Foreign Goods once Imported and Cleared for Home Consumption not subject to Self-Assessment Subsequently: CESTAT [Read Order]

The Customs, Central Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata bench has held that the foreign goods cannot be subject to self-assessment under section 17 of the Customs Act, 1962 after the same was imported and cleared for home consumption.

The Directorate of Revenue Intelligence received information and intercepted seven trucks with Betel nuts near Bairabi railway crossing area in Mizoram at Assam – Mizoram border on 01.07.2018 on the suspicion that they were of foreign origin. During investigation, the appellants produced GST invoices and E-way bills to assert that the goods were indeed of domestic origin. The department raised demand for want of sufficient documents.

Judicial Member PK Chaudhary Technical Member PV Subba Rao held that even if the goods are of foreign origin, if they have been imported and cleared for home consumption, they cease to be imported goods thereafter and the importer ceases to be the importer.

“Therefore, no duty can be assessed on such goods under Section 17 of the Customs Act. There is also no responsibility on the importer or on any other person from whom the goods are seized to keep or produce the import documents to establish their legal import once they have been cleared for home consumption. The goods can be used, sold, re-sold, etc. without any duty either on the importer or any subsequent buyer of such goods to keep or produce the import documents. Of course, if the goods have been smuggled into India not through the designated Customs Ports, Airports or Land Customs Stations, they will be liable for confiscation but it must be established that the goods have been smuggled so. In this case, the goods were clearly seized within India. The burden of proof shifts to the importer or the owner of the goods only when such goods are notified under Section 123 and betel nuts were not notified,” the Tribunal said.

“The Department has not proved in this case that the goods were smuggled goods. Unless Revenue can establish that the betel nuts have been imported illegally into India, they cannot be confiscated. Therefore, the impugned order upholding the impugned order of the Adjudicating Authority confiscating the goods on the ground that the appellants were not able to establish that they were not smuggled goods cannot be sustained as the appellants have no such responsibility. The Revenue, on which the burden of proof rests, has not established that the seized betel nuts were smuggled. It is immaterial whether the betel nuts were of foreign origin or not,” the Tribunal added.

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