Legal principle

Where seized goods are not notified under Section 123 of the Customs Act, 1962, the onus of proving that they are of foreign origin lies on the Revenue, and mere seizure on a belief or suspicion of foreign origin cannot sustain confiscation or penalty if that burden is not discharged.

Court decision

The Tribunal allowed the appellant's appeal: it held the impugned proceedings unsustainable, set aside the order of absolute confiscation, held no penalty imposable on the appellant, and granted consequential relief, if any.

Facts

Acting on information from the 5th Battalion, Assam Rifles, Customs (Preventive) officers raided a godown at Oriental Colony, Dimapur on 19.06.2020 and found 1550 bags containing 91,000 kgs of areca nuts with foreign-language inscriptions, valued at Rs. 63,45,000, seized under Section 110 of the Customs Act, 1962. The godown caretaker, Shri Lalan Kumar, was arrested under Section 104 and, in his Section 108 statement, attributed ownership of the goods to the appellant, Shri Pawan Kumar. Samples sent to the Food Analyst and Plant Quarantine Station were found unfit for human consumption. On this basis the Commissioner of Customs (Preventive), NER absolutely confiscated the areca nuts and imposed a penalty of Rs. 6,35,000 on the appellant under Section 112(b) of the Customs Act, 1962.

Key provisions

• Section 108, Customs Act, 1962 — Power to summon persons to give evidence and produce documents
• Section 112(b), Customs Act, 1962 — Penalty for improper importation of goods
• Section 111(b), Customs Act, 1962 — Confiscation of improperly imported goods etc
• Section 123, Customs Act, 1962 — Burden of proof in certain cases
• Section 7(1)(c), Customs Act, 1962 — Appointment of customs ports, airports
• Section 104, Customs Act, 1962 — Power to arrest
• Section 110, Customs Act, 1962 — Seizure of goods, documents and things