2020 (1) TMI 549 - AT - Customs

Smuggling goods to Nepal - Release of seized goods - seizure of misc. cloth items - violation of the provisions of Sections 7,11, and 50 of the Customs Act, 1962 - allegation that the occupants of the vehicles failed to produce any documentary evidence for legal possession of the goods - HELD THAT - Since the impugned seized goods are not notified under Section 123 of Customs Act, 1962, the burden of proof is on the department - In the instant case, the department appears to have failed to provide the circumstantial evidence to prove the attempt of illegal export. The Adjudicating Authority appears to have rightly cited the cases of Hon ble Patna High Court in the case of Commissioner of Customs, Patna Vs. Manish Kakrania 2012 (5) TMI 722 - PATNA HIGH COURT wherein the Hon ble High Court has held that in cases of smuggling the burden of proof to a demonstrable degree lies on the Department. Such burden would be shifted to other person only if circumstances such as place and condition of goods, manner of packing, labeling, transportation, prima facie indicate smuggled nature of goods - In absence of such circumstances and further absence of any other evidence, confiscation of goods and penalties is not sustainable. In the present case, because of inconsistencies in the process of seizure, as is evident from the records of seizure memo and panchnama, even the place of seizure and process of attempt to export illegally cannot be made out with credibility. Thus it appears that the department failed to justify the seizures. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Seizure of misc. cloth items valued at ?25,60,594 on account of violation of Customs Act, 1962 and FTDR Act, 1992.

Analysis:
1. Seizure and Investigation: The case involved the seizure of misc. cloth items loaded on two pick-up vans near the Indo-Nepal border. The SSB personnel intercepted the vehicles suspecting illegal transportation to Nepal. Statements of the occupants and the owner of the goods were recorded during the investigation under Sections 108 and 110 of the Customs Act, 1962.

2. Ownership and Export Claims: The owner of the goods claimed lawful possession and explained the purpose of transporting the goods to Bhithamore LCS for export formalities. However, discrepancies arose when the Bills of Exports claimed to have been filed were found to belong to another exporter. The genuineness of the bills was questioned, but the owner defended their authenticity with the confirmation from the supplier.

3. Adjudication and Appeal: The Adjudicator found no merit in the charges, citing the non-notified status of the goods under Section 123 of the Act and inconsistencies in the seizure memo and panchnama. The Ld. Commissioner (Appeals) quashed the original order but was reviewed and overturned by the competent authority, leading to an appeal before the Commissioner.

4. Order-in-Appeal: The Ld. Commissioner (Appeals) confirmed the confiscation of the seized goods and vehicles under relevant sections of the Act. Redemption options were provided to the owners for the goods and vehicles upon payment of specified amounts. Penalties were imposed on some noticees while others were exempted due to minimal involvement.

5. Appellate Tribunal Decision: The Appellate Tribunal reviewed the case and found discrepancies in the seizure process, lack of justification in the Commissioner's order, and failure of the department to provide circumstantial evidence for illegal export attempt. Citing precedents and burden of proof, the Tribunal upheld the Adjudication order, setting aside the Commissioner's decision and allowing the appeals filed by the appellants.

In conclusion, the Appellate Tribunal's decision highlighted procedural inconsistencies, lack of evidence, and failure to meet the burden of proof by the department, leading to the allowance of the appeals and consequential relief for the appellants.