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2023 (12) TMI 192 - AT - CustomsConfiscation of goods - Smuggling - foreign origin Betel Nuts - specified or notified goods? - Burden to prove - consigner appellant firm M/s Ganga Enterprises was found to be non-existent at the address mentioned in the invoice number - HELD THAT - The impugned goods i.e. Betel Nuts are not the goods specified or notified under Section 123 of the Customs Act, 1962. Thus the burden to prove the smuggled nature of these goods lies on the Custom Authorities as held by the Tribunal in the case of BABOO BANIK VERSUS COMMISSIONER OF C. EX. CUS., LUCKNOW 2004 (7) TMI 482 - CESTAT, KOLKATA . Tribunal in the case of BIJOY KUMAR LOHIA VERSUS COMMISSIONER OF CUSTOMS (PREV.), PATNA 2005 (11) TMI 306 - CESTAT, KOLKATA has held that the local trade opinion cannot take the place of the legal evidence. No case has been made out for the seizure and confiscation of the Betel Nuts is made out as no evidence has been placed on record to establish the foreign origin of these goods, or of illegal importation of the same. These goods were seized when they were being transported within the country, which do not cross any international border from the place of origin to destination. Impugned goods namely betel nuts are not specified under Section 123 of the Customs Act, 1962 and the burden to prove the smuggled nature of the same is on the Custom Authorities. If the evidences on the basis of which foreign origin of the goods are found unsatisfactory as per the above said decision, it is not found that the Custom Authorities have discharged the burden cast on them under Section 123, ibid. Cancellation of registration under GST may be for violation of the provisions of that Act, and non existence of consignor etc., at specified address do not establish the case of the revenue for holding the goods to be of foreign origin and smuggled into India. There are no merits in the impugned order of Commissioner (Appeals) - appeal allowed.
Issues Involved:
1. Confiscation and Penalty of Betel Nuts 2. Burden of Proof for Smuggled Goods 3. Reliability of Arecanut Research & Development Foundation (ARDF) Report 4. Non-existence of Consignor and Cancellation of GST Registration Issue-wise Summary: 1. Confiscation and Penalty of Betel Nuts: The Commissioner (Appeals) upheld the confiscation and penalty on the appellant, citing that the consigner firm M/s Ganga Enterprises was non-existent, and the GSTN of Mr. Pankaj Kumar Yadav was canceled for violations. The appellant's defense, which included documents indicating local purchase of the betel nuts, was not accepted due to these discrepancies. The adjudicating authority's decision was based on the differing facts of the case, distinguishing it from previous cases cited by the appellant. 2. Burden of Proof for Smuggled Goods: The Tribunal observed that betel nuts are not specified under Section 123 of the Customs Act, 1962, which places the burden of proving the smuggled nature of the goods on the Customs Authorities. The Tribunal cited previous cases, including Baboo Banik and Bijoy Kumar Lohia, to assert that no evidence was provided to establish the foreign origin or illegal importation of the betel nuts. The goods were seized during local transportation, not crossing any international borders. 3. Reliability of Arecanut Research & Development Foundation (ARDF) Report: The Tribunal noted that reliance on the ARDF report was improper. Previous judgments, including Maa Gauri Traders and Laltanpuii, held that ARDF's opinion could not conclusively determine the country of origin of betel nuts. The Tribunal emphasized that the ARDF report is merely an opinion and not a scientific test report. The Allahabad High Court and the Supreme Court have also dismissed the reliability of ARDF reports in similar cases. 4. Non-existence of Consignor and Cancellation of GST Registration: The Commissioner (Appeals) distinguished the present case by highlighting the non-existence of the consignor at the specified address and the cancellation of the appellant's GST registration. However, the Tribunal found that these points did not establish the foreign origin or smuggled nature of the goods. The burden of proof remained unmet by the Customs Authorities, as the cancellation of GST registration and non-existence of the consignor did not suffice to prove the goods were smuggled. Conclusion: The Tribunal allowed the appeal, finding no merit in the impugned order of the Commissioner (Appeals). The decision was based on the lack of evidence to prove the foreign origin and smuggled nature of the betel nuts, as well as the unreliability of the ARDF report. The operative part of the order was pronounced in open court.
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