Allahabad High Court
Commissioner Of Customs, Lucknow vs M/S Maa Kali Traders Thru. Prop. Sushil ... on 23 September, 2019
Bench: Munishwar Nath Bhandari, Alok Mathur
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH ?Court No. - 4 Case :- CUSTOMS APPEAL No. - 2 of 2019 Appellant :- Commissioner Of Customs, Lucknow Respondent :- M/S Maa Kali Traders Thru. Prop. Sushil Kumar Counsel for Appellant :- Dipak Seth Counsel for Respondent :- Arijit Chakrabarti,Yogesh Chandra Srivastava Hon'ble Munishwar Nath Bhandari,J.
Hon'ble Alok Mathur,J.
Heard.
The appeal is admitted on the following questions of law:-
"Whether the Customs Excise & Service Tax Appellate Tribunal, Allahabad is correct in upholding the order dated 16.07.2018 passed by the Commissioner (Appeals) ignoring the findings recorded by the Adjudicating Authority regarding failure of the respondent to prove that the seized Betel Nuts are of Indian Origin and that the consignee of the goods is a non-existent entity having not found on the given address?
"Whether the impugned final order dated 26.11.2018 of the Customs Excise & Service Tax Appellate Tribunal, Allahabad is against the law laid dowqn by the Hon'ble Apex Court in case of Commissioner of Customs Vs. D. Bhoormull reported in 1983 (13) ELT 1546 (SC)?."
We have heard the appeal finally with the consent of the parties.
This custom appeal has been preferred against the judgment dated 26.11.2018 passed by the Customs, Excise & Service Tax Appellate Tribunal, Allahabad in Customs Appeal No. C/71164/2018- CU (DB) (Commissioner of Customs, Lucknow Vs. M/s Maa Kali Traders.
Learned Standing Counsel appearing for the Revenue informs about the judgment of this Court on the same issue. The legal issue involved in the present matter has been addressed by this Court in the case of Commissioner Customs, (Preventive) Kendria Bhawan, Sect-H Vs. Ms. Maa Gauri Traders, Prop. Shyamal Biswas College Para; Custom Appeal No. 3 of 2019 decided on 21.08.2019. In view of the above, this appeal can be governed by the judgment in the case of Commissioner Customs(Preventive), Kendriya Bhawan (supra). For ready reference, certain paragraphs of the judgment referred above are quoted hereunder:-
"3. The appeal has been pressed by the appellant on the following proposed substantial questions of law:-
(1) Whether the learned CESTAT has erred by disbelieving the test report dated 23.03.2017 of the Arecanut Research & Development Foundation, Mangalore - determining the betel nut s are of Indonesian origin, - on the pretext that in a RTI reply the Directorate of Arecanut and Spices Development, Ministry of Agriculture and Farmer Welfare, Government of Kerala - states that - 'it is not possible to determine the place of origin of betel nut through test', while Agriculture Directorate is not equipped to make such tests?
(2) Whether the learned Collector (Appeals) as well as the learned CESTAT both erred by discrediting the Order - In - Original dated 29.03.2018 passed by the Adjudicating Authority, by entertaining new documents as evidence which were not produced earlier during adjudicating proceedings?
4. It has been submitted by the learned counsel of the appellant that on basis of information a truck bearing registration number HR 55/X -1913 was intercepted on 17/02/2017 near Lucknow, which was carrying betel nuts. On enquiry it was found that the driver was carrying Tax Invoice, Delivery Challan, and Transit Declaration Form. The truck was carrying 19585 KG of betel nuts. The statement of the driver was recorded wherein he stated that he had loaded 47 bags of betel nuts from the market of the Dhupguri and 211 bags from Falakanta as per the orders of the truck owner. The betel nuts were shown to two traders of betel nuts of Lucknow, who opined that they appear to be of foreign origin, and thereafter the samples were drawn and were sent to Arecanut Research and Development Foundation, Mangalore (hereinafter referred to as "ARDF") for confirming the origin of the said betel nuts. A report was received by the Department on 20/3/2017 confirming the betel nuts to be of "Indonesian" origin.
