- (1.) The Additional Commissioner of Customs on 24th April, 2009 passed a detailed judgment and arrived at a finding that 11,800 bottles of phensedyl Cough Linctus Syrup were attempted to be illegally exported by Sri Snehangshu Ghosh, the respondent before us. He passed orders for confiscation and also imposed penalty. The finding recorded by him reads inter alia as follows: "The main question to decide now is that whether Snehangshu Ghosh who purchased the Phensedyl Linctus on basis of his license issued for his shop Ghosh Medical Balurghat which is about 4 Km. from Indo -Bangla border, was going to illegally export the same. Phensydyl Linctus is a drug, formulation containing codeine and is often misused as a psychotropic substance and abused by drug addicts in Bangladesh. Hence, there is great demand of this drug as it is cheaper than narcotic drugs. From the trend of rampant smuggling of this drug along Indo -Bangla border, the Government vide its Notification No. , dated 2 -4 -2008 notified this drug and restricted its movement in large quantities and without proper prescription in areas up to 50 km. from the Indo -Bangla Border. NDPS Act has also listed Phensydyl in its schedule of Psychotropic substances. From the statement of Snehangshu Ghosh, I find that he has admitted he has a drug licence since 2004 but was not doing any drug business. It is also a fact that his medical shop is at Balurghat a mere 4 km. from Indo -Bangla Border, and that he has admitted that he was to sell the drugs. In view of his own admission, there is enough evidence to suspect that his medicine shop is only a front and there is no legitimate business or else he would be able to produce the books of sale, vat paid receipts of his shop and his transaction conducted since 2004 to prove his legitimate business. This also proves that there is no evidence of consumption of such large quantity of Phensydyl in Balurghat, South Dinajpur. The fact he could not produce any books of sale done from his medicine shop which substantiates this complicity in illegal business of illegal export of drug formulation as specified in SCN. The fact that he was staking such a huge quantity of a highly sensitive and notified drug to Balurghat, South Dinajpur which is small bordering town in Indo -Bangla Border just about 4 km. from the border despite the fact he was not doing any business in drugs is proof enough that he was attempting to illegally export the notified drug formulation through Indo -Bangla Border. Had the Customs Officers not intercepted the notified drug the same would have been illegally exported to Bangladesh. The department has amply proved by their investigation that Snehangshu Ghosh who is not dealing with drugs formulations in any ligitimate manner under proper disposal that is mandatory for prescription drugs is purchasing bulk of notified drug and taking it to the Indo -Bangla Border for illegal export to Bangladesh. The Hon'ble Tribunal in the case Kulbhusan Jain v/s. CC, New Delhi - : 2003 (154) E.L.T. 169 (Tri. -Delhi) has held that "initial burden was on the department to prove that the goods were of smuggled nature, cannot be accepted." As no doubt, the initial burden in a case of seizure of foreign origin of the goods remain on the department to prove the smuggled character of the goods, but it is not always, essential for the department to discharge this burden only by adducing direct evidence. This burden can be discharged by the department by bringing on record the facts and circumstances leading to conclusion that the seized goods were smuggled one. The aid of provisions of Ss. 106 and 114 of the Evidence Act can be taken by the department. Sec. 106 of the Evidence Act creates exception to the general rule that burden of proof rests on the party who substantially asserts the affirmative of an issue. It enacts that when fact is established within the knowledge of any person, the burden of proving that fact is upon him. Even the Apex Court in case of CC, Madras v/s. D. Bhoormull - : 1983 (13) E.L.T. 1546, while dealing with a question of burden of proof how to be discharged in a case of seizure of smuggled goods, has observed that basic principle underlying Sec. 106 of the Evidence Act (corresponding to Sec. 111(d) of the Customs Act), is applicable and department would be deemed to have discharged its burden if it adduces so much evidence, circumstantial or direct, as is sufficient to raise presumption in its favour with regard to the existence of facts sought to be proved. The Apex Court has also in that case further observed that in the absence of direct evidence of illicit importation of the goods, if there were several circumstances of determinative character which complied with inference arising from the dubious conduct of the party, an inference could be drawn that seized articles were smuggled goods. Similarly, Sec. 114 of the Evidence Act lays down that the Court may presume the existence of any fact which it thinks likely to have happened, regard being had to the common cause of natural events, human conduct and public and