Point of Law: Section 123 of Act, 1962 provides that where any goods included under Sub-section 2 of Section 123 are seized on basis of reasonable belief that same are smuggled goods, then burden of proving that they are not smuggled goods, shall lie upon person from whose possession such goods have been seized.

JUDGMENT :

ARUN DEV CHOUDHURY, J.

1. Heard Mr. S.C. Keyal, learned Senior standing counsel for the appellants. Also heard Mr. N. Dasgupta, learned counsel for the respondent.

2. The present appeals under Section 130 of the Customs Act, 1962 are preferred assailing Final Order No. 75680-75682/2021 dated 10.11.2021 passed by the learned CESTAT, Kolkata in Custom Appeal No. 75235/2021 (Cus. Ref No. 1/2022), Custom Appeal No. 75234/2021 (Cus. Ref. No. 2/2022) and Custom Appeal No. 75236/2021 (Cus. Ref. No. 3/2022).

3. This batch of appeals were taken up for final determination together as the initial cause of action arose on similar factual background, the show cause notices issued to the parties/respondents are common and also the orders under challenge. All the Appeals were admitted by this court the under its order dated 16.02.2023 framing the following substantial questions of law:

“(i) Whether the CESTAT, Kolkata, erred in law in holding that the standard of proof as envisaged under Section 123 of the Customs Act, 1962 is the best beyond reasonable doubt?

(ii) Whether the CESTAT, Kolkata, has erred in law in setting aside the order of confiscation when seized goods were found to be unfit for human consumption as per test report of Export Inspection Agency, Kolkata, under Food and Standard (Food Products Standards and Food Additive) Regulations, 2022?

(iii) Whether findings of the CESTAT, Kolkata are perverse under the present facts and circumstances of the case?”

4. The basic facts leading to filing of the present appeals as pleaded by the appellant are summarized as follows:

(i) On the basis of intelligence input, the DRI Officers of Silchar searched a godown, however nothing was found. While returning back, they intercepted seven trucks loaded with betel nuts suspected to be of foreign origin. Out of these seven trucks, two trucks were detained near Bairabi Railway Crossing area, three trucks were detained at Ramnathpur hill top and other two trucks were detained at Ramnathpur area.

(ii) These trucks were brought to CRPF Camp, Dharamura and preliminary interrogations were made and all the occupants admitted that they had loaded the betel nuts in their trucks.

(iii) Another search was undertaken at one godown located at Bairabi and 196 bags of foreign origin betel nuts were recovered. All these trucks were brought to Silchar in the intervening night of 2nd and 3rd July, 2018 and kept at godown premises of one M/s NRD Enterprise Pvt. Ltd. Ramnagar, Khelma, Silchar.

(iv) The betel nuts were weighed and representative samples were drawn.

(v) None of the drivers/ helpers of the trucks and the caretaker/ owner of the godown could produce any document in support of the legal importation of the recovered betel nuts, believed to be of foreign origin on the reasonable belief that the said betel nuts were illegally imported into India from Myanmar Border in violation of the provisions of Customs Act, 1962.

(vi) The seven trucks were also seized on the reasonable belief that they are liable to confiscation under Section 115(2) of the Act, 1962.

(vii) Show cause notices under Section 124 of the Act, 1962 were issued to the parties for confiscation of goods under Section 111(b) & (d) of the Act, 1962 etc.

(viii) Thereafter, the appellant No. 2 i.e. Additional Commissioner of Customs (preventive), NER, Shillong directed the betel nuts recovered to be confiscated except from truck No. As-01 BC-8785 being found to be conforming with the prescribed standard. Penalties were also imposed under Section 112(b) (i) of the Act, 1962.

(ix) Being aggrieved by the original order dated 18.03.2022 passed by the adjudicating authority i.e. Additional Commissioner of Customs (Preventive) NER, Shillong, respondents filed appeals before the learned Commissioner (Appeals), CGST, Central Excise & Customs, Guwahati.

(x) The appellate authority under its order dated 31.12.2020 dismissed the appeal holding that seized goods were of foreign origin and the confiscation orders are