5. On the basis of the aforesaid report submitted by the ARDF, Mangalore, the betel nuts were seized on the belief that they had been brought illegally into India in violation of Notification dated 21/11/2019 issued under Section 7 (1)C of the Act and proceedings of confiscation under Section 111 of the Act were initiated and finally the vehicle and the betel nuts were seized under Section 110 of the Customs Act, 1962.
6. The Additional Commissioner Customs (P), Lucknow after giving opportunity to the respondents as provided in the Act, passed the Order-In-Original on 29/03/2018 thereby confiscating the entire lot of betel nuts as well as the vehicle under Sections 111 and 115 respectively of the Customs Act, 1962 and also imposing penalty under Section 112(a)&(b) of the Customs Act, 1962. The aforesaid order was challenged in appeal before the Commissioner (Appeals), Lucknow on the ground that the betel nuts were indigenously purchased from the 'Mandis' and 'Haats' which are local agricultural markets, after paying the levy prescribed and regulated by the Market Committee, and receipt of levy/cess was also produced as a proof of legitimate purchase and sale as well as record of the price of sale.
7. It was further submitted that the Order-In-Original has been passed in ignorance, and without taking into consideration the aforesaid facts. It was also submitted that the report of Arecanut Research and Development Foundation, Mangalore cannot be relied upon as it is not possible to determine the place of origin of betel nuts by means of testing in the laboratory. The Commissioner (Appeal) considering the rival arguments and material placed by the parties, held that as betel nuts are not notified under Section 123 of the Customs Act, the onus is on the Department to prove that the impugned consignment was not properly imported and it is for the Revenue to prove that the betel nuts have been smuggled into the country.
8. Before the Commissioner (Appeals) a certificate issued by Directorate of Arecanut And Spice Development, Ministry of Agriculture and Farmers Welfare, Government of Kerala was produced with stated that it is not possible to determine the place of origin of betel nuts through a laboratory test. The Commissioner (Appeals), therefore, allowed the appeal holding that the origin of betel nuts cannot be determined through the process of a laboratory testing and there is no evidence to show that it was improperly imported into India, and therefore, in absence of any evidence with regard to the fact that the betel nuts were improperly imported, the confiscation order cannot be sustained and thereby set aside the Order-In-Original.
9. By means of the impugned order the CESTAT agreed with the findings recorded by the Appellate Authority. It concurred with the opinion of the Commissioner (Appeals) to the extent that the onus to prove that the betel nuts were smuggled, lay on the Revenue, and the same burden was not discharge by them, in as much as, it was not possible to determine the place of origin of betel nuts, by testing in the laboratory and the report of the ARDF was, at best, an opinion and not conclusive proof with regard to the country of origin. It further held that even in case it is held that the betel nuts were of foreign origin, the same could have been confiscated only when it was proved that they were illegally smuggled into the country, and in absence of any evidence that the betel nuts in question were smuggled, the confiscation and penalty imposed on the respondents was not justified and therefore the appeal of the Revenue was rejected.
10. The learned counsel for the Revenue has canvassed mainly with regard to the fact that the betel nuts having been proved to be of foreign origin, relying on the report of the ADRF, the Tribunal committed manifest error by not relying on the same, and thereby proceeded to dismiss the appeal preferred by the Revenue. He relied upon the judgment of the Collector of Customs Vs D. Bhoormall, 1983(13)ELT 1546 (SC), to show that the revenue is not required to prove its case with mathematical precision, but is only required to establish such a degree of probability that a prudent man may, on that basis, believe of existence of facts in issue, and therefore submitted that the RTI reply is general in nature while the specific report by the Arecanut Research and Development Foundation is that this report is given by specialized agency and therefore should have been relied upon by the authorities below.
