The Gauhati High Court (High Court of Assam, Nagaland, Mizoram, and Arunachal Pradesh) has dismissed the appeal observing that the burden of proof on seized goods that are not notified under Section 123(2) of Customs Act, 1962 lies not on the person from whose possession the goods were seized but with the Department of Customs.
The Commissioner of Customs (Preventive) and Additional Commissioner of Customs (Preventive) had confiscated seven trucks loaded with betel nuts suspected to be of foreign origin on the impression that the same was illegally imported from Myanmar.
The appellate tribunal ruled in favour of the assessee, setting aside the confiscation orders and penalties observing that the department had not sufficiently proven that the goods were smuggled, as the burden of proof did not shift to the petitioner in the absence of notification under Section 123.
The petitioner contended that the department has proven their case that the probability of the goods being smuggled as the respondent admitted receiving areca nuts brought in secretly at night.
The petitioner stated that the standard of proof under Section 123 of the Customs Act, 1962 is a preponderance of probabilities, not proof beyond reasonable doubt. The petitioner also contended that the presumption under the Evidence Act should not apply to Section 123 of the Act. The petitioner also argued that the seized areca nuts are unfit for human consumption and should be destroyed.
The respondent Smti. Nemluni, represented by Mr. N Dasgupta contended that the goods are neither of foreign origin nor smuggled. The respondent contended that the burden of proof lay with the Department of Customs to establish that the goods were smuggled.
The respondent argued that the department failed to provide evidence beyond a reasonable doubt so as to substantiate their findings as required by Section 123 of the Customs Act, 1962.
The respondent clarified that betel nuts were not listed or notified as prohibited or restricted goods under Section 123 of the Customs Act, 1962.
The bench stated that the decision of the appellate tribunal is not perverse and that the goods being unfit for human consumption after release is not a concern for the customs authority.
The Division Bench of Chief Justice Arun Dev Choudhury and Justice S.C. Keyal clarified that the burden of proof remains with the customs department, and mere suspicion or foreign origin is insufficient grounds for confiscation.
The Gauhati High Court found that the department had failed to establish beyond reasonable doubt that the betel nuts were smuggled goods.
In conclusion, the appeal was dismissed without cost as being devoid of any merit.
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