private business, in their relation to the facts of the particular case. The Apex Court in the case of Shah Guman Mal v/s. The State of Andhra Pradesh, : 1983 (13) E.L.T. 1631 (S.C.) : : 1980 AIR SC 793, while dealing with the question of burden of proof in a case of seizure of gold biscuits not in accordance with the Act and where presumption under Sec. 123 of the customs Act, 1962 was not available to the prosecution, was pleaded to observe that presumption under Sec. 106 and 114 of the Evidence Act could be availed by the prosecution in special fact of the case. In the instant case Snehashish Ghosh, is unable to establish by terms of any evidence that the huge quantity of notified drugs was for legitimate sale through his medicine shop. Drawing inference from the above judgment, it can be said the Department can draw conclusion on circumstances of determining nature and imply smuggling by the party. In smuggling cases department is not expected to prove with mathematical precision. Customs cases are proved on preponderance of probability. Hence I find Snehangshu Ghosh guilty of attempting to illegally export the notified drug Phensydyl Linctus. He is also liable for penalty as offence is established." Aggrieved by the order, Sri Ghosh preferred an appeal before the Commissioner of Customs. The Commissioner of Customs, without caring to disclose any reason whatsoever as to why were the views, taken by the Additional Commissioner of Customs, wrong and without discussing any evidence recorded the following finding: "From the evidence on record, the goods has just come from Lucknow. This is not a case where there was an attempt being made for illegal export to Bangladesh. In fact there is not even a preparation made, a step prior to making of an attempt. Further, these goods are not notified goods under Sec. 11 or under Sec. 123. Hence there was no reason why the goods should have been seized or confiscated under the Customs Act. I find that the appellant had produced the goods after observing all the legal formalities for supplying the goods to different retailers. The Department, on the other hand, could not adduce any evidence to the contrary. It is only on the basis of the assumption that had the goods not been intercepted the same would have been brought to Balurghat where there is a trend of smuggling across the border, and would have been smuggled out of India. This is farfetched."
(2.) We are really surprised to see that a quasi judicial authority acted in the manner as did the Commissioner of Customs. The Additional Commissioner had arrived at a finding that there was an attempt to illegally export the goods to Bangladesh. It was as such imperative for the appellate authority to point out reasons why was the aforesaid finding recorded by the Additional Commissioner wrong. The appellate authority did not do so. The appellate authority held that there was not even a preparation. No reasons have been disclosed for the aforesaid finding. We do not wish to make any comment as regards sufficiency or insufficiency of the evidence to show that there was in fact preparation made by the respondent because that would amount to loading the dice which should be avoided considering the order we propose to pass. We are far more surprised by the conduct of the learned Tribunal which dismissed the appeal preferred by the Revenue simply by quoting Paragraph 12 of the judgment of the Commissioner of Customs and adding thereto three sentences, which read as follows: "The main contention of the appellant is that the Commissioner (Appeals) has not taken into consideration the facts of the case. However, they could not produce any evidence to discharge the burden of proof. I find that the Commissioner has given cogent findings. I do not find any infirmity in the impugned Order. Hence, the Revenue's appeals is dismissed. The respondent submitted that the goods are perishable and requested for early communication of Order."
(3.) We are surprised that the learned Tribunal opined that the Revenue could not produce any evidence to discharge the burden of proof. The reasons assigned by the Additional Commissioner of Customs were not demonstrated to be fallacious. Without doing that, the Commissioner of Customs or the Tribunal could not have tinkered with the order of the Additional Commissioner of Customs. The order under challenge is, therefore, set aside. The order passed by the Commissioner of Customs is also set aside. The matter is remanded to the Commissioner of Customs with a direction to hear the parties and to pass a reasoned order within two months from the date of communication of this order. It is desirable that the Commissioner of Customs who passed the order allowing the appeal shall recuse himself from hearing the matter unless there is no other officer who can here out the appeal. In order to avoid the loss arising out of the goods becoming unusable, it would be open to the respondent to apply for sale of the goods in accordance with law and retention of the proceeds in a short term fixed deposit to the credit of the aforesaid lis.;