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TMI Blog2023 (12) TMI 189X X X X Extracts X X X X X X X X Extracts X X X X ..... rough 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rala, a major betel nut producing state, has stated that it is not possible to determine the place of origin of Betel nut through test in a Laboratory. 2.5 After making necessary enquiries Custom Officers seized the Betel Nuts being of foreign origin for which no documentary evidences could be produced with regards to legal import, and hence liable for confiscation under Section 111 of the Customs Act, 1962. The truck No.UP-71/T 8789 used for transportation of the said betel nut was also seized as being liable for confiscation under Section 115 (2) of the Custom Act, 1962. 2.6 A show cause notice dated 16.02.2018 was issued asking the respondents and others to show cause as to why: a) The above seized 283 bags, weighing 19810 kg foreign origin betel nuts valuing Rs.49,52,500/- be confiscated under section 111 of the Act; and b) The vehicle No.UP-71/T 8789, be confiscated under section 115 (2) of the Act; and c) For violating the provisions of the Notification and the Act, a penalty under Section 112 of the Act be imposed on them. 2.7 The show cause notice was adjudicated vide Order-in-Original No.06/ADC/2019-20 dated 31.05.2019 holding as follows: 1. I order f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and also order to adjust this amount of penalty Rs. 25,000/- from the Cash Security Rs. 02,00,000/- deposited at the time of Provisional release of the vehicle Registration no. UP- 71/T-8789. 4. I impose a penalty under section 112(b) of Customs Act, 1962 on the following noticees in following manner- i. M/s. Mohata Traders (Prop. Shri Doongar Mall Mohata) Rs.3,00,000/- (Rs. Three Lakh only.) ii. M/s. Shriji Sales Corporation - Rs. 25,000/- (Rs. Twenty Five Thousand only.) iii. Shri Salauddin - Rs. 50,000/- (Rs. Fifty Thousand only.) iv. Shri Raju Sharda Rs. 50,000/- (Rs. Fifty Thousand only.) v. Shri Anil Rs. 50,000/- (Rs. Fifty Thousand only.) vi. Shri Navratan Vaid- Rs.1,50,000/- (Rs. One Lakh Fifty Thousand only.) 2.8 Aggrieved respondent preferred appeal before the Commissioner (Appeal) on the following grounds : - (i) The appellant had submitted enough material before the adjudicating authority to show that the impugned betel nuts were purchased from local Mandis and Haats, which are local agricultural markets and in support have produced all original tax invoice booklet, document related to purchase details, details of supplier etc. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue only making M/s Mohata Traders as respondent. Hence, I am considered only with the impugned order to the extent it is in respect of the said respondent. No part of this order should be treated as pronouncing or recording any finding in respect of any other person concerned with the impugned order who is not respondent in the present appeal. 4.3 Commissioner (Appeals) recorded following findings in the impugned order: 8. I have gone through the case record. The vehicle loaded with the impugned consignment was intercepted near Gorakhpur. It is on record that driver was carrying Tax Invoice No.05/GST dated 20.08.2017 issued by Appellant-2) and Bilty No.049X283 issued by the appellant-3. The driver of the said truck in his statement dated 23.08.2017 confirmed that the impugned betel nuts were loaded from a godown in Dhupguri. 9. The Appellant-1, authorized representative of Appellant-2, in his statement dated 20.09.2017 before the Superintendent Customs (Preventive) Gorakhpur, claimed that the impugned betel nuts were legally purchased from local market of Dhupguri and has also produced purchase invoice of the same before Superintendent and further also produced doc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssioner of Customs Lucknow, reported at 2004 (174) E.L.T. 205 (Tri-Kolkata), Hon'ble Tribunal has held that betel nuts are not notified items and as such it is for the Revenue to prove by production of sufficient evidence that the betel nuts have been smuggled into the country. As no such evidence was produced by the Revenue, the impugned order was set aside and the party's appeal was allowed. 14. Further, in the case of BIJOY KUMAR LOHIA vs. CC Patna, reported at 2006 (196) E.L.T. 215 (Tri.-Kolkata), the Hon'ble Tribunal has held that local trade opinion cannot take the place of legal evidence. As Revenue failed to prove by product of tangible evidence that the betel nuts were smuggled into the country, confiscation thereof is not sustainable. 15. Hon ble CESTAT Allahabad in the case of MAA GAURI TRADERS, vide Final Order No.72729/2018 dated 26.11.2018, has in similar circumstances held that in absence of any positive evidence to evidence to establish the foreign origin of the goods and their illegal smuggling into the country, their confiscation is not justified. 4.4 From the facts as available as are ascertained from the impugned order and the appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atna, reported at 2006 (196) E.L.T. 215 (Tri.-Kolkata) has held that the local trade opinion cannot take the place of the legal evidence. 4.9 I also note 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, I agree with the Appellate Authority that the said report can only be treated as an opinion and not as scientific test report regarding the country of origin. Further, even if the betel nuts are held to be of foreign origin, the same can be confiscated only when it is proved that betel nuts have been illegally smuggled into the country. Revenue has not produced any evidence to show that the betel nuts in question were smuggled into India. 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 product ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material on which the conclusion can be based or no sufficient material. 13. Further in Sewalal Chhogalal (supra) the Court also held in paragraph 67 and 68 that : - 67. There is no prohibition to entertain a second appeal even on question of fact provided the Court is satisfied that the findings of the courts below were vitiated by non-consideration of relevant evidence or by showing erroneous approach to the matter and findings recorded in the court below are perverse. [Vide Jagdish Singh v. Natthu Singh[(1992) 1 SCC 647 : AIR 1992 SC 1604] , Prativa Devi v. T.V. Krishnan [(1996) 5 SCC 353] , Satya Gupta v. Brijesh Kumar [(1998) 6 SCC 423] , Ragavendra Kumar v. Firm Prem Machinery Co. [(2000) 1 SCC 679 : AIR 2000 SC 534] , Molar Mal v. Kay Iron Works (P) Ltd. [(2000) 4 SCC 285 : AIR 2000 SC 1261] , Bharatha Matha v. R. Vijaya Renganathan [(2010) 11 SCC 483 : (2010) 4 SCC (Civ) 498] and Dinesh Kumar v. Yusuf Ali[(2010) 12 SCC 740 : (2010) 4 SCC (Civ) 738] .] 68. In Jai Singh v. Shakuntala [(2002) 3 SCC 634 : AIR 2002 SC 1428] this Court held that (SCC p. 638, para 6) it is permissible to interfere even on question of fact but it may be only in very exceptio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e issued by Arecanut Research and Development Foundation (ARDF), Mangalore. We find that various fora have held that the institute is not accredited and hence, the report is not reliable. It was held by High Court of Patna 2020 (371) E.L.T. 353 (Pat.) that in absence of any material to show ARDF Mangalore is accredited laboratory by competent authority under Act and Rules, it s report cannot have consequence of fastening of any legal liability and No legal liability can flow from report of such an institution , hence authorities not justified in again relying thereon to justify seizure in question. Tribunal, in the case of M/s. Maa Gauri Traders 2019 (369) E.L.T. 1024 (Tri - All.), held that since betel nuts are also produced in India, in absence of any evidence that confiscated goods were illegally smuggled into India, same cannot be confiscated merely based on test report of an organization which later on also admitted that country of origin cannot be determined through test in the laboratory. We also find that Learned Commissioner (Appeals) in the case of Monjurul Haque Laskar set aside the departments stand on the above ground and the order was upheld by the Tribunal vide Fina ..... X X X X Extracts X X X X X X X X Extracts X X X X
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