2013 (11) TMI 752 - AT - Customs

Smuggled goods - Burden of proof - Departmental Clarifications - Confiscation of betel nuts - Held that - betel nuts are non-notified items in which case, the onus to prove that the goods are smuggled lies heavily upon the Revenue and is required to be discharged by production of positive evidences - Revenue cannot first show laxity in investigation and then seek to shift the burden to prove that the goods are not smuggled especially when there is not even any evidence produced to show illegal importation of seized non-notified goods - It is well settled law declared by various judicial as also quasi-judicial authorities as discussed in detail in the impugned order that in terms of non-notified items, burden lies on the Revenue to proved legal entry into the country and to show that the goods were smuggled - Following decision in the case of Sultan Dharani 2007 (9) TMI 469 - CESTAT, MUMBAI - There is no infirmity in the order of the Commissioner (Appeals) - Decided against Revenue.

Summary

Issues:
1. Confiscation of betel nuts allegedly smuggled into India.
2. Appeal against the order of the Commissioner (Appeals) allowing all appeals of the respondents.
3. Burden of proof on Revenue to establish smuggling of non-notified goods.

Issue 1: Confiscation of Betel Nuts:
The case involved the interception of a truck loaded with betel nuts, suspected to have been smuggled into India at Kishanganj through an off-route from Nepal. The Customs officers seized the goods valued at approximately Rs. 14.23 lakhs and initiated proceedings against the respondents. The impugned order by the Commissioner (Appeals) set aside the confiscation and penalties imposed, leading to the appeals by the Revenue. The Commissioner found that all necessary documents were produced, ownership was claimed by the importer, and various parties involved corroborated the import details. Despite investigations, the Revenue failed to provide conclusive evidence of smuggling, leading to the rejection of the appeals.

Issue 2: Appeal Against Commissioner (Appeals) Order:
The Commissioner (Appeals) based the decision on the verified documents, statements of involved parties, and lack of evidence supporting the smuggling allegations. The Commissioner highlighted that the department did not prove the smuggled nature of the goods and failed to provide any evidence contrary to the legal importation claim. Referring to a circular and tribunal decisions, the Commissioner concluded that the Revenue's case lacked substance and was legally unsustainable. It was emphasized that no contravention under the Customs Act was established against the seized consignment, justifying its confiscation. The burden of proof was placed on the Revenue to establish smuggling, especially for non-notified items like betel nuts.

Issue 3: Burden of Proof on Revenue:
The Tribunal's decision in a similar case emphasized that the Revenue must discharge the onus of proving smuggling for non-notified goods. The judgment highlighted that the burden lies on the Revenue to demonstrate legal entry into the country and establish the goods were smuggled. Citing legal precedents, it was concluded that the impugned order of the Commissioner (Appeals) correctly placed the burden of proof on the Revenue. The appeals filed by the Revenue were ultimately rejected based on the lack of evidence supporting the smuggling allegations and the failure to meet the burden of proof required for non-notified items like betel nuts.

This judgment underscores the importance of providing substantial evidence to support allegations of smuggling, especially for non-notified goods, and highlights the burden on the Revenue to establish illegal importation conclusively. The decision ultimately upholds the order of the Commissioner (Appeals) and rejects the appeals filed by the Revenue due to the lack of conclusive evidence supporting the confiscation of the betel nuts.