re-decide the matter, emphasizing the importance of a comprehensive evaluation of all evidence presented. This directive led to a thorough re-examination of the case, resulting in the setting aside of the previous orders and a favorable outcome for the appellant.

6. High Court's directions for re-decision:
Following the appellant's appeal to the High Court, the Court directed the Tribunal to re-decide the case in line with the Court's order, stressing the need for a meticulous assessment of the evidence presented. The Tribunal, after re-evaluating the case and considering all relevant documents, found in favor of the appellant, setting aside the previous orders and providing consequential relief. This re-decision highlighted the significance of following judicial directives and ensuring a fair and thorough evaluation of all aspects of the case.

This detailed analysis of the judgment from the Appellate Tribunal CESTAT, Allahabad underscores the complex legal considerations involved in the confiscation of imported goods, imposition of penalties, the significance of official certificates of origin, the admissibility of statements, rectification procedures, and the impact of higher court directives on case outcomes.