2016 (12) TMI 1101 - AT - Customs

Seizure - smuggling of the goods - Held that - It is the accepted premise that the activity of smuggling is not committed in the manner to leave the footprints of such activities in the form of marks and evidences for future convenience of law enforcement authorities, who are to investigate such criminal activities - the purchase of the sale invoices, bank transactions, stock registers produced by M/s. Surana Trading Company, the main notice, did not support the statement made by the noticee respondent Shri Kamal Kumar Surana. The concerned trading license was also found lapsed - The Hon ble Supreme Court in the Collector of Customs, Madras and Ors. vs. D.Bhoormull 1974 (4) TMI 33 - SUPREME COURT OF INDIA also holds that there can be circumstances where direct evidences indicating the smuggling of the goods may not be available but there could be several circumstances of determinative character leading to the conclusion that the seized articles are smuggled goods - Appeal allowed by way of remand.

Summary

Issues:
- Appeal against dropping of proceedings based on seizure of Betel Nuts of third country origin
- Failure to prove origin and smuggled nature of goods
- Discrepancies in purchase vouchers and lack of supporting evidence
- Shifting burden of proof from Revenue to noticee respondents
- Remand for denovo adjudication

Analysis:
1. The appeal was filed by the Revenue against dropping proceedings initiated by a Show Cause Notice (SCN) dated 26.05.2008 regarding the seizure of Betel Nuts of third country origin, valued at ?31,12,000. The Commissioner of Customs, Patna dropped the proceedings citing the failure of the Revenue to substantiate the origin and smuggled nature of the goods.

2. The Revenue contended that the trade opinion and evidence from M/s. Sheohar Sahkari Upbhokta Bhandar supported the third country origin of the seized Betel Nuts. However, discrepancies in purchase vouchers, dates, and lack of supporting evidence raised doubts. The proprietor of M/s. Surana Trading Co. could not provide crucial details, and the trading license was found lapsed.

3. The Adjudicating Authority failed to recognize the discrepancies in the purchase invoices and the lack of supporting evidence from the noticee respondents. The burden of proof was on the Revenue to establish the goods as smuggled, but the Authority did not fully appreciate the investigation outcomes, leading to a shift in the burden of proof to the respondents.

4. Citing legal precedents, the Tribunal emphasized the need for thorough investigation to prove smuggling activities, even in the absence of direct evidence. The Tribunal remanded the case to the Commissioner of Customs, Patna for denovo adjudication, considering the Supreme Court's stance on burden of proof in such cases.

5. The Tribunal allowed the appeal by way of remand, directing a fresh adjudication within four months from the date of the order. The decision highlighted the importance of evidence, burden of proof, and the need for a comprehensive assessment in cases involving alleged smuggling activities.

This detailed analysis of the judgment highlights the key issues, arguments presented, evidentiary shortcomings, legal principles applied, and the Tribunal's decision to remand the case for further adjudication.