1. These are three appeals filed by the above-captioned appellants.
Since a common question of confiscation of betel nuts is involved in all the three appeals, I am deciding the instant appeals by a consolidated Order. The facts in brief in Appeal No. CSM-139/04 are as follows: 1.1. The Customs Officers of Purnea and Katihar visited Katihar Railway Station and got the Brake Vans of Mahananda Express and North East Express, opened before the Railway Officials. On opening the Brake Vans, different numbers of bags containing betel nuts, poppy seeds etc. were found lying inside the said Vans. It was also observed by the Customs Authorities that the qualities of the consignments were different from those grown in the Indian Territories. On demand, the Guard of the respective Train produced different PW Bills of different dates. As per those PW Bills, it was found that the goods in question were booked from different Railway Stations to different destinations. But the names and addresses of the consignors/consignees were not visible. The goods in question were seized under Section 110 of the Customs Act, 1962 on a reasonable belief Page 476 that they belonged to third country origin and had been brought into India illegally. The Customs Officers made a follow-up investigation and issued the show cause notices to different parties under the various provisions of the Customs Act, 1962. The lower authority confiscated absolutely some of the betel nuts and in a few cases where the owners had claimed the goods, the adjudicating authority confiscated the betel nuts, but allowed the same to be redeemed on payment of Redemption Fines, and different amounts of penalties were also imposed on various persons.
1.2. Some of the persons had filed appeals before the Commissioner (Appeals), who vide his Orders-in-Appeal, confirmed the Orders passed by the lower authorities. Out of the four parties relating to the Order-in-Appeal No. 160-163/PAT/CUS/APPEAL/2004 dated 21.7.2004, one Shri Bijoy Kumar Lohia @ B. Kumar @Bijoy Lohia has filed an appeal before the Tribunal against the said Order-in-Appeal passed by the Commissioner (Appeals). In other two cases in Appeal Nos.CSM-140-141/04, vide the Order-in-Appeal Nos. 164 AND 165/PAT/CUS/APPEAL/2004, both dated 21.7.04, the Customs Authorities have absolutely confiscated the betel nuts in question.
2. Heard Shri K.P. Dey, learned Advocate on all the three appeals. He submits that the betel nuts in question are not covered under Section 123 of the Customs Act, which reads as follows: 123. Burden of proof in certain cases - "(1) Where any goods to which this section applies are seized under this Act in the reasonable belief that they are smuggled goods, the burden of proving that they are not smuggled goods shall be; (a) in a case where such seizure is made from the possession of any person, - (ii) if any person, other than the person from whose possession the goods were seized, claims to be the owner thereof, also on such other person; (b) in any other case, on the person, if any, who claims to be the owner of the goods so seized.
2.1 Shri Dey, learned Advocate submits that these goods are not notified goods under Section 123 of the Customs Act, 1962. As such, the burden of proving that the goods in question are not smuggled ones will lie on the Department. The Customs Authorities have not been able to discharge this function at any stage that these goods were smuggled goods. The Commissioner, however, has observed that the onus cast on the Department stands discharged. In support of his observation, the Commissioner has relied upon the Honourable Supreme Court's decision in the case of Kanungoo & Co v. Collector of Customs, Calcutta . Page 477 The Advocate submitted that the case relied upon by the Commissioner (Appeals) deals with the goods notified under Section 123 of the Customs Act as such not applicable in these cases.
The Advocate, further contends that the fact that the adjudicating authority as well as the Commissioner (Appeals) has put the burden on the appellants to prove that the goods in question were not smuggled, is not correct. He further submits that the Department did not discharge their initial burden that the goods are of foreign origin, but by relying upon the opinion of traders, it has been held by the Commissioner (Appeals) that these goods are of third country origin.
The betel nuts are non-notified goods under Section 123 of the Customs Act, 1962 and is under O.G.L. He also submits that this Tribunal in a number of cases has held that the opinion of the legal traders are not sufficient to hold the goods to be of foreign origin In support of his submissions, learned Advocate has cited the following decisions: (a) in the case of Comr. of Customs (Prev. ), WB., Kolkata v. Sudhir Saha;Kukil Das and Ors.
v. CC, Patna.
3. Heard Shri Y.S. Loni, learned J.D.R. for the Revenue who has reiterated the findings of the lower authority and the Commissioner (Appeals).
4. I find that the goods in question are betel nuts, which are not covered under Section 123 of the Customs Act, 1962. I also find that the goods have been held to be smuggled based on some local trade opinion. Honourable Kolkata High Court in the case of C.C. (P), WB, Kol. v. Sudhir Saha referred to above, has observed at para 4 as follows: 4. The provision relates to the burden of proof in certain cases, therefore, it cannot have a general application and the opening sentence begins with the phrase 'where any goods to which this section applies'. Therefore, it relates to goods to which the section applies; and the section is made applicable by reason of Sub-section (2) to gold (and manufactures thereof) watches and any other class of goods that may be specified by the Central Government by notification in the Official Gazette. Therefore, Section 123, which is a departure from the normal rule of evidence, is applicable only in respect of certain cases where Section 123, applies which has no general application. Under the rules of evidence one cannot be called upon to establish a negative proof. Burden always lies upon him who alleges a particular fact. Particularly when the provision is penal in nature, the Page 478 burden lies on the prosecution. Section 123 curbs out exception to the general rule of evidence and creates a special rule applicable to the cases contemplated under Sub-section (2) viz. gold and manufactures thereof and notified goods. Section 123 does not apply to non-notified goods in respect whereof the general rule of evidence is to be followed.
4.1. I find that the Tribunal in a number of cases has held that the trade opinion taken by the Customs cannot take the place of legal evidence. The betel nuts are non-notified items. However, it is an admitted fact that the betel nuts in question are grown in Assam, Meghalaya and its adjoining areas. But the Revenue could not be able to establish that the seized betel nuts are of foreign origin or smuggled.
They could also not be able to produce any document relating to the smuggled activities. The whole Order of the Commissioner (Appeals) has been passed on mere suspicions. Suspicion, howsoever strong, cannot take the place of proof. As such, it is for the Revenue to prove by production of sufficient tangible evidence that the same had been smuggled into the country. They have not produced any evidence to this effect. Therefore, I do not find that the Customs have discharged its obligation to prove that the betel nuts in question had been smuggled into the country. In view of this, I allow the above-captioned three appeals filed by the two appellants and set aside the Orders passed by the Commissioner (Appeals). This Order is confined to the appellants who have come up in appeal before this Tribunal. The appeals are disposed of accordingly.