2023 (12) TMI 189 - AT - Customs

Smuggling - Betel Nuts being of foreign origin - no documentary evidences could be produced with regards to legal import - burden to prove - appeal filed without application of mind - HELD THAT - The appeal are filed in routine manner without any application of mind. The Form CA-5 which has been filed is incomplete and fails to record even the basics of the cases as per the impugned orders of the lower authorities. Commissioner (Appeal) has in appeal filed by four of the aggrieved persons against the order in original set aside the entire Order-in-Original even against the persons whose appeal was not under consideration by him, and revenue files this appeal even without uttering a single word about the same. Might be the revenue is only aggrieved by the setting aside of the order against the respondent and not against setting aside of the entire order in original without any appeal. 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 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. As such, the Appellate Authority is agreed upon that the said report can only be treated as an opinion and not as scientific test report regarding the country of origin. 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:

Confiscation of Betel Nuts:
The appeal was filed against the Order-in-Appeal where the Commissioner (Appeals) set aside the confiscation of betel nuts. The original adjudicating authority had confiscated the betel nuts on the basis that they were of foreign origin and smuggled into India, supported by trade opinions and a report from the Arecanut Research and Development Foundation (ARDF), Mangalore. However, the Commissioner (Appeals) found that there was no conclusive evidence to prove the foreign origin or illegal importation of the betel nuts. The Commissioner (Appeals) emphasized that betel nuts are not notified under Section 123 of the Customs Act, and the onus to prove smuggling lies with the Revenue, which was not discharged. The Commissioner (Appeals) also noted that the ARDF report could not be relied upon as it is not possible to determine the place of origin of betel nuts through laboratory tests.

Confiscation of Vehicle:
The original adjudicating authority had also ordered the confiscation of the vehicle used for transporting the betel nuts under Section 115(2) of the Customs Act. However, the Commissioner (Appeals) set aside this order as well, citing the lack of evidence to prove that the betel nuts were smuggled. The Commissioner (Appeals) noted that the driver had produced tax invoices and other documents to show the legal purchase of the betel nuts from local markets.

Imposition of Penalties:
Penalties were imposed on various parties under Section 112 of the Customs Act by the original adjudicating authority. These penalties were also set aside by the Commissioner (Appeals) due to the lack of evidence proving the illegal importation of the betel nuts. The Commissioner (Appeals) referenced several tribunal decisions that supported the view that local trade opinions and unaccredited reports could not be used as the basis for such penalties.

Conclusion:
The Tribunal upheld the order of the Commissioner (Appeals), dismissing the Revenue's appeal. The Tribunal agreed that the burden of proof was on the Revenue to establish that the betel nuts were smuggled, which was not done. The Tribunal also noted that the ARDF report could not be considered reliable evidence. Consequently, the confiscation of the betel nuts and the vehicle, as well as the imposition of penalties, were deemed unjustified. The appeal filed by the Revenue was dismissed.