2020 (12) TMI 536 - AT - Customs

Provisional Release of seized goods on the condition of furnishing of bond and cash security of 25% of the seized value - Betel Nuts - Foreign Origin goods or not - HELD THAT - The seizure of betel nuts has taken place only on a belief that the same appears to be of foreign origin. On being questioned, Shri Jain, learned Authorised Representative has agreed that there is no direct evidence of betel nuts being of foreign origin. In such a scenario, the allegation of the nuts being smuggled cannot, prima facie, be upheld. There are umpteen number of cases laying down that inasmuch as the betel nuts are also indigenously grown items and the foreign origin and smuggled nature of the same cannot be sustained on mere visual examination. It may not be out of place to mention here that betel nuts are not notified items in terms of section 123 of Customs Act and as such, the onus to prove that the same are of foreign origin and their smuggled character lies heavily on the Revenue - In the absence of the same, the provisional release subject to heavy condition of deposit of 25% of the seized value cannot be held to be justified. Revenue is directed to release the betel nuts as soon as possible as the same are perishable item, and preferably within a period of two months from today - petition allowed.

Summary

Issues: Seizure of betel nuts, provisional release conditions, foreign origin allegations, justification of seizure, release of goods without conditions.

In the case before the Appellate Tribunal CESTAT ALLAHABAD, the appeal was made against the provisional release conditions imposed on seized betel nuts by customs authorities. The Customs Officer intercepted a truck loaded with betel nuts, suspected to be of foreign origin and smuggled into India. The appellant applied for provisional release, which was granted by the Additional Commissioner on furnishing a bond for the full value and 25% cash security of the seized value. The appellant contested the seizure, arguing that the betel nuts were covered by proper documentation and not of foreign origin. The Commissioner (Appeals) upheld the conditions, leading to the present appeal.

During the hearing, the appellant's advocate argued that there was no evidence of the betel nuts being of foreign origin, questioning the justification for the seizure. The Revenue's advocate defended the imposition of the 25% cash security norm. The appellant's advocate highlighted the absence of a show cause notice despite over a year passing since the seizure, advocating for unconditional release of the goods. The tribunal noted that the seizure was based on a belief of foreign origin without direct evidence, emphasizing that betel nuts are not notified items under the Customs Act. The onus to prove foreign origin and smuggled nature rested on the Revenue, which was not substantiated. The tribunal set aside the impugned order, directing the Revenue to release the betel nuts promptly due to their perishable nature, preferably within two months, considering the lack of evidence supporting the seizure.

In conclusion, the tribunal ruled in favor of the appellant, emphasizing the lack of evidence to justify the seizure and the perishable nature of the goods. The decision highlighted the importance of proving foreign origin and smuggled character for seized items, ultimately leading to the directive for the release of the betel nuts without the heavy conditions imposed earlier.