Legal principle

Where goods are not notified under Section 123 of the Customs Act, the department bears the burden of proving smuggled/illegal import, and in the absence of evidence a mere documentary discrepancy such as a wrong consignee address cannot sustain confiscation or penalties under Section 112(b).

Court decision

The Tribunal allowed all three appeals: it held the goods were not liable to confiscation, set aside the confiscation and the redemption fine, and held the Section 112(b) penalties on Samsir Uddin, Sujit Mitra and Kalyan Saha unsustainable, setting them all aside, with consequential relief as per law.

Facts

Officers of the Headquarters Preventive Unit, Siliguri and Dinhata Customs Division intercepted a vehicle (MV AS-09-C-8007) on 13.12.2017 carrying 227 bags (17,500 kg) of dried areca nut/betel nut, along with a consignment note, tax invoice and challan issued by Samsir Uddin showing M/s Puja Traders, Dhupguri as consignee. Believing the goods were illegally imported in contravention of Section 11 of the Customs Act read with Sections 3(2) and 11 of the FTDR Act, 1992, the officers seized the goods and the vehicle under Section 110, and the goods were provisionally released to Sujit Mitra, power of attorney holder of owner Samsir Uddin. Investigation alleged that Samsir Uddin, Sujit Mitra and Kalyan Saha (proprietor of M/s Akash Trading Company) passed off smuggled third-country-origin betel nut as Indian produce by raising a tax invoice with a wrong address (M/s Gobinda Saha instead of Kalyan Saha). A show cause notice by the Joint Commissioner proposed confiscation under Section 111(b) & (d); the adjudicating authority confiscated the goods and imposed penalties of Rs.1,00,000 on Samsir Uddin and Rs.50,000 each on Sujit Mitra and Kalyan Saha under Section 112(b), upheld by the Commissioner (Appeals).

Key provisions

• Section 112(b), Customs Act, 1962 — Penalty for improper importation of goods
• Section 11, Customs Act, 1962 — Power to prohibit importation or exportation of goods
• Section 111(b), Customs Act, 1962 — Confiscation of improperly imported goods etc
• Section 108, Customs Act, 1962 — Power to summon persons to give evidence and produce documents
• Section 123, Customs Act, 1962 — Burden of proof in certain cases
• Section 110, Customs Act, 1962 — Seizure of goods, documents and things
• Section 3(2), Customs Act, 1962 — Classes of officers of customs