MAQSOOD ALAM AND ORS. Vs. C.C.
LAWS(CE)-2015-2-14
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Decided on February 18,2015

Maqsood Alam And Ors. Appellant
VERSUS
C.C. Respondents




JUDGEMENT

R.K. Singh, Member (T) - (1.)THESE appeals have been filed against Order -in -Original dated 30.11.2009 in terms of which (i) 14,609 kgs. of betel nuts valued at Rs. 13,46,400/ - was confiscated, (ii) truck No. UP 78 BT -0484 valued at Rs. 10 lakhs was confiscated and ordered to be released on redemption fine of Rs. 2 lakhs and (iii) penalties on the following persons of amount mentioned against each of them were imposed: -
The facts briefly stated are that the Customs authorities checked a truck at Kasaya Road, near Sonbarsat and found it to be carrying betel nuts. The driver of the truck stated that betel nuts were sent by M/s. J. Maqsood & Co., Arariya (Bihar) to M/s. R.K. Enterprises, Kanpur. On examination, the Customs authorities suspected on visual examination that the betel nuts were of the type smuggled from Nepal and therefore conducted further investigation. During investigation M/s. Bahubali Attraction Pvt. Ltd., Kolkata confirmed that they had purchased betel nuts on payment of VAT from M/s. Pragati Consumer Co -operative Store and M/s. Agradoot Consumer Co -operative Society. The said co -operatives in their invoices duly referred to purchase of betel nuts from National Cooperative Consumers Federation of India Ltd. (NCCF), Siliguri under Invoice No. 058, dated 29.03.2008. M/s. Bahubali Attractions Pvt. Ltd. duly confirmed that they had supplied betel nuts out of the quantity purchased by them from the said two cooperatives to M/s. J. Maqsood & Co., who in turn confirmed to have sold them to M/s. R.K. Enterprises. The Customs authorities found some discrepancies in Form No. 31 and also found some bags having the label Triveni Calcutta In transit to Nepal. During enquiry, NCCF representative stated that they never sell in uniform packages while the impugned goods were found to be in uniform package of 80 kgs of each. The cooperative stores in Kolkata from which M/s. Bahubali Attractions Pvt. Ltd. claimed to have purchased the goods as well as the NCCF persons after visual examination stated that the impugned goods were not of the kind sold by them. Having regard to these evidences, the adjudicating authority passed the order as mentioned above.

(2.)THE appellants have contended that M/s. Bahubali Attractions Pvt. Ltd., bought the goods in the month of April, 2008 and the said goods as per the invoice of the cooperative societies were sold by the NCCF in the month of March, 2008 and M/s. Bahubali Attractions Pvt. Ltd. sold the goods to M/s. J. Maqsood & Co in the month of May, 2008 and it is not possible for anyone after so long to claim merely on visual examination that the goods are not the same as were sold by them. They stated that M/s. Bahubali Attractions Pvt. Ltd. have their processing unit at Kolkata, where they packed these goods in 80 kgs. packages and that the markings Triveni, Kolkata in transit to Nepal, which was found on a few packages could have been used by them for packing. They stated that there is no evidence that the goods were smuggled from Nepal.
Departmental Representative, on the other hand, reiterated the adjudication order and states that it is sustainable to infer by visual examination that the betel nets were of foreign origin.

(3.)THE core issue to be decided in the present appeals is whether the impugned goods were of foreign original and were smuggled. It is seen that betel nuts are not notified under Section 123 of the Customs Act, 1962. Consequently, the onus to prove that the goods are of foreign original and are smuggled is squarely on Revenue and this onus cannot be discharged merely on the basis of suspicion. Neither in Show Cause Notice nor in adjudication order any evidence has been produced as to from where the goods have been smuggled and what is the origin thereof. It is seen that Shri Maqsood Alam has confirmed that the goods were sent by him to M/s. RK Enterprises, who has also confirmed having placed the order therefor. M/s. Bahubali Attractions Pvt. Ltd. has accepted having supplied the goods to Shri Maqsood Alam and has also claimed along with the evidence of cash memos that they had bought almost 46 tons of betel nuts under various cash memos (on payment including VAT) from two cooperative societies, which in turn had bought the goods from NCCF and the cooperative societies have mentioned the invoice numbers of NCCF under which the goods were bought by them (i.e., the cooperative societies). The adjudicating authority has essentially relied on the visual opinion of the customs authorities that the goods are similar to the goods which are smuggled from Nepal and statements of the cooperative society and NCCF personnel given after visual examination of the impugned goods that they are not those sold by them. There is force in the appellants contention that the goods were sold to NCCF in the month of March, 2008, which in turn were sold by the cooperative societies in the month of April, 2008 and were further sold by M/s. Bahubali Attractions Pvt. Ltd. in the month of May, 2008 and it is not legally valid to treat the opinions of the personnel of the cooperative societies/NCCF based on mere visual examination of the impugned goods after so many months as a sustainable legal evidence, more so because they sell betel nuts to various customers and cannot be reasonably expected to remember whether the impugned goods were sold by them or not. In any case, an opinion based on visual examination of betel nuts cannot be accorded a legal force to sustain the allegation of smuggling as has been held by various judicial pronouncements. In the case of CC (Preventive) Vs. Dugarmal Mohata [ : 2006 (200) ELT 522 (Cal)], the Kolkata High Court held that trade opinion cannot form the basis or foundation to establish the fact that seized betel nuts were either of smuggled character or were of foreign origin and smuggled into India from Nepal. In the case of CC (Preventive) Vs. Raj Kumar Jaiswal [ : 2006 (204) ELT 561 (Cal)], the Kolkata High Court observed that if Revenue is unable to disclose even name of foreign country where goods are allegedly manufactured and at same time, is unable to produce anybody who actually smuggled any part of goods from Bangladesh and in the report on result of chemical examination there is no indication as to foreign origin, Tribunal committed no illegality in setting aside order of confiscation and penalty. In the case of CC (Preventive), Mumbai Vs. Aakash Enterprises [2006 (205) ELT 23 (Bom.)], the Bombay High Court observed that the Tribunal s finding that in cases of non -notified goods, burden lies on Revenue to prove illegal entry into country is correct and that the burden lay on the Department to produce some material/evidence to establish that seized goods were smuggled goods. Similarly, in the case of CC (Preventive), Mumbai Vs. Shri Ganesh Enterprises [2006 (199) ELT 208 (Bom,)], the High Court reiterated that the burden lay on the Department to produce some material/evidence to establish that seized goods were smuggled goods.
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