1990 (3) TMI 223 - AT - Customs

Tribunal overturns confiscation order due to lack of evidence

The Tribunal allowed the appeal against the Adjudication Order confiscating M.S. Iron Scraps under Section 111(d) of the Customs Act, 1962. It held that ... Confiscation - Onus of proof Issues:1. Confiscation of seized M.S. Iron Scraps under Section 111(d) of the Customs Act, 19622. Violation of Section 11 of the Customs Act, 1962 read with Section 3(1) of the Import and Export (Control) Act, 19473. Principles of natural justice regarding reliance on statements of consignees4. Burden of proof on the Department to establish smuggled nature of goods5. Admissibility of statements of consignees without being furnished to the appellant6. Justification for suspicion of smuggling based on location and denial of transaction by consigneesAnalysis:1. The appeal was filed against an Adjudication Order confiscating M.S. Iron Scraps under Section 111(d) of the Customs Act, 1962, with an option for redemption upon payment of a fine and imposition of a penalty. The Customs officers intercepted trucks loaded with M.S. Scraps, leading to the seizure under Section 110 of the Act for alleged violation of import/export regulations. Show-cause notices were issued, and the appellant responded before the Adjudicating Authority passed the impugned order.2. The appellant contended that the goods were seized on suspicion without sufficient evidence of smuggling. It was argued that reliance on statements of consignees without providing copies to the appellant violated principles of natural justice. The burden of proof was emphasized, stating that suspicion alone cannot establish the smuggled nature of goods.3. The Department argued that the case should be viewed based on probabilities and circumstances, citing the location of seizure near the Nepal border and denial of connection by the consignees. The appellant countered, asserting that the use of invoices printed with the Bettiah name was a regular practice, and the transport voucher indicated the origin from Raxaul to Kanpur.4. The Tribunal analyzed the burden of proof in cases involving non-notified goods, emphasizing the need for concrete evidence to establish smuggling. The reliance on inculpatory statements and the shift in burden of proof were discussed, with the Tribunal concluding that the seizure was based on suspicion rather than reasonable belief.5. The Tribunal highlighted the necessity of providing statements relied upon to the appellant for a fair defense, emphasizing the principles of natural justice. The lack of opportunity for the appellant to rebut the statements and cross-examine witnesses raised concerns about the reliability of the evidence presented.6. The justification for suspicion based on the location of seizure and denial of transactions by consignees was evaluated. The Tribunal found insufficient grounds to establish the smuggled nature of the goods, extending the benefit of doubt to the appellant and allowing the appeal for consequential relief. The judgment emphasized the importance of due process and the burden of proof in cases of alleged smuggling.