TaxTMI 
TaxTMI 
TaxTMI 
2024 (11) TMI 846
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....ld not establish the origin of the dry Areca nuts seized from the respondent. ii. Notwithstanding that in view of the fact that Betel/Areca Nut is not a notified item under the provisions of Section 123 of the Customs Act, the Department had duly discharged it's burden to prove that the seized goods have been smuggled into the Country by the respondent. iii. Whether the learned CESTAT erred in law by accepting the GST documents submitted by the appellant in support of the goods belatedly which was only made during the adjudication proceedings and were not subjected to propose scrutiny by the Department. iv. Whether the Order dated 06.07.2022 is otherwise perverse in law and therefore is required to be set aside. 4. The facts relevant for consideration of the instant appeal, in brief, are as follows: i. That on 17.03.2020, the 46 Assam Rifles personnel, intercepted two trucks bearing Registration No. AS 11 DC 1411 and AS 11 AC 6857, respectively, carrying total 310 bags (18600 Kg) of dry betal nuts at Kawlbem, Mizoram and handed over the same to the Customs Preventive Force (CPF), Champai, Mizoram. ii. The drivers of both the seized trucks, namely, Saroj Uddin Laskar and ....
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....e the same. It is not just enough to prove by negative inference. Allegation requires to be proved by cogent and positive evidence. I find no such positive evidence has been put forth by the Department. There is not even a reference or narration as to how and from where the impugned goods are smuggled. 5. The Tribunal, in the case of Customs Appeal No. 77344 of 2019 - Smt. Laltanpui vide Final Order No. 75659/2020 dated 09.12.2020 and in the case of Dharmendra Kumar Jha, [2016 (344) ELT 264 (Tri.- Kol)] held that betel nut being non-notified commodity under Section 123 of the Customs Act, 1962 and the onus is on the Department that seized goods were in fact smuggled to India, but the Department has not discharged its burden. Same ratio applies to the case in hand. 6. In view of above, I find that the betel nut being non-notified goods; burden to prove the fact of smuggling lies on the Department, and same has not been discharged. In view of the above discussions, seizure of impugned betel nut is not justified and needs to be set aside. Therefore, the appeal filed by the Department is allowed with consequential relief, if any, as per law. " 6. Mr. Johny L. Tochhawng, learned....
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....s growing districts to Kawlbem and thereafter, again to be transported to Aizawl. Learned counsel for the appellant has submitted that such a huge quantity of seized betal nuts could not have originated from Kawlbem Village, where there is no betal nuts production, unless it were smuggled from across the border and the learned Appellate Tribunal had failed to consider this aspect. 9. Learned counsel for the appellant has also submitted that the learned Appellate Tribunal, has erred in holding that the burden of proof lies with the Department to prove the allegations that the seized materials were smuggled materials by cogent and positive evidence. He submits that in fact, the Department is not required to prove its case beyond reasonable doubt but by the preponderance of probability. 10. It is submitted by learned counsel for the appellant that the learned Appellate Tribunal had failed to consider the fact that in customs cases, the rigorous standard of proof beyond reasonable doubt is not required, and what is only required is proof by circumstantial evidence. Therefore, if there is a greater degree of probability that the seized goods are of foreign origin and are smuggled, the....
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....re smuggled betel nuts is on the Department and it has to relieve the said burden by adducing positive evidence to that effect, which in the instant case it has failed and therefore, he submits that the learned Appellate Tribunal has not erred in setting aside the confiscation order by the impugned order. 16. In support of his submissions, the learned counsel for the respondent has referred to an order passed by the CESTAT in the Custom Appeal No. 77344/2019, where in a similar case, the CESTAT had set aside the seizure of betel nuts on the ground that the betel nut is not a notified commodity under Section 123 of the Customs Act, 1962 and the onus is on the Department that the seized goods were in fact smuggled to India which the Department had failed to discharge. The Customs Department had preferred an appeal against the aforesaid order, before the High Court of Meghalaya and by order dated 28.10.2021, passed in Customs Appeal No. 1/2021, the High Court of Meghalaya has upheld the aforesaid order of the CESTAT and dismissed the appeal. Against the said dismissal, the Customs Department again preferred a Special Leave Petition before the Supreme Court of India. However, by order....
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....tion having a relation to the rate of duty of customs or to the value of goods for the purposes of assessment), if the High Court is satisfied that the case involves a substantial question of law." 22. From a bare reading of above provision, it appears that an appeal under Section 130 of the Customs Act, 1962 shall lie to the High Court only if the High Court is satisfied that it involves a substantial question of law. It also appears that the provision of Section 130 (1) appears to be in pari materia with Section 100 (1) of the Code of Civil Procedure, 1908. There are a catena of judgments of the Apex Court, which has held that the existence of a substantial question of law is a sine qua non for exercise of jurisdiction of the High Court under Section 100 of the Code of Civil Procedure, 1908. 23. Thus, applying the same logic to an appeal preferred under Section 130 of the Customs Act, 1962 it can be safely concluded that the existence of a substantial question of law is a sine qua non for exercising the jurisdiction by this Court under Section 130 of the Customs Act, 1962. 24. The Apex Court in the case of "Chunilal v. Mehta & Sons Ltd. vs Century Shipping & Manufacturing Com....
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....ously; or (iii) the courts have wrongly cast the burden of proof. When we refer to 'decision based on no evidence', it not only refers to cases where there is a total dearth of evidence, but also refers to any case, where the evidence, taken as a whole, is not reasonably capable of supporting the finding." 26. Thus, if the Appellate Tribunal has ignored the material evidence available on record or has acted on no evidence, same shall in light of the above observations made by the Apex Court can be considered while deciding the substantial question of law so formulated by the High Court. 27. Let us now consider the substantial questions of law formulated by this Court by its order dated 19.03.2024. 28. For the sake of convenience, the substantial questions Nos. 1 and 2, formulated by this Court, by order dated 19.03.2024, are taken up for consideration, together. 29. There is no dispute at the bar regarding the fact that the betal nut is not a specified good with regard to which the Central Government have issued any notification in the Official Gazette under Section 123 (2) of the Customs Act, 1962. Therefore, the provision regarding the burden of proof as mentioned in Section....
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....ase. 33. In any view of matter, the question of law which is involved in this case is whether the burden of proof of showing that the seized goods are smuggled, in case of the goods, which are not notified under Section 123 (2) of the Customs Act, 1962 would be on the Customs Department or on the person from whom such goods have been seized. The said question has already been decided in a catena of judgments. Moreover, there is also no ambiguity in the statute also in that regard. 34. In the case of "Commissioner of Customs (Preventive) and Another Vs. Smt. Nemluni" (Supra), a Division Bench of this Court has held that in case of betal nut, which is not a notified good under Section 123 (2) of the Customs Act, 1962, the initial burden to show that the materials are smuggled lies on the revenue authority. The question as to on whom the burden of proof would lie in case of goods not notified under Section 123 (2) of the Customs Act, 1962 is clear from the statutory provision contained in Section 123 of the Customs Act, 1962 itself and same has also been clarified by the Co-ordinate Bench of this Court in the aforementioned ruling. This Court is in full agreement with the observatio....