Back
2019 Supreme(Megh) 187
IN THE HIGH COURT OF MEGHALAYA AT SHILLONG
AJAY KUMAR MITTAL, H.S. THANGKHIEW, JJ.
Samir Saha - Appellant
Versus
The Commissioner Customs (Preventive), Shillong - Respondent
Cus. Appl. No. 1 of 2017
Decided On : 08-07-2019
For the Appellant : N. Dasgupta, Adv.
For the Respondents: N. Mozika, Sr. Adv. and S.A. Shallam, Adv.
The burden of proof lies on the Revenue to establish that seized currency is from sale proceeds of smuggled goods, and the appellant's evidence can shift the burden.
Headnote:
Customs Act - Seizure of Currency - Sections 121, 123 - The court examined the applicability of Section 121 and 123 of the Customs Act, 1962 in a case involving the seizure of Indian and Bangladesh currency. It held that the burden of proof lies on the Revenue to establish that the seized currency was a result of sale proceeds of smuggled goods. The appellant demonstrated that a portion of the seized amount was for loan repayment, and the Revenue failed to provide evidence to support their claim. The court ruled in favor of the appellant, concluding that the confiscation of the Indian currency was unjustified.
Fact of the Case:
The appellant's shop was searched, and Indian and Bangladesh currency were seized. The authorities ordered confiscation and imposed penalties, which were upheld by the Commissioner (Appeals) and CESTAT. The appellant contested the seizure, claiming the Indian currency was for loan repayment.
Finding of the Court:
The court found that the Revenue failed to prove that the seized Indian currency was from sale proceeds of smuggled goods. The appellant's evidence of loan repayment was accepted, and the confiscation and penalty were deemed unjustified.
Issues: The issues involved the confiscation of seized currency under Sections 121 and 123 of the Customs Act, 1962, and the burden of proof on the Revenue to establish the currency's illicit origin.
Ratio Decidendi: The court held that the burden of proof lies on the Revenue to establish that seized currency is from sale proceeds of smuggled goods. The appellant's evidence of loan repayment shifted the burden, and the Revenue failed to provide sufficient evidence to justify confiscation.
Final Decision: The court ruled in favor of the appellant, concluding that the confiscation of the Indian currency was unjustified.
JUDGMENT :
Ajay Kumar Mittal, J.
1. This is an appeal filed under Section 130 of the Customs Act, 1962 (in short 'the Act') read with Rule 29 of the CESTAT Procedure Rules, 1982, challenging the order dated 28.04.2017 passed by the Customs, Excise & Service Tax Appellate Tribunal (in short "CESTAT"), Kolkata in Appeal No. C/76318/2016-SM affirming the order of the Commissioner, Customs & Central Excise (Appeals), Guwahati [hereinafter referred as "Commissioner (Appeals)] dated 31.05.2016 whereby, the Order-in-Original passed by the Additional Commissioner of Customs (Preventive), Ministry of Finance, Department of Revenue, Office of the Commissioner of Customs (Preventive), North East Region, Shillong dated 17.12.2015 had been upheld.
2. Briefly, the facts as narrated in the appeal may be noticed. The appellant is the owner of a small shop located in close proximity to Srimantapur Land Customs Station, Sonamura, Tripura, which is located on Indo-Bangladesh border. On 27.09.2014, Customs Officers, Sonamura LCS along with BSF carried out a search operation in the shop of the appellant and seized Indian currency amounting to Rs.8,23,100/- and also Bangladesh Taka 3,32,335/- valued at Rs.2,32,635/-. According to the appellant, the Bangladesh Taka belonged to his cousin who is a Bangladeshi national and was on visit to India and staying in the house of the appellant during September 2014. The seizure was contested by the appellant before the Adjudicating Authority. The Additional Commissioner of Customs (Preventive) vide order dated 17.12.2015 passed under Sections 111(b), (d) and 121 of the Act read with Section 13 of FEMA, 1999 ordered confiscation and imposed penalty under Section 112(b)(i) of the Act. Accordingly, the Additional Commissioner of Customs (Preventive) ordered absolute confiscation of Bangladesh Currency Taka 3,32,335/- valued at Rs.2,32,635/- under Section 111(b) and (d) of the Act. Besides, confiscation of Indian Currency amounting to Rs.8,23,100/- was also seized under Section 121 of the Act, penalty of Rs.50,000/- was imposed on the appellant and Rs.25,000/- on the father-in-law of the appellant under Section 112(b)(i) of the Act.
3. Being aggrieved, the appellant filed an appeal before the Commissioner (Appeals) which was rejected vide order dated 31.05.2016 (Annexure-H). Further the Tribunal upheld the Order-in-Original and the order of Commissioner (Appeals) dismissing the appeal of the appellant on 28.04.2017 (Annexure-J).
4. The appellant claimed that the appeal raised the following substantial questions of law:
(i) Whether on the facts and in the circumstances of the case, learned Tribunal has committed substantial error of law, while approving the Order of confiscation of Indian currency Rs.8,23,100/- under Section 121 of the Customs Act, 1962, passed by the Additional Commissioner of Customs (Preventive) N.E.R., Shillong without any cogent evidence against the appellant. Said Indian currency was seized on a reasonable belief of same being the sale proceeds of smuggled goods. However, no evidence adduced to show that the seized sum related to any Sale Proceeds of smuggled goods and the appellant was having knowledge of the same. Moreover, it is evident from record that the Section 123 of the Customs Act, 1962, was not invoked; therefore burden to prove allegation squarely lies on the department, which has not been discharged.
(ii) Whether confiscation of Bangladesh taka 3,32,335/- is sustainable under Section 111(b) and (d) of the Customs Act, 1962, when same was permitted to be imported in valid entry into India from a foreign country (Bangladesh) without declaration to the customs or any other authority. In terms of the Reserve Bank Exchange Control Notification No. F.E.R.A. 81/89-RB dated 09.08.1989, as amended, read with Notification No. F1/107/EC 73 : dated 01.01.1974, issued by Government of India, Ministry of Finance made it mandatory for declaration above US Dollar 10,000.00 or equivalent value only. Mo
