Introduction: The case of Madan Kumar vs. Commissioner of Customs (CESTAT Kolkata) revolves around the confiscation of a consignment of 3420 kgs of betel nuts valued at Rs. 3,42,000/- that was intercepted during transportation. The driver fled, and no documentary evidence of the consignment’s legitimacy was provided at the time of interception.
1. Ownership Claim and Provisional Release: Madan Kumar claimed ownership of the seized betel nuts on 21/01/2013, stating that he was transporting them from Motihari to Patna for sale. He mentioned purchasing them from M/s. Om Sai Enterprises, who had acquired the goods through a Customs Division E-Auction. To secure provisional release, he deposited a redemption fine of Rs. 1,50,000/- and Customs Duty of Rs. 4,29,032/-.
2. The Defense Argument: Kumar’s advocate argued that the case was built on assumptions and circumstantial evidence due to the driver’s flight and inability to provide valid documents during interception. He contended that betel nuts were not on the prohibited item list, and the burden of proving smuggling rested with the Customs Department. The advocate also highlighted the chain of purchase from M/s. Om Sai Enterprises to support the Indian origin of the goods.
3. Customs’ Counterarguments: The Learned AR argued that the interception location (Chhapwa) was inconsistent with the claimed Motihari to Patna route, suggesting that the consignment was actually moving from Raxaul to Motihari. Additionally, no transit invoice challan was found, and the delay in claiming ownership was questioned. The absence of evidence regarding payment methods and missing invoices added weight to their case.
4. Bench Queries: The bench inquired about the missing Invoice No. 55 and the payment details. The advocate couldn’t provide these documents. The AR pointed out the delayed ownership claim and the lack of an Income Tax PAN Number for a substantial transaction.
Conclusion: After considering both sides and examining the evidence, the CESTAT Kolkata found no merit in Madan Kumar’s arguments. They upheld the order passed by the Appellate Authority, resulting in the dismissal of Kumar’s appeal on 24/08/2023. This case serves as a reminder of the importance of providing clear and timely documentation to substantiate the legitimacy of transported goods.
FULL TEXT OF THE CESTAT KOLKATA ORDER
A truck with Registration No. JH-02N-1631 was intercepted on 26.12.12 at 14:00 AM at Chhapwa which is a place between Raxaul & Motihari. It was found that a consignment of 3420 Kgs of Betelnut valued at Rs. 3,42,000/- was being transported. On being intercepted, the Driver fled away and no documentary evidence was produced before the Customs Officials towards the consignment being transported.
2. On 21/01/2013, the present Appellant Shri Madan Kumar submitted an application claiming the ownership of the consignment and sought provisional release of the Betel Nuts. He claimed that he was transporting the betel nuts from Motihari to Patna for sale. On the way, it was seized by the Customs officials. He submitted that the Betel Nuts were purchased from M/s. Om Sai Enterprises vide Bill No. 55 dated 24/12/2012. In turn M/s Om Sai Enterprise had purchased the said goods on 28/09/2012 by participating in the E-Auction conducted by the Customs Division, Motihari. The goods were released provisionally after depositing Rs. 1,50,000/- as Redemption Fine and payment of Customs Duty of Rs. 4,29,032/– by the Appellant. Subsequently, the Show Cause Notice was issued on 10/06/2013 and OIO was passed by the Adjudicating Authority confiscating the goods valued at Rs. 3,42,000/- with an option to redeem the same on payment of Rs. 1,00,000/- as Redemption Fine. He held that appropriate Customs Duty is required to be paid. The Adjudicating Authority also imposed a penalty of Rs. 50,000/- against the present Appellant. Being aggrieved, the Appellant is before the Tribunal.
3. The Learned Advocate submits that the entire case is based on assumptions and presumptions just because the driver fled away and could not show the licit document at the time of interception. This on its own cannot allow the Department come to a conclusion that the goods were being smuggled from Nepal. He submits that the Authorities relied upon some circumstantial evidence, which at best may arouse some doubts but cannot be applied to say that the goods are of foreign origin and hence are liable to be confiscated under Section 111(b) and 111(d) of the Customs Act. He submits that the Betel Nuts were not under the prohibited item list. It is for the Department to prove the smuggled character of the goods. Though the Appellant has clearly stated that they have purchased the Betel Nut on 24/12/2012 from M/s Om Sai Enterprises vide Bill No. 55 dated 24/12/2012, the Adjudicating Authority failed to give due consideration of the same. He further submits that M/s Om Enterprises have in their Recorded Statements clarified that they have participated in the E-Auction conducted by the Customs Division, Motihari and bought the same on 28/09/2012. Therefore, the Appellant has been able to satisfactorily explain that the Betel Nuts in question were bought within India and are of Indian Origin only. Considering these factual details and the evidence produced in by the Appellant, he submits that the Adjudicating Authority is in a gross error in ignoring the same and imposing the Redemption Fine and penalty on the Appellant. Accordingly, he prays that the present Appeal may be allowed.
