2024 (5) TMI 471 - AT - Customs

Smuggling of betel nut and black pepper of foreign origin - intercepted by trucks - seizure of goods - confiscation - Penalty - HELD THAT - On going through the records, we find that it is not conclusively held that the goods are of foreign origin, only it is an opinion that the goods might be of Indonesian origin as per the report of ARDF, Mangalore. Thus, we hold that the Revenue has failed to establish that the goods are smuggled in nature and procured by the appellants by illicit means. In fact, the appellants were able to produce the source of procurement of the said goods in question, on which GST has been paid. In that circumstances, the Revenue has failed to establish the discharge the onus to prove the goods are smuggled in nature and are of foreign origin. Therefore, we do not find any merit in the impugned order quo imposing penalties on the appellants. Therefore, we do not find any merit in the impugned order quo imposing penalties on the appellants.

Summary

Issues:
The case involves allegations of smuggling betel nut and black pepper of foreign origin, confiscation of goods under Section 111(b) and 111(d) of the Customs Act, and imposition of penalties under Section 112(a) and/or Section 112(b) of the Act.

Facts and Decision:
The officers intercepted trucks carrying betel nut and black pepper of foreign origin. Statements revealed a complex chain of ownership and importation involving multiple individuals. The Revenue alleged a pre-planned conspiracy to smuggle goods into India. The Adjudicating Authority imposed significant penalties on the appellants.

Defendant's Argument:
The appellants argued that the Revenue failed to conclusively establish the foreign origin of the seized goods. They contended that without concrete evidence, confiscation and penalties cannot be justified under the Customs Act.

Revenue's Position:
The Revenue relied on marks on the goods and a report from ARDF, Mangalore, to support their claim that the items were of foreign origin.

Court's Analysis and Conclusion:
After reviewing the evidence, the Tribunal found that the Revenue did not sufficiently prove the goods were smuggled or of foreign origin. The appellants were able to demonstrate the legitimate source of procurement with GST payments. Consequently, the penalties imposed on the appellants were deemed unjustified and set aside.

Outcome:
The Tribunal ruled in favor of the appellants, overturning the penalties imposed by the Adjudicating Authority. No penalties were deemed applicable in this case.