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2020 (12) TMI 377 - AT - CustomsSmuggling - Betel Nuts - highly perishable goods - foreign origin goods or not - confiscation of seized goods - imposition of penalties - Revenue bases its case on the certificate issued by Arecanut Research and Development Foundation (ARDF), Mangalore and the fact that the owners could not establish the Indian origin of the arecanut - HELD THAT:- It is found that investigation was only in the direction to conclude that there was no proof for indigenous and licit procurement of betel nut seized and that the claim of the appellants cannot be verified in some cases. The betel nut is not notified under Section 123 of the Customs Act, 1962 and therefore, the burden of proof lies with the department to prove the same. It’s not just enough to prove by negative inference. Allegation requires to be proved by cogent and positive evidence. We find that no such positive evidence has been put forth by the department. There is not even a reference or narration as to how and wherefrom the impugned goods are smuggled. We find that the Tribunal in the case of DHARMENDRA KR. JHA VERSUS COMMISSIONER OF CUSTOMS (P) , PATNA [2015 (11) TMI 1639 - CESTAT KOLKATA] held that betel nut is not a notified commodity under Section 123 of the Customs Act, Act 1962 and the onus is on the department that seized goods were in fact smuggled in to India. We find that the department has not discharged its burden. Revenue relies heavily on the certificate issued by Arecanut Research and Development Foundation (ARDF), Mangalore - various fora have held that the institute is not accredited and hence, the report is not reliable - It was held by High Court of Patna in M/S AYESHA EXPORTS VERSUS THE UNION OF INDIA AND ORS. [2019 (1) TMI 1633 - PATNA HIGH COURT] that in absence of any material to show ARDF Mangalore is accredited laboratory by competent authority under Act and Rules, it’s report cannot have consequence of fastening of any legal liability and ‘No legal liability can flow from report of such an institution’, hence authorities not justified in again relying thereon to justify seizure in question. Tribunal, in the case of COMMISSIONER, CUSTOMS (PREV.) , LUCKNOW VERSUS M/S MAA GAURI TRADERS [2018 (11) TMI 1668 - CESTAT ALLAHABAD], held that since betel nuts are also produced in India, in absence of any evidence that confiscated goods were illegally smuggled into India, same cannot be confiscated merely based on test report of an organization which later on also admitted that country of origin cannot be determined through test in the laboratory. The betel nut being non notified goods; burden to prove the fact of smuggling lies on the department and the same has not been discharged; the report of ADRF, Mangalore cannot be relied upon - On the issue of goods being held to be unfit for human consumption, it is held that as the goods are neither imported nor proved to be smuggled, no action by Customs is warranted. Seizure of impugned betel nut is not justified - appeal allowed - decided in favor of appellant.
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