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TMI Blog2025 (3) TMI 1147X X X X Extracts X X X X X X X X Extracts X X X X ..... 2, issued by the Additional Commissioner of Customs, Shillong, wherein the Ld. Additional Commissioner has ordered for confiscation of the said 34,400 kgs. of betel nuts, valued at Rs.32,68,000, along with imposition of equivalent penalty under Sections 112(a) and 112(b) of the Customs Act, 1962. 1.1. On appeal, the Ld.Commissioner (Appeals), C.G.S.T., Central Excise and Customs, Guwahati, upheld the demands confirmed vide Order-in-Appeal dated March 28, 2023. The present appeal has been filed by the appellant against the impugned Order-in- Appeal dated March 28, 2023. 2. The appellant submits that the goods were lawfully purchased from local markets in Nagaland and Assam, and the confiscation was done solely on the basis of suspicions without any substantive proof to indicate that the goods were of foreign origin. It is submitted by the appellant that 'Areca Nut' is not a notified item under Section 123 of the Customs Act, 1962 and hence, the responsibility is on the Department to prove that the said goods are smuggled in nature; however, the Department has not brought in any evidence to substantiate the allegation that the impugned goods are smuggled in nature. Hence, the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are disposed of pending appeal, the money value of the goods is liable to be returned. 2.3. Further, the appellant has also placed reliance on the judgement of The Hon'ble High Court Of Judicature At Bombay In Writ Petition No. 467 of 2023 - Leyla Mohmoodi, and Mojtaba Ebrahim Gholami in connection with seizure of petitioners' gold jewellery by Customs department, wherein it has been held that the disposal was patently illegal being in breach of the provisions of not only the Customs Act, but the rights guaranteed to the petitioners under Article 300A read with Article 14 of the Constitution of India. 3. The Ld. Authorized Representative of the Revenue reiterated the findings in the impugned order. 4. Heard both sides and perused the appeal records. 5. We observe that on July 12, 2020, Customs officers from Dimapur, accompanied by personnel of Assam Rifles, conducted a search at the appellant's godown at 5th Mile, opposite, Dimapur, Nagaland and seized 430 bags weighing 34,400 kgs., of Areca Nuts (supari). 'Areca Nut' is not a notified item under Section 123 of the Customs Act, 1962. Thus, the responsibility is on the Department to prove that the said goods are smuggled in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; the drivers stated that after proceeding some distance on Guwahati Kolkata Road they were asked to come back to Guwahati. We find that the evidence collected by investigation could establish a reasonable doubt as to the origin of arecanut. But the same is not enough to prove the smuggled nature of the arecanut. We find that investigation was only in the direction to conclude that there was no proof for indigenous and licit procurement of betel nut seized and that the claim of the appellants cannot be verified in some cases. We find that the betel nut is not notified under Section 123 of the Customs Act, 1962 and therefore, the burden of proof lies with the department to prove the same. It's not just enough to prove by negative inference. Allegation requires to be proved by cogent and positive evidence. We find that no such positive evidence has been put forth by the department. There is not even a reference or narration as to how and wherefrom the impugned goods are smuggled. We find that the Tribunal in the case of Dharmendra Kumar Jha - 2016 (344) E.L.T. 264 (Tri. - Kol.) held that betel nut is not a notified commodity under Section 123 of the Customs Act, 1962 and the onus is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hold that the confiscation of the impugned goods is not sustainable and accordingly, we set aside the same. Since, the order of confiscation is not sustained, the demand of redemption fine in lieu of confiscation is not sustainable and accordingly the same is set aside. As the confiscation itself is not sustained, there is no question of imposing penalty on the appellant and hence we set aside the same. 6. Further, it is observed that the seized goods were destroyed at the pre-trial stage. The appellant claims that he was not given an opportunity to explain his stand before destruction of the goods, which is in violation of the principles of natural justice. Thus, we find that the appellant has claimed refund of the seized value (Rs.32,68,000) of the goods along with 12% interest per annum from the date of seizure i.e., from 12.07.2020. The appellant has placed on record the reply furnished by the Assistant Commissioner of Customs (Prev.), NER, Shillong dated 23.06.2022 in response to the RTI Application of the appellant. The relevant part of the above reply of the Assistant Commissioner of Customs (Prev.), Shillong is reproduced below as ready reference: - "In this regard, it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hillong, in WP(C) No. 192 of 2023 Date of Order: 24.04.2024, which has been followed in the decision dated 27.06.2024 in WP(C) No. 192 of 2023, related to the case of Smt. Laltanpuii, D/o Zadawla Khiangte. In the decisions cited above, the Hon'ble Meghalaya High Court has allowed a part of the seizure value as refund when the goods seized from the appellant was destroyed. The relevant portion of the said decision is reproduced below: "1. The only question to be decided in the present writ petition is with regard to the quantum of refund, that the respondents are liable to afford the writ petitioner. This is view of the fact that, the order of the Tribunal, wherein it was found that the goods were neither imported nor proved to be smuggled, though assailed before the Division Bench of this Court, and ultimately before the Hon'ble Supreme Court, the case of the respondents was dismissed. 2. In the course of hearing, on the quantum of refund, the learned DSGI has referred to the order of the Commissioner dated 06.06.2019, wherein he submits that the writ petitioner themselves in the said proceedings had prayed for reduction of price of the damaged betel nuts at Rs.96 per kilo, whi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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