2009 (9) TMI 470 - AT - Customs

Tribunal overturns palm oil confiscation in smuggling case, ruling burden of proof on Revenue

The Tribunal allowed the Appeal, setting aside the confiscation of palm oil based on smuggling allegations. It held that the burden of proof rested on the ... Smuggling- Appellant filed this Appeal against the impugned order whereby 526 tins each containing 14 Kgs. of palm oil were confiscated on the ground that the same were smuggled into India and personal penalty of Rs. 50,000/-(Rupees Fifty Thousand only) was imposed on the Appellant. Held that- palm oil is not notified goods under Section 123 of Customs Act. Hence burden of proof is on Revenue to show that the same is smuggled into India and the goods are also not prohibited goods. Further I find that the Appellant claimed that the goods in question were purchased from M/s. Sree Narayan Oil Store is not in dispute as the payments were made through bank drafts. In these circumstances I find merit in the contention of the Appellant. The impugned order is set aside and Appeal is allowed. Appellant is entitled for consequential relief, if any, in accordance with law. Issues:Appeal against confiscation of palm oil on grounds of smuggling and imposition of personal penalty.Analysis:The case involved an Appeal against the confiscation of palm oil and imposition of a personal penalty on the Appellant. The facts of the case revealed that a truck carrying palm oil was intercepted by Revenue officers, leading to the seizure of the palm oil on suspicion of smuggling. The Appellant claimed ownership of the goods, stating they were purchased from a specific store and produced evidence to support this claim. The adjudicating Authority initially dropped the proceedings, but the Revenue filed an Appeal, resulting in a remand by the Commissioner (Appeals) for fresh adjudication.Upon remand, the adjudicating Authority once again dropped the proceedings, citing that the goods were not notified under Section 123 of the Customs Act, shifting the burden of proof to the Revenue to establish smuggling. The Revenue filed another Appeal, which was allowed by the Commissioner (Appeals), leading to the confiscation of the palm oil on the grounds of smuggling.The main contention of the Appellant was that since the goods were not notified under Section 123 of the Customs Act, the burden of proof lay with the Revenue to demonstrate smuggling. The Appellant argued that there was no concrete evidence of smuggling, presenting documentation of purchase from a legitimate store with payments made through bank drafts. On the other hand, the Revenue claimed that a statement by the truck driver indicated the goods were smuggled from Bangladesh, thereby shifting the onus to prove legal import onto the Appellant.In response, the Appellant highlighted discrepancies in the driver's statement, emphasizing that the driver was apprehended before making the smuggling claim and did not disclose the source of information. The Appellant also pointed out that the palm oil was not a prohibited item and that no samples were taken for testing. Moreover, the Appellant provided evidence of legitimate purchase transactions, which were corroborated by the store's proprietor confirming the sales and payments received through bank drafts.The final judgment favored the Appellant, with the Tribunal noting that the burden of proof rested on the Revenue to establish smuggling, especially given that the goods were not prohibited and no samples were tested. The Tribunal found merit in the Appellant's evidence of legitimate purchase and ownership, ultimately setting aside the impugned order and allowing the Appeal. The Appellant was granted entitlement to any consequential relief as per the law.