CESTAT Raps Revenue for Presumption-Based Confiscation, Directs Return of Betel Nuts Fit for Consumption [Read Order]
The Bench noted that Revenue Relied Entirely on Assumptions, Without Producing any Evidence
The Kolkata Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has set aside the absolute confiscation of betel nuts and the penalties imposed on two appellants, holding that the Customs Department had proceeded purely on presumption without any supporting evidence.
The case arose when Rajesh Kumar Jain, Proprietor of M/s Saraogi Traders, sold 150 kg of betel nuts to one Pravin Kumar Agarwal by means of a tax invoice dated 28.09.2020. The goods were transported through a public bus plying between Siliguri and Purnia. On 29.09.2020, the bus was intercepted by officers of the Raigunj Customs Preventive Unit, who recovered a total of nine bags of betel nuts weighing 500 kg. The bus conductor produced documentation only for three bags corresponding to 150 kg.
Despite the appellants consistently maintaining that they were concerned only with these three bags, the Department presumed that the entire seized quantity belonged to them. A show cause notice was issued proposing absolute confiscation of all nine bags and imposition of penalties. The adjudicating authority accepted this presumption and ordered confiscation of the entire 500 kg, along with penalties under Section 112 of the Customs Act, 1962, which was later upheld by the Commissioner (Appeals).
When the matter was appealed before the Tribunal, the Bench comprising Ashok Jindal (Judicial Member) noted that there was no evidence whatsoever linking the appellants to the remaining 350 kg of betel nuts. It observed that the Revenue’s conclusion was based solely on assumption and that the appellants had produced valid documents establishing their ownership of only 150 kg. The Tribunal held that such unsupported presumptions could not sustain an order of confiscation or penalty.
Allowing the appeals, the Tribunal set aside the impugned order, directed the Revenue to release the 150 kg of betel nuts to the appellants in good and consumable condition, and held that no penalties were imposable. The decision reiterates that confiscation cannot be upheld in the absence of credible evidence and that ownership cannot be presumed merely on suspicion.
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