2024 (3) TMI 932 - AT - Customs

Revenue fails to prove betel nuts were smuggled goods, confiscation order set aside under Section 123

CESTAT Kolkata held that Revenue failed to prove betel nuts were smuggled goods of foreign origin. Since betel nuts are not notified items under Section ... Smuggling - Betel Nuts - foreign origin goods - town seizure - notified item or not - onus to prove - HELD THAT:- It is a case of town seizure of betel nuts which is not a notified item under Section 123 of the Customs Act, 1962. Therefore, the onus to prove that the betel nuts are a smuggled one is on the Revenue. At the time of interception, the appellant has produced documents pertaining to procurement of the said betel nuts through proper channel. In that circumstances, we hold that the Revenue has failed to discharge their onus to prove that the goods impugned are a smuggled one or of foreign origin. As Revenue has failed to discharge their onus that the goods in question are a smuggled one, in these circumstances, the confiscation of the impugned goods is not sustainable in the eyes of law and therefore, confiscation of the impugned goods is set aside. As the goods are not liable for confiscation, consequently no penalty is imposable on the appellants. The impugned order set aside - appeal allowed. Issues Involved:The case involves the seizure of betel nuts of foreign origin, confiscation of goods, and imposition of penalties under the Customs Act, 1962.Seizure and Confiscation of Betel Nuts:The Customs officers intercepted three trucks carrying betel nuts of foreign origin based on specific information. Subsequent thorough searches revealed the presence of dry betel nuts smuggled into India from Myanmar. The drivers were informed of the illegal importation, leading to the seizure of the goods and the vehicles under Section 110 of the Customs Act, 1962. The total seizure value was determined, and the goods were handed over for disposal due to space constraints in the godown.Legal Proceedings and Adjudication:After recording statements and conducting investigations, it was alleged that the seized betel nuts were of Myanmar origin without proper import documentation. The appellants contested the confiscation, arguing that betel nuts are not prohibited items and the Revenue failed to prove foreign origin. The appellants sought the reversal of the confiscation order.Tribunal's Decision and Precedent:The Tribunal observed that betel nuts are not a notified item under the Customs Act, shifting the burden of proof to the Revenue to establish smuggling. As the appellants produced procurement documents during interception, the Tribunal held that the Revenue failed to prove the goods were of foreign origin. Citing a similar case precedent, the Tribunal concluded that the confiscation was not justified, and no penalties could be imposed due to the lack of evidence of smuggling.Conclusion:The Tribunal set aside the impugned order, ruling in favor of the appellants due to the Revenue's failure to prove smuggling. As a result, the confiscation of the betel nuts was deemed unsustainable, leading to the allowance of the appeals with consequential relief. The decision was pronounced in open court, providing relief to the appellants in the case of the seized betel nuts.