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TMI Blog2023 (7) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... equer was allegedly defrauded by a conspiracy, with insinuations of international collusion, that the kingpin, whom the investigators stumbled upon, confessed to and, thus, led to the offending imports now impugned before us. One set of appeals stems from adjudication of Commissioner of Customs (NS-I), Nhava Sheva and the other from proceedings before Commissioner of Customs, Central Excise & Service Tax (Appeals), Nagpur. 2. The alleged offence is that the 'betel nuts' were from Indonesia, the third largest producer in the world after India and Myanmar; at stake, in the first of the stories, is entitlement to concessional rate of duty afforded by notification no. 26/2000-Cus dated 1st March 2000 on import from Sri Lankan in pursuance of Indo-Sri Lanka Free Trade Agreement and denial thereof leading to differential duty liability by application of standard rate on tariff value notified for the said goods. Eight containers, for which bills of entry no. 2501632/18.07.2017, no. 2501663/18.07.2017, no. 2914587/ 19.08.2017 and no. 2914588/19.08.2017 were filed by M/s Silver Export, a partnership of S/Shri Sayeed Ahmed Sheikh and Mujeeb Mehmood Begawala, that Shri Ghulam Farooq Noorani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bags bearing markings, including that of "BUDIMAN 90', of which 106.11 MT were believed to be that of M/s SA Enterprises, sole proprietorship of Shri Sayeed Ahmed Sheikh. Through a series of statements recorded under section 108 of Customs Act, 1962, it was set out that the 'betel nuts' had been transported from Assam and had been stored in the warehouse at the instance of Mr Ghulam Farooq Noorani. On completion of investigations, it was charged that '80. The present show cause notice is being issued for confiscation of the 106.11 MT of betel nuts seized by the department and appears to be smuggled goods of Indonesian and Myanmar origin and further appears to be brought clandestinely via Myanmar - India border and for the penal action against the persons concerned with violating the provisions of Customs Act, 1962.' in show cause notice dated 28th July 2018 and was absolutely confiscated for being unfit for human consumption in adjudication that was upheld in order [order-in-appeal no. MKR/123-129/CUS/NGP/2020-21 dated 17th March 2021] of Commissioner of Customs, Central Excise & Service Tax (Appeals), Nagpur now impugned before us . 4. Doubtlessly impugned before us is the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n and, under the grab of acting only to deter imports from other countries. Loss of revenue by misuse of the preferential route is certainly repugnant to the objectives of the agreement and there can be no cavil on action initiated against such misuse subject to satisfaction that misuse has been credibly set out in the manner prescribed. Cavil about, and rejection of, detriments, there will be if such determination of misuse is a tale built only upon surmise and presumption. And that is the story in these customs cases. 7. It is contended by Learned Counsel that the explanation of the appellant before the investigators at Nagpur that the 'betel nuts' had been locally sourced, as evidenced by original bills issued by M/s CR Stores of Assam furnished on 10th September 2017 itself, had been imperiously discarded. Further, Learned Counsel bemoaned rubbing salt on wounds by placing reliance on inculpatory statements recorded under threat and coercion that, at the first available opportunity, were retracted before court of law before being brought to the attention of the Human Rights Commission. Charging that every canon of law was violated by officers sworn to obey, and abide by, the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven more scathing in its criticism of action under Customs Act, 1962 thus '12. Having heard Learned Senior Counsel for the petitioner and Learned Additional Solicitor General of India, this Court is of the considered opinion that once the Learned Coordinate Bench of this Court has held that in absence of there being any material to show that M/s. Arecanut Research & Development Foundation, Mangalore is an accredited laboratory by competent authority under the Act and Rules, it's report cannot have a consequence of fastening of any legal liability and 'No legal liability can flow from the report of such an institution' the respondent authorities were not justified in again relying upon the ARDF Mangalore's report to justify the seizure in question. In fact such an attempt of the respondent authorities would be contemptuous in nature as it is likely to cause harassment to the traders, by not following the judgment of the Court. xxxxx 15. This Court is of the opinion that in absence of there being a standardized laboratory test for tracing the country of origin, established under some statute and such Labs have been accredited by the competent authority and the Labs could have t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oprietary food and is unsafe as per section 3(i)(22)(x) of food safety & standards Act, 2006 along with Rules & Regulations, 2011. The samples were also sent to ARDF, Mangaluru sent test report dt. 25.4.2018 and confirmed the country of origin of betel nut. As per report, the betel nut was of Indonesian & Myanmar origin. 23.3 Their further contention is that the cross-examination of the Officer/ Chemist from Arecanut Research Development Foundation (here-in-after referred to as 'ARDF'), Mangalore, who had reported the samples of Betel Nuts in question to be of Indonesian or Myanmar origin, was not allowed and thus, Principles of Natural Justice have been violated. 