2018 (11) TMI 1534 - HC - Customs

Maintainability of Appeal under Section 130 of the Customs Act, 1962 - Smuggling - dry suprari (betel nuts) - goods were of foreign origin or not - Held that - It was for the revenue to discharge the onus regarding foreign origin of the seized goods (betel nuts). As the said goods (commodity) are not notified under Section 123 of the Customs Act, 1962 - True it is that the revenue has not produced any evidence scientific or otherwise to prove foreign origin of the seized goods. Betel nuts are also available in India, therefore, pre-condition for confiscation is that the goods must have been of foreign origin and must have been imported to India in a manner other than as prescribed by Customs Act so as to fall within the ambit of Section 111 of the Act of 1962. Appeal under Section 130 of the Act of 1962 has to be maintained only when substantial questions of law will arise for determination. The contention of learned counsel for the respondent that the learned Tribunal had not returned the finding regarding genuineness of the claim of the so called owner is in the realm of evidence so cannot be looked into in this appeal because it does not constitute substantial question of law. Thus, no substantial question of law arise for determination. That being so, appeal under Section 130 of the Act of 1962 is not worth to be entertained is accordingly dismissed.

Summary

Issues:
Appeal under Section 130 of the Customs Act, 1962 against the CESTAT order allowing Customs Appeal Nos.C/75050, 75051, 75052/2017 and setting aside the Commissioner of Customs' order confiscating betel nuts and vehicles.

Analysis:

1. Background of the Case:
- Two trucks loaded with betel nuts were seized by customs officers as the drivers failed to produce necessary documents. Claimants appeared, and ownership was disputed.
- The seized goods were concluded to be of foreign origin, leading to confiscation proceedings.

2. Order of the Commissioner of Customs:
- The Commissioner ordered absolute confiscation of the betel nuts and imposed penalties on individuals involved.
- Confiscation of vehicles was also ordered, with an option for redemption by paying fines within a specified period.

3. Appeal before CESTAT:
- Three appeals were filed challenging the Commissioner's order.
- CESTAT held that the revenue failed to prove foreign origin of the goods, emphasizing the onus on the department to establish such claims.

4. Judgment of CESTAT:
- CESTAT found no evidence suggesting foreign origin of the betel nuts, noting the absence of required proof under the Customs Act.
- It highlighted that local movement violations do not warrant confiscation under the Act.

5. Legal Analysis:
- The Tribunal rightly placed the burden of proof on the revenue to establish foreign origin, which was not met in this case.
- Lack of scientific evidence supporting foreign origin and the availability of betel nuts in India were crucial factors.
- The absence of a genuine claimant further weakened the case for confiscation.

6. Decision and Dismissal:
- The Court dismissed the appeal under Section 130 of the Customs Act, as no substantial legal questions were raised.
- The Tribunal's findings on the lack of proof for foreign origin and the revenue's failure to discharge the onus were upheld.

7. Conclusion:
- The judgment underscores the importance of meeting legal requirements for confiscation under the Customs Act.
- The burden of proof lies with the revenue to establish foreign origin, and lack of evidence can lead to dismissal of confiscation orders.