4. The Learned AR submits that it is an admitted fact that the truck was intercepted at Chhapwa located in between Raxual and Motihari. While the Appellant is claiming that the goods were moving from Motihari to Patna, there is no possibility/necessity for the Truck to go on Northern direction towards Raxaul to reach Patna. Since Chhapwa is not located between Motihari and Patna, the Appellant cannot claim that the goods were being transported from Motihari to Patna. Hence, it can be concluded that the Consignment was moving from Raxaul to Motihari only. Further he submits that though, the Appellant has claimed that the goods were being dispatched from Motihari to Patna, no transit Invoice Challan was found either with the Driver or in the Truck. The Driver, Rajendra Yadav has submiited that the goods were loaded at Raxaul and were to be transported to Patna. He further submits that though the goods were seized on 12/06/2012, the present Appellant took 25 days to claim the ownership of the seized Betel Nut. If they have dispatched the consignment on 25/12/2012 to Patna, he should have been searching for the vehicle and lodged FIR for not findings the vehicle loaded with the goods valued at Rs.3,42,000/-. The Appellant has not taken any of such actions. The AR further points out to the findings of the Adjudicating Authority wherein, it is observed that if the Appellant has procured the goods from vendor who had purchased on E-Auction, as to why it has taken 25 days to claim the ownership of consignment. The Adjudicating Authority has also noted that the Appellant claimed that he is a small businessman engaged in purchase and selling of the said goods having no license for purchase and sale of goods and does not have any Income Tax PAN Number. In such a case, he has failed to prove evidence of payment of Rs. 2,97,675/- plus Vat for a single transaction when financially he is not strong. Therefore, the Adjudicating Authority held that the goods in question were being transported from Raxul (Nepal) and were of foreign origin having no licit documents. Accordingly, the AR submits that the present Appeal is required to be dismissed.
5. On a query from the Bench about the copy of the Invoice No. 55 dated 24/12/2012 which the Appellant claims to be the purchase Invoice, the Learned Advocate submits that the copy is not available. The Bench has also queried as to whether the payment of Rs. 2,97,675/- plus VAT was made through Banking channel or any other Channel. He submits that no such evidence was brought in before the Adjudicating Authority nor the same is the part of the present Appeal. On another query as to the copy of the Sale Invoice by the Appellant while transporting from Motihari to Patna, he pleads that the same was not part of the submissions made before the Adjudicating Authority nor the same is part of the present Appeal. He submits that from the fact that the Appellant was released the goods vide Order dated 28/08/2014 by the Assistant Commissioner, Customs, Motihari, wherein the Appellant was made to deposit Rs. 1,50,000/-Redemption Fine and Customs Duty of Rs. 4,29,032/-, the same shows that the Department has treated the Appellant as a genuine owner of the consignment. He once again submits that the Department has not fulfilled the onus of proving that the goods in question were being smuggled from Raxaul while the Appellant has been able to prove that the goods in question were purchased in India.
6. Heard both sides and perused the documents.
7. There is no dispute that the consignment in question was seized by the officials at Chhapwa. It is not disputed that Chhapwa is located in between Raxaul and Motihari. The Appellant while claiming that the goods have been purchased within India, has not even produced the copy of Invoice No. 55 dated 24/12/2012 before the Adjudicating Authority nor has he enclosed the same along with the Appeal Papers and Synopsis filed today. Since the amount involved under this Invoice is for Rs.3,42,000/-, the Appellant is not in a position to say as to how this payment was made to the vendor. Another unanswered question is what was the serial number of Invoice raised by the Appellant when the goods were being transported from Motihari to Patna. No copy of the sale Invoice has been produced before the Adjudicating Authority nor have they done so before the Tribunal. There is no proper explanation forthcoming as to why the truck has proceeded in the northern direction towards Chhapwa when Patna was located to the south of Motihari. Had the Appellant produced these details before the Adjudicating Authority then they could have claimed that they have provided enough evidence towards legitimacy of the transaction. Having failed to do so, they cannot take the plea that the Department has not discharged their onus. In such cases the onus gets shifted from one party to another. When initially the truck was seized and proceedings were initiated by way of Show Cause Notice, it was for the Appellant to counter the same along with proper documentary evidence. If this was done, it can be taken that the Appellant has shifted onus to the Department, and only in that case, the Department has to counter the same to fortify their initial allegations. As can be seen from the factual matrix, the Appellant has failed to discharge the onus placed on him.
8. In view of the foregoing, we do not see any merits in the arguments adduced by the Appellant and see no need to interfere with the Order passed by the Appellate Authority.
9. Accordingly, we dismiss the Appeal filed by the Appellant. (Pronounced in the open court on 24/08/2023)