Customs Fails to Prove Foreign Origin of Seized Peas: CESTAT Quashes Vehicle Confiscation & Penalty [Read Order]

The Kolkata bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT), held that in the absence of any evidence to prove that seized green and yellow peas were of foreign origin, confiscation of the vehicle and imposition of penalty cannot be sustained.

Kanchan Devi, the appellant, filed an appeal before the Tribunal challenging the order which upheld confiscation of her vehicle and imposition of penalty under the Customs Act, 1962.

The case arose when the vehicle bearing registration number BR01GH-9594 was intercepted on 05.10.2020 near Maithi Toll Plaza. The driver produced an invoice showing transportation of “Khesari,” but upon search, 100 jute bags containing green peas and yellow peas weighing about 4,300 kg were recovered.

Statements of the driver were recorded, where he stated that he was transporting the goods on instructions received over phone and admitted that he had transported Nepali peas earlier for extra money. Based on suspicion that the goods were of foreign origin, the vehicle was seized under Section 110 of the Customs Act and a show cause notice was issued proposing confiscation and penalty.

The adjudicating authority ordered confiscation of the vehicle with an option of redemption fine and imposed penalty on the appellant. This order was upheld by the Commissioner (Appeals), after which the appellant approached the Tribunal.

The revenue argued that the goods appeared to be of foreign origin based on statements of the driver and opinion of traders, and on that basis, confiscation of the vehicle and imposition of penalty were justified.

No one appeared on behalf of the appellant, and the Tribunal proceeded to decide the matter on the basis of available records.

The single-member bench comprising Ashok Jindal (Judicial Member) observed that the main allegation against the appellant was that the vehicle was used for transporting goods of foreign origin. It observed that there was no documentary evidence on record to establish that the seized peas were of foreign origin.

The tribunal explained that since the goods in question were not notified under Section 123 of the Customs Act, the burden of proof lies on the Revenue to establish that the goods are of foreign origin. The tribunal pointed out that the Revenue failed to discharge this burden, as mere statements of the driver or opinion of traders cannot conclusively establish foreign origin of goods.

The tribunal held that in the absence of proof of foreign origin, the confiscation of the vehicle could not be sustained and consequently, redemption fine and penalty imposed on the appellant were also not valid. The tribunal set aside the impugned order relating to confiscation and penalty and allowed the appeal with consequential relief.

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