23.4.1. In this regard, I have gone through the above relied upon judgments and the appellant's submission. I find that the Lower Authority has correctly observed that ARDF is a well known Institute in the field of research of Betel Nuts. They are well equipped and had modern scientific techniques to identify the origin of goods. I agree with the observation of the lower authority that challenging the domain knowledge of expert of ARDF is baseless, and request of the appellants for cross-examination of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .11 MT seized goods and sent to the Arecanut Research & Development Foundation, Mangaluru, Karnataka. The Arecanut Research and Development Foundation, Mangaluru is a well known name in the research on Betel Nut and they have advanced technologies to identify the goods properly. Geographical Indicators are specific and based of morphology, physical appearance, and color characteristic, specific patterns and designs on products can indicate the geographical areas in plants also. That is why G.l. Patent (Geographical Indicators) is prevalent. In this case also The Arecanut Research and Development Foundation, Mangaluru has certified vide test report dated 25.4.2018 (RUD-88) of samples drawn out of 106.11 MT seized goods had confirmed the country of origin of betel nuts as Indonesian origin and Myanmar origin. Further I find from the various statements of persons recorded and from the documents retrieved from the hard disks it confirms that smuggling of foreign origin betelnut without filing customs documents and without paying customs duty was going on since 2014-15. In the excel sheet (RUD- 90) there have been details of consignments of betelnuts which had been imported in the mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers in M/s Silver Exports, permitted Shri Gulam Farooq Noorani to use the cover of their 'import export code (IEC)' for indulging in wrongful availment of exemption, extended to 'betel nuts' from Sri Lanka, on goods of Indonesian origin. 13. The goods, packed in 'loose form' in 'gunny bags' made of jute, marked with 'BUDIMAN-90', were found to tally with declared weight but substantially fewer than the declared number of bags. It was Shri Gulam Farooq Noorani who apparently confessed to the investigators that the marking on the bags were that of an Indonesian entity, M/s Swee Choon Co Pte Ltd, that Shri Deepak Sadhwani was the financier of the consignment and that he had sourced and arranged documentation for enabling M/s Silver Export to file bills of entry. The two partners admitted that they were in receipt of payments for each such container. At the same time, an employee of M/s RR Shipping Pvt Ltd, the Indian arm of M/s Garuda Container Line which had issued bills of lading for its parent, M/s Sun Ocean Logistics Pvt Ltd, intimated receipt of mail about movement of containers from Singapore to Colombo. It is on record that Sri Lankan Customs, vide letter dated 11th September ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notification applicable at the relevant time when the imports were made from Indonesia. in the adjudication order impugned before us. That statements recorded in other proceedings could be insinuated into this proceedings was found thus '49.4. Thus, I find that these Statements recorded by the gazetted officer under the provisions of Section 108 of the Customs Act, 1962 is an evidence that can be used in any other proceedings whether or not such statements were recorded during the course of investigation of the impugned 4 Bills of Entry as long as the facts contained in these statements are relevant to the present proceedings and the same have been disclosed to the Noticees.' The adjudication is, thus, founded upon statements in another case, the markings on the bags and the two sets of bills of lading pertaining to containers that Sri Lankan Customs reported as not having been destuffed at Colombo before being deployed in carriage of 'betel nuts' from there even in the face of the documentation for clearance having been filed. 15. The authenticity of declaration of Sri Lankan origin is to be established by submission of 'certificate of origin' as provided for in rule 11 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f not, have been judicially determined as enforceable through courts of law. Here is an institution of the State of a contracting party that places such premium on lack of trust in institutional mechanism established by the Agreement, and with overriding effect, as to superimpose conventional ascertainment relied upon in domestic investigations under the garb of implied national interest. To approve of such travesty, merely on the ground of noble intentions, is to put the stamp of approval on whittling of the authority of the State from within. We cannot do so. 16. Seizure of the consignment at Nagpur is a brazen act of intrusion. As pointed out by Learned Counsel, 'betel nuts' are not included in section 123 of Customs Act, 1962. Implied resort to this particular exception to the principle of smuggling having to be established by customs authorities, by seizure of goods that were not in a customs area and requiring the owners to produce evidence of provenance, is contrary to Customs Act, 1962. Going a step further, even the invoices furnished were discarded without any examination on the part of the original authority. The scope of section 123 of Customs Act, 1962 has been implic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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