2026-VIL-1785-CESTAT-KOL-CU
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CUSTOMS CESTAT Cases

Customs - Absolute confiscation of betel nuts and imposition of penalty for alleged smuggling of goods of foreign origin - Intelligence was received that two consignments of betel nuts smuggled from Myanmar through the Indo-Myanmar border and stored at a godown in Mizoram were to be transported by two trucks through the Siliguri area of West Bengal - The DRI officers intercepted both trucks and seized the betel nuts under Section 110 of the Customs Act, 1962 as liable to confiscation under Sections 111(b) and 111(d) - SCN proposed absolute confiscation of the goods under Sections 111(b) and 111(d) and penalties on the Appellants under Sections 112(a) and 112(b) - The adjudicating authority absolutely confiscated the goods and imposed penalties relying on the statements of the drivers and handymen, the test report and the statements of the consignors, which was upheld by the FAA - Whether betel nuts, being non-notified goods, can be confiscated under Section 111 and penalties imposed under Section 112 of the Customs Act, 1962 on the basis of statements and a test report without proof that the goods are of foreign origin and smuggled - HELD - The sole allegation was that the trucks intercepted far from the border were carrying betel nuts of foreign origin. The invoices showed consignors in Mizoram and consignees in West Bengal, so it cannot be merely said that the betel nuts were seized at the Indo-Myanmar border. The test report does not conclusively say that the betel nuts are of Myanmar origin since it only says that they seem to be of North East including Myanmar region, which does not mean that the goods are of Myanmar origin. Even if the goods are presumed to be of Myanmar origin, betel nuts are not notified under Section 123 of the Customs Act, 1962, therefore the burden of proving that they are smuggled lies on the Revenue. Merely on the basis of a statement, it cannot be concluded that the betel nuts are smuggled. Following the decisions of the Hon'ble High Court at Calcutta, affirmed by the Hon'ble Apex Court, and of the Tribunal and the Hon'ble High Court at Allahabad, no adverse presumption can be drawn against the Appellants for non-notified goods, suspicion however strong cannot substitute proof, and a finding based on presumption without legal or factual basis cannot be sustained. An opinion that is only suggestive and not definitive, and is not based on any scientific test to determine origin, cannot be accepted as cogent material to establish foreign origin - The Revenue failed to discharge the burden of proving that the goods are smuggled, hence the goods cannot be held liable to confiscation on the basis of assumptions and presumptions - The order of confiscation is set aside, no penalty is imposable on the Appellants and the appeals are allowed
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