2023 (4) TMI 834 - AT - Customs

Smuggling - Confiscation - Yellow peas - Motor Dal - bags bear foreign markings (corroborative evidence or not) - illegal import - HELD THAT - The seizure was made from the Godown of the Appellant at Shillong city which is not connected to the International Border. Goods were purchased under valued documents which are mix of Indian and imported origin and the purchase documents were not proven to be false or fake. No evidence other than foreign markings on the bags was adduced to prove that the goods were smuggled. Foreign markings or foreign origin of goods by itself does not render the goods as smuggled. Burden to prove the smuggled nature of goods is on the Revenue. Such burden was not discharged by adducing any positive tangible evidence. Thus foreign origin of the goods even proved smuggled nature thereof is not proven. In the liberalized economy foreign goods have free entry and found in the shops in abundance for almost each and every commodity. Foreign markings ipso facto does not prove smuggled nature of the goods. It needs corroborative evidence which is totally absent in the case. Therefore Order of confiscation of the goods deserves to be set aside and quashed with consequential relief to the Appellant. Appeal allowed.

Summary

Issues:
The issues involved in this case are the confiscation of goods based on foreign markings, the burden of proof on the Revenue to establish smuggling, and the validity of seizure on the basis of markings alone.

Confiscation based on Foreign Markings:
The Appellant, a wholesaler of grocery items, appealed against the confiscation of 510 bags of Yellow Peas and 11 bags of Motor Dal due to foreign markings. The Original Authority and Ld. Commissioner (Appeals) upheld the confiscation, citing foreign markings as evidence of illegal importation.

Burden of Proof and Smuggling Allegations:
The Appellant argued that the goods were purchased under valid documents, a mix of Indian and imported origin, and that no concrete evidence beyond foreign markings was presented to prove smuggling. The Ld. Consultant contended that mere markings do not justify confiscation, highlighting the lack of substantial proof of smuggling.

Validity of Seizure based on Markings Alone:
The Appellant emphasized that the goods were purchased without verifying their origin, based on quality and quantity criteria. The Ld. Consultant pointed out that the seizure inventory lacked specific details about the markings on each bag and failed to establish a direct link to smuggling activities. Additionally, the Appellant provided purchase documents indicating a mix of indigenous and foreign goods.

Judgment:
The Member (Judicial) reviewed the case and found that the goods were seized from a godown in Shillong, not connected to the international border. The purchase documents were a mix of Indian and imported goods, with no evidence proving falsification. The Member emphasized that foreign markings alone do not indicate smuggling, and the burden of proof lies with the Revenue. Citing relevant case laws, it was concluded that foreign origin does not automatically imply smuggled goods in a liberalized economy. Consequently, the Order of confiscation was set aside, and the appeal was allowed with consequential relief to the Appellant.