Onus is on Revenue to prove that Goods are Smuggled in Nature: CESTAT quashes demand of Customs Duty and Penalty [Read Order]

The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed demand of customs duty and penalty and held that Onus is on Revenue to prove that goods are smuggled in nature.

The issue involved in the appeal is whether the appellant is the importer and whether the duty and penalty have been rightly demanded from him. During investigation, statement of Vivek Bansal, Proprietor of M/s. Dee Vee Posters was recorded, who, stated that he procures the goods by personally visiting China or on email. For some of the goods like spectacles and its accessories, orders were placed by concerned persons, who were known through his CHA or other contacts.

Further he stated that in some cases, he was not aware of the actual price of the goods and such goods were directly purchased by the buyers in India and he facilitates for the import and delivery. He also stated that Atul Dhawan of Atul Traders (appellant) was mainly a buyer of lens, whom he knew through one Arora of Arora Opticals.

On search the stock found in the godown valued at Rupees two crores was also detained alleging non-production of register at the time of search. Statement of Atul Dhawan was recorded, who stated that he was engaged in trading of optical frames and glasses and thet he has paid advance for the goods to Vivek Bansal, in case required or paid through RTGS at the time of purchase from M/s. Dee Vee Posters.

Pursuant to investigation, show cause notice was issued demanding customs duty of Rupees twenty four lakhs on the allegation that the appellant is the ‘beneficial importer’ and have willfully suppressed the actual import value with intent to evade duty and as such, the duty is recoverable under Section 28 of the Act by invoking the extended period of limitation.

The whole case of the Revenue is based on the statements of the various importers, who supplied the goods to the importers and the Chartered Accountant of the appellant

A Bench consisting of Anil Choudhary, Judicial Member observed that “It is onus of the Revenue to give evidence for allegation that the goods are smuggled in nature. I further find that Revenue has not brought any evidence on record to allege that the goods found and seized in the premises of the appellant are smuggled goods.”

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