2019 (8) TMI 1043 - HC - Customs

Smuggling - Seizure of goods - place of origin of Betel Nuts - whether they are of foreign origin, or they have been purchased locally as asserted by the respondents before the authorities below? - HELD THAT - The CESTAT after considering all the material on record including the orders passed by the authorities below, have given a concurrent finding of fact that the Revenue could not establish the foreign origin of the betel nuts . The documents produced by the respondents indicated that the goods in question were purchased from local markets, and in support of the purchases they produced the market receipts which has not been doubted by the Revenue Authorities themselves at any stage of the proceedings. The report of the ARDF has also been held to be not reliable in as much as it could not be shown with any degree of certainty that the origin of the betel nuts could be established by testing in a laboratory, as is clear by the answer to the RTI query given by Directorate of Arecanut And Spice Development, Ministry of Agriculture and Farmers Welfare, Government of Kerala. The Revenue did not argue or place any material to indicate that the betel nuts in question were smuggled into India, even if, for a moment, it is assumed that they were of foreign origin, in order to sustain the order of confiscation and penalty. Appeal dismissed.

Summary

Issues:
1. Disbelief of test report determining the origin of betel nuts
2. Entertaining new evidence in appeal

Analysis:
1. The appellant challenged the order seizing betel nuts of Indonesian origin based on a report from ARDF. The Commissioner (Appeals) set aside the order-in-original, stating betel nuts were not properly imported. CESTAT upheld this decision, emphasizing the onus on the Revenue to prove smuggling, which was not established. The RTI reply and ARDF report's reliability were questioned, leading to dismissal of the Revenue's appeal. The appellant cited the need to rely on the ARDF report, emphasizing the Revenue's burden to establish facts with a degree of probability. The Court deemed the origin of betel nuts a factual issue, citing precedents on questions of fact and law. It concluded that the Revenue failed to prove foreign origin or smuggling, justifying the dismissal of the appeal.

2. The appellant argued that the ARDF report should have been relied upon to prove the betel nuts' foreign origin. However, the Court emphasized the need for the Revenue to establish facts with a degree of probability. The Court considered the factual matrix, noting the lack of evidence supporting smuggling allegations. The judgment in Collector of Customs Vs D. Bhoormull was deemed irrelevant, as the Revenue failed to prove the betel nuts' foreign origin convincingly. No other substantial questions of law were raised, leading to the dismissal of the appeal due to the absence of infirmities in the CESTAT judgment.