AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 1462
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..... Accordingly, samples were drawn from 51 containers before two independent witnesses and sent to "Arecanut Research & Development Foundation (ARDF)". As per the container-wise Test report received from ARDF, 05 containers containing the Betel Nuts of Indian Origin were released on 30.08.2014. DRI Kolkata seized the 46 other containers of Betel Nuts of foreign origin on 02.09.2014 and other 03 containers of Betel Nuts of foreign origin were subsequently seized on 26.09.2014. Out of the total quantity of seized goods, 94.28 MT Betel Nuts were consigned by M/s. Kumar Enterprise and 98.39 MT of Betel Nuts were consigned by M/s Kumar Traders & Company, firms owned by the present appellants herein, amongst others. 2.1. Shri Ramakanta Mourya, on behalf of M/s. Kumar Traders & Company and M/s. Kumar Enterprises in his statement recorded under section 108 of Customs Act, 1962, inter alia stated that both the said firms, namely, M/s. Kumar Traders & Company and M/s. Kumar Enterprises, have purchased the said goods from the market, where the value of the goods are within the range of Rs 275/- to Rs 305/- per Kg. They used to sell the said goods in a price ranging to between Rs 290/- to....
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....ers and sent the same for testing to the Arecanut Research & Development Foundation (ARDF); as per the container-wise Test report received from ARDF, the Betel Nuts seized from 46 containers were of foreign origin. In this regard, the appellants' submission is that the ARDF is not the proper authority to decide the foreign origin nature of the goods. Thus, they contend that the Test Report received from ARDF cannot be relied upon to conclude that the goods seized were of foreign origin. The Ld. Counsel for the appellants also pointed out that it is trite law that in the case of Betel Nuts, the onus remains upon the Department to substantiate by way of evidence that the goods were smuggled in nature; in fact, in terms of Section 123, the appellants herein are not at all required to discharge their burden unless the Department by way of cogent and independent evidence demonstrates that the goods impugned herein are smuggled in nature or the said goods are imported from outside of India. He states that in the present case, save and except, the report of ARDF, there is no other evidence on-record to conclusively come to a finding that the goods are smuggled in nature; the ARDF Report r....
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....orities have confiscated the Betel Nuts seized, on the basis of the Test Reports received from ADRF. In the present case, it is observed that except the report of ARDF, there is no other evidence available on record to conclusively come to a finding that the goods are smuggled in nature. The ARDF Report, which has been relied upon by the Department, has no evidentiary value and more particularly, as pointed out by the appellants, the said Institution does not have the infrastructure to determine the foreign origination or character of the Betel Nuts. Thus, it is seen that the Department has failed to discharge its onus that the goods were of smuggled in nature in the present case. Such onus cannot be discharged by the Department on the basis of mere suspicions and that too, by relying on the ARDF Report. Thus, we are of the considered view that the confiscation of the impugned goods ordered on the basis of ADRF Report in the impugned order, is legally not sustainable. 7.1. The same view has also been taken by the Hon'ble Allahabad High Court in the case of CC (Prev.) v. Maa Gauri Traders [2019 (368) ELT 913 (All.)]. The relevant portion of the said decision is reproduced below: ....
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....hed from a "question of law". In paragraph 65, citing the judgment in the case of Suwalal Chhogalal v. CIT, [(1949) 17 ITR 269 (Nag.)], the Court has held as under : "... A fact is a fact irrespective of evidence by which it is proved. The only time a question of law can arise in such a case is when it is alleged that there is no material on which the conclusion can be based or no sufficient material." 13. Further in Sewalal Chhogalal (supra) the Court also held in paragraphs 67 and 68 that :- "67. There is no prohibition to entertain a second appeal even on question of fact provided the Court is satisfied that the findings of the courts below were vitiated by non-consideration of relevant evidence or by showing erroneous approach to the matter and findings recorded in the Court below are perverse. [Vide Jagdish Singh v. Natthu Singh [(1992) 1 SCC 647 : AIR 1992 S.C. 1604], Prativa Devi v. T.V. Krishnan [(1996) 5 SCC 353], Satya Gupta v. Brijesh Kumar [(1998) 6 SCC 423], Ragavendra Kumar v. Firm Prem Machinery & Co. [(2000) 1 SCC 679 : AIR 2000 S.C. 534], Molar Mal v. Kay Iron Works (P) Ltd. [(2000) 4 SCC 285 : AIR 2000 S.C. 1261], Bharatha Matha v. R. Vi....
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....ny degree of probability that a prudent man, on its basis, could believe that the betel nuts were of foreign origin. 18. No other question was pressed by the Counsel for the Revenue. 19. In light of the above, since we do not find any infirmity with the judgment of the CESTAT, and also for the reason that no substantial question of law arises for the determination in the present appeal, the appeal is dismissed." 7.2. We also find that a similar issue has been examined by the Hon'ble High Court of Meghalaya at Shillong in Commissioner of Customs (Preventive), NER Region, Shillong v. Laltanpuii [2022 (382) E.L.T. 592 (Meghalaya)], wherein the Hon'ble High Court has rejected the appeal filed by the Revenue against the order passed by the Tribunal. The relevant observations of the Hon'ble High Court while arriving at the said decision are as follows: - "4. The Division Bench of the Tribunal recorded the finding that the confiscated betel nut is non-notified goods and therefore, burden to prove the fact of smuggling lies on the department and same has not been discharged. In this regard, the department relied upon the certificate issued by the Arecanut Rese....
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....unal rightly held that the burden is on the department to prove that the goods were of foreign origin. 5. In support of its conclusion, the Tribunal placed reliance on the judgment of this Court in the case of Commissioner of Customs (Preventive), WB, Kolkata v. Sudhir Saha, reported in 2004 (172) E.L.T. 26 (Cal.) = 2004 taxmann.com 1512 (Cal.). In the said decision, the Court held that betel nuts which were seized are not notified goods under Section 123 of the Customs Act and the said provision applies only in respect of goods which are smuggled and smuggled goods means something suggesting that they are of foreign origin and their recent importation from abroad. In this regard, reliance was placed on the decision in the case of Shantilal Mehta v. Union of India, reported in 1983 (14) E.L.T. 1715. 6. The Tribunal noted that the facts of the case on hand were identical to that of the facts in the case of Sudhir Saha and that the burden of proof to establish the smuggled nature of the seized goods was on the department and taking note of the factual position, the Tribunal held that the department miserably failed to discharge the burden cast upon them. Further, th....
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.... 1972. Furthermore, the bag containing the seized goods did not contain any foreign markings. Furthermore, the Tribunal noted that during the course of investigation undertaken by the DRI, no other incriminatory material was obtained either from the raids conducted or in course of interrogating witnesses that would indicate that the said goods were sourced from outside India. 8. Thus, based on presumptions and assumptions, it cannot be held that the goods were smuggled goods and in the absence of any evidence produced by the Revenue to discharge the burden cast upon them, in our view, the Tribunal noting the facts of the case had rightly granted the relief in favour of the respondents. Furthermore, there was no testing of the seized goods through any accredited Agency for determining any constituent property or characteristic that would indicate or establish foreign origin of the said goods. The Tribunal noted that the only evidence on the basis of which the proceedings were initiated and the order of adjudication was passed against the nine respondents is based on a statement recorded from the respondent in CUSTA 22 of 2022. All the respondents were arrested and produced ....