Parties: THE COMMISSIONER OF CUSTOMS (PREVENTIVE) AND ANR, THE ADDITIONAL COMMISSIONER OF CUSTOMS PREVENTIVE Vs SMTI. NEMLUNI AND RONNIE ZOLIANNGURA

Facts –

• The Respondents, SMTI. NEMLUNI AND RONNIE ZOLIANNGURA were issued with a show cause notice under Section 124 of the Act, 1962 confiscating their truck loaded with betel nuts. 
• It was alleged that the same were of foreign origin on the reasonable belief that the said betel nuts were illegally imported into India from Myanmar Border in violation of the provisions of Customs Act, 1962.
• The appellate authority dismissed the appeal holding that seized goods were of foreign origin and the confiscation orders are legal. However, the Appellate Tribunal allowed the appeal holding that the department has not proved the case that goods were smuggled goods.
• Being aggrieved the revenue filed an appeal.

Issue – 

• Whether findings of the Appellate Tribunal are perverse under the present facts and circumstances of the case?

Order – 

• The Single Bench of Hon’ble High Court observed that the revenue authority must have a reasonable belief that goods seized were smuggled goods and fall under the category of goods enumerated or notified under Subsection 2 of Section 123 of the Custom Act, 1962.
• Further, it is an admitted position that during examination GST Invoices and E-Way bills were produced. There is nothing on record to satisfy that the revenue officers had material before them to have satisfaction that the goods were of foreign origin and imported to India without due procedure.
• It is also an admitted fact that areca nuts or betel nuts are not a notified item under Section 123 (2) of the Act, 1962. That being so, the initial burden to show that the material seized is of foreign origin lies upon the revenue authority.
• Hence the burden of proof under Section 123 (1) of the Act, 1962 is not applicable, in the present case for the reason that the seized goods suspected to be of foreign origin were not notified goods under Section 123 (2) of the Act, 1962.
• There is nothing on record, to even have a prima-facie view that the goods were of foreign origin, there is also no credible expert opinion regarding the origin of the goods. Therefore, in the considered opinion of this court the learned Tribunal has rightly come to the conclusion based on apropos appreciation of material available on record. Therefore, the decision of the learned Tribunal cannot be treated as perverse.