2023 (3) TMI 1179 - AT - Customs

Smuggling - 7,000 Kgs of Black Pepper - foreign origin goods or not - burden to prove - confiscation alongwith penalty - HELD THAT - Admittedly, the Consignment of 7,000 kgs of Black Pepper were being transported under proper GST Invoices, E-Way Bills and under proper Consignment Notes. The seizure also was affected, not in any border area, but after traveling for three to four days from the place of origin i.e. Mizoram. The Appellant has demonstrated that all the transactions were carried through proper banking channels. The Seizure Report has provided the two witnesses. From the signatures, it looks as if they were not well educated, there is no detail of their address. The Recorded Statements on their own fail to corroborate the Department s case. When any statement is recorded under Section 108, it has been clarified by the High Court that when a person who has earlier given the statement before the Gazetted Officer should reiterate the same before the Adjudicating Authority in terms of Section 138B(1). Then only the Adjudicating Authority should admit the same as an evidence. After admitting as an evidence, he should allow these persons to be crossed-examined by the other party. In the present case, the statement itself was not recorded under Section 108. In the present case, as the statements have not been recorded in the terms of Section 108 nor the procedure specified under Section 138B(1) have been followed - The documentary evidence shown like GST Invoice, E-way Bill and Consignment Notes were available right at the time of Seizure and Department has not brought in any evidence to the effect that these are not legal documents. Once the Appellant is able to provide such documentary evidence, the burden of proving that the goods are of a foreign origin falls on the Department, which has not been done by them in the present case. The confiscation of 7000 kgs of Black Pepper is set aside along with penalties imposed on the Appellants - Appeal allowed.

Summary

Issues Involved:
Seizure and confiscation of black pepper, imposition of penalties, ownership claims, admissibility of evidence, foreign origin of goods.

Seizure and Confiscation of Black Pepper:
In a case involving the seizure of 7,000 kgs of black pepper valued at Rs. 49,00,000 from a vehicle, the Adjudicating Authority confiscated the goods and imposed penalties on the parties involved. The ownership of the black pepper was claimed by two different entities, leading to a legal dispute. The Appellants contested the seizure, arguing that the goods were legally purchased and transported with proper documentation, including GST invoices, E-way bills, and consignment notes. They also highlighted that the seizure occurred after several days of travel from the place of origin, Mizoram, and that the transactions were conducted through banking channels.

Admissibility of Evidence:
The Appellants raised concerns regarding the admissibility of evidence, particularly the recorded statements of various individuals involved in the case. They argued that the statements were not in compliance with Section 108 of the Customs Act, 1962, and cited legal precedents to support their claim. The Appellants contended that the Department's case was based on assumptions and presumptions, lacking concrete evidence to prove the foreign origin of the seized goods.

Foreign Origin of Goods:
The Department asserted that the seized goods had foreign markings, indicating their origin, and that statements from individuals suggested the goods were of foreign origin and being smuggled into India. However, the Tribunal found that the recorded statements did not sufficiently support the Department's case, as they lacked specific details regarding the foreign origin of the goods. The Tribunal emphasized the importance of following proper procedures for recording and admitting statements as evidence.

Judgment:
After considering the arguments presented by both sides, the Tribunal set aside the confiscation of the 7,000 kgs of black pepper and the penalties imposed on the Appellants. The Appeals were allowed, granting consequential relief to the parties involved. The Tribunal highlighted the significance of documentary evidence provided by the Appellants to establish the legality of the transactions and shifted the burden of proving the foreign origin of the goods back to the Department, which failed to meet that burden in this case.