The burden of proof for non-notified goods under the Customs Act lies with the Customs Department to establish smuggling, which must be supported by cogent evidence.

JUDGMENT :

Mridul Kumar Kalita, J.

1. Heard Mr. Johny L. Tochhawng, learned counsel for the appellant and Mr. B. Lalramenga, learned counsel for the respondent.

2. This Customs Reference has been registered on filing of an appeal under Section 130 of the Customs Act, 1962 by the Commissioner, Customs (Preventive), NER, Shillong, impugning the Order dated 06.07.2022, passed by the Customs Excise & Service Tax Appellate Tribunal (CESTAT), Eastern Zone, Kolkata, in Custom Appeal No. 75949/2021.

3. By order dated 19.03.2024, this Court, upon hearing the learned counsel for both the parties, had formulated the following substantial questions of law:-

i. Whether the CESTAT erred in holding that the evidence collected by the Department could not establish the origin of the dry Areca nuts seized from the respondent.

ii. Notwithstanding that in view of the fact that Betel/Areca Nut is not a notified item under the provisions of Section 123 of the Customs Act, the Department had duly discharged it’s burden to prove that the seized goods have been smuggled into the Country by the respondent.

iii. Whether the learned CESTAT erred in law by accepting the GST documents submitted by the appellant in support of the goods belatedly which was only made during the adjudication proceedings and were not subjected to propose scrutiny by the Department.

iv. Whether the Order dated 06.07.2022 is otherwise perverse in law and therefore is required to be set aside.

4. The facts relevant for consideration of the instant appeal, in brief, are as follows:

i. That on 17.03.2020, the 46 Assam Rifles personnel, intercepted two trucks bearing Registration No. AS 11 DC 1411 and AS 11 AC 6857, respectively, carrying total 310 bags (18600 Kg) of dry betal nuts at Kawlbem, Mizoram and handed over the same to the Customs Preventive Force (CPF), Champai, Mizoram.

ii. The drivers of both the seized trucks, namely, Saroj Uddin Laskar and Karim Uddin Laskar failed to produce any documents at the time of seizure of the vehicles. In their statements, which were recorded by the customs authority, they had stated, inter-alia, that they were carrying betal nuts from Kawlbem to Aizawl.

iii. The seized betal nuts were suspected to be of foreign origin and its value is estimated to be Rs. 52,23,066/-and were believed to be brought into India from Mayanmar through porous Indo-Mayanmar Border in violation of the provisions of the Customs Act, 1962. Thereafter, the custom officials had formally seized the 310 bags (18600 Kg) betal nuts as well as the vehicles on 18.03.2020.

iv. On 19.03.2020, the respondent Eanam Ahmed Laskar claimed the ownership of the seized 310 bags (18600 Kg) betal nuts and submitted an application for provisional release of the seized betal nuts. He also made a statement under Section 107 of the Customs Act, 1962.

v. By order dated 13.09.2021, passed by the learned Adjudicating Authority, i.e., the Commissioner of Customs, North Eastern Region, Shillong, the seized betal nuts were confiscated under Section 111 (b) & (d) of the Customs Act, 1962 with an option to redeem the same in terms of Section 125 (1) of the said Act. Penalty was also imposed on the respondent under Section 112 (b) of the Customs Act, 1962.

vi. Being aggrieved, by the order of the Adjudicating Authority, the respondent had filed an appeal before the Customs Excise & Service Tax Appellate Tribunal (CESTAT), Eastern Zone, Kolkata against the order of confiscation. The said appeal was registered as Custom Appeal No. 75949/2021.

vii. By order dated 06.07.2022, passed in Custom Appeal No. 75949/2021 the CESTAT had set aside the order dated 13.09.2021, passed by the learned Adjudicating Authority. The said order of the CESTAT has been impugned in the instant appeal by the appellant.

5. For the sake of convenience, the relevant portion of the impugned order is quoted herein below:

“4. The issue for consideration in the instant case is whether the revenue has established the allegation that the seized betel n