Onus is On The Customs Department To Prove That The Goods are Smuggled: CESTAT

The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the onus is on the Customs Department to lead evidence in support of an allegation as to the smuggled nature of goods.

The bench of Anil Choudhary (a judicial member) has directed the department to release the goods within a period of 15 days. The appellant shall not be liable for payment of godown rent, detention charges, or demurrage.

The appellant/assessee are traders engaged in the trading of electronic goods, including mobile phones. He purchases the goods from the local market in India for trading. The Customs Department had seized mobile handsets of Chinese origin, and valuation was done on an MRP basis as per the stickers found affixed to the packages of the handsets. After allowing abatement on the MRP of 35%, the duty was calculated, including cess.

According to the department, the seized mobile handsets of foreign origin were unclaimed, and no claimant has appeared to claim ownership. The invoices, etc., submitted by the truck driver and transport company in respect of the mobile handsets appeared to be bogus or fake. In spite of the information given to the consignee, he did not turn up to claim the goods. As the appellant did not turn up to claim the goods, under the facts, the mobile phones appear to be of a smuggled nature and liable to confiscation under Section 111. It further appeared to the Customs Department that the owner of the mobile handsets was the appellant in view of the no objection certificate issued by the transporter in his favor.

The appellant contested the show cause notice by claiming ownership of the mobile handsets of Chinese origin, stating that they were purchased in cash from the open market in Delhi. The claim was duly supported by a "No Objection Certificate" issued by Sri VGFC (the transporter).

The appellant contended that the Customs Department had not brought any evidence to record in support of their allegation of the smuggled nature of the goods. The whole order of confiscation and penalty was bad as it was based on presumption and assumption without any corroborative evidence.

The CESTAT, while setting aside the order, held that no evidence had been brought on record by the department in support of its allegation.

Case Title: Dharmesh B. Bhavsar Versus Principal Commissioner, Customs

Citation: Customs Appeal No. 51095 of 2020-SM

Date: 17.01.2023

Counsel For Appellant: N. K. Tiwari

Counsel For Respondent: Ishwar Charan

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