2023 (11) TMI 113 - AT - Customs

Confiscation of the vehicle - imposition of penalties under section 112 of Customs Act - Smuggling - Betel Nuts - notified goods - burden to prove - HELD THAT - On going through the impugned order of Commissioner (Appeals), it is noted that he has primarily gone by the fact that betel nuts are not notified under Section 123 of the Customs Act and the onus to prove that the same are smuggled is on the Revenue as held by the Tribunal in the case of BABOO BANIK VERSUS COMMISSIONER OF C. EX. CUS., LUCKNOW 2004 (7) TMI 482 - CESTAT, KOLKATA . Further, the 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. It is also noted that the reliance on the opinion of Arecanut Research Development Foundation (ARDF), Mangalore as regards the country of origin by the Original Adjudicating Authority was not proper inasmuch as the said organization in reply to an RTI query has stated that it is not possible to determine the place of origin of betel nuts through test in laboratory - The respondent had also brought on record a survey report on the cultivation of areca nuts in India issued by the Directorate of Arecanut and Spices Development, Ministry of Agriculture, Government of India which shows substantial production of betel nuts in West Bengal, Assam and North Eastern State. In the absence of any positive evidence to establish the foreign origin of the goods and their illegal smuggling into the country, the Appellate Authority is agreed that their confiscation is neither warranted nor justified. There are no infirmity in the impugned order of the Commissioner (Appeals) to the extent it pertains to the respondent in this appeal and the same is upheld - appeal of Revenue dismissed.

Summary

Issues Involved:
1. Confiscation of Betel Nuts
2. Confiscation of Vehicle
3. Imposition of Penalties

Summary:

1. Confiscation of Betel Nuts:
The Customs Preventive officers intercepted a truck loaded with betel nuts and other goods, suspecting them to be smuggled into India. Market opinions and a report from the Arecanut Research and Development Foundation (ARDF), Mangalore, suggested the betel nuts were of foreign origin. However, the Commissioner (Appeals) found the ARDF report unreliable, noting that the Directorate of Arecanut and Spices Development stated it is not possible to determine the origin of betel nuts through laboratory tests. The Commissioner (Appeals) also emphasized that betel nuts are not prohibited for import under the EXIM Policy and are freely traded in India. Consequently, the onus was on the Revenue to prove illegal importation, which they failed to do. The Tribunal upheld this view, referencing similar cases where confiscation was deemed unjustified without positive evidence of smuggling.

2. Confiscation of Vehicle:
The vehicle used for transporting the betel nuts was also seized under Section 115(2) of the Customs Act, 1962. However, since the confiscation of the betel nuts was not justified due to the lack of evidence of illegal importation, the confiscation of the vehicle was also deemed unjustified. The Commissioner (Appeals) set aside the confiscation of the vehicle, and the Tribunal upheld this decision.

3. Imposition of Penalties:
Penalties were initially imposed under Section 112 of the Customs Act, 1962, for the alleged acts of omission and commission leading to the smuggling of betel nuts. However, given the lack of evidence proving the betel nuts were smuggled, the imposition of penalties was also found to be unjustified. The Commissioner (Appeals) set aside the penalties, and the Tribunal upheld this decision.

Conclusion:
The Tribunal dismissed the Revenue's appeal, affirming the Commissioner (Appeals)'s decision to set aside the confiscation of betel nuts and the vehicle, as well as the imposition of penalties, due to insufficient evidence of illegal importation.