11. The only question raised in the present appeal is with regard to the origin of the betel nuts, as to whether they are of foreign origin, or they have been purchased locally as asserted by the respondents before the authorities below. In our considered opinion the issue regarding to origin of the betel nuts, would be purely a question of fact.
12. In the case of Union of India v. Ibrahim Uddin, (2012) 8 SCC 148 the Apex Court has considered as to what would be a "question of fact" as contra-distinguished from a "question of law". In paragraph 65, citing the judgment in the case of Suwalal Chhogalalv.CIT[(1949) 17 ITR 269 (Nag)], the Court has held as under:
"... A fact is a fact irrespective of evidence by which it is proved. The only time a question of law can arise in such a case is when it is alleged that there is no material on which the conclusion can be based or no sufficient material."
13. Further in Sewalal Chhogalal (supra) the Court also held in paragraph 67 and 68 that:-
"67. There is no prohibition to entertain a second appeal even on question of fact provided the Court is satisfied that the findings of the courts below were vitiated by non-consideration of relevant evidence or by showing erroneous approach to the matter and findings recorded in the court below are perverse. [VideJagdish Singhv.Natthu Singh[(1992) 1 SCC 647 : AIR 1992 SC 1604] ,Prativa Deviv.T.V. Krishnan[(1996) 5 SCC 353] ,Satya Guptav.Brijesh Kumar[(1998) 6 SCC 423] ,Ragavendra Kumarv.Firm Prem Machinery & Co.[(2000) 1 SCC 679 : AIR 2000 SC 534] ,Molar Malv.Kay Iron Works (P) Ltd.[(2000) 4 SCC 285 : AIR 2000 SC 1261] ,Bharatha Mathav.R. Vijaya Renganathan[(2010) 11 SCC 483 : (2010) 4 SCC (Civ) 498] andDinesh Kumarv.Yusuf Ali[(2010) 12 SCC 740 : (2010) 4 SCC (Civ) 738] .]
68.InJai Singhv.Shakuntala[(2002) 3 SCC 634 : AIR 2002 SC 1428] this Court held that (SCC p. 638, para 6) it is permissible to interfere even onquestion of factbut it may be only in "very exceptional cases and on extreme perversity that the authority to examine the same in extenso stands permissible--it is a rarity rather than a regularity and thusin fineit can be safely concluded that while there is no prohibition as sucit is being clarifiedh, but the power to scrutiny can only be had in very exceptional circumstances and upon proper circumspection".
14. Similar view has been taken by the Hon'ble Apex Court inKashmir Singhv.Harnam Singh[(2008) 12 SCC 796 : AIR 2008 SC 1749] .
15. Applying the principles enshrined in the aforesaid decisions to the facts of the case at hand, it is apparent that the CESTAT after considering all the material on record including the orders passed by the authorities below, have given a concurrent finding of fact that the Revenue could not establish the foreign origin of the betel nuts . The documents produced by the respondents indicated that the goods in question were purchased from local markets, and in support of the purchases they produced the market receipts which has not been doubted by the Revenue Authorities themselves at any stage of the proceedings. The report of the ARDF has also been held to be not reliable in as much as it could not be shown with any degree of certainty that the origin of the betel nuts could be established by testing in a laboratory, as is clear by the answer to the RTI query given by Directorate of Arecanut And Spice Development, Ministry of Agriculture and Farmers Welfare, Government of Kerala."
In the light of the paragraphs quoted above, we find that the questions of law raised by the appellant herein has already been answered by this Court in the case of Commissioner Customs(Preventive), Kendriya Bhawan (supra).
In view of the above, we cannot take different view than already expressed by the coordinate bench of this Court. It is otherwise required to maintain judicial discipline.
Accordingly, the appeal preferred by the appellant is dismissed. It is ordered to be governed by the judgment dated 21.08.2019 in the case of Commissioner Customs(Preventive), Kendriya Bhawan (supra).
At this stage, we may clarify that Government of Kerala mentioned in paragraph 15 of the judgment quoted above is actually Government of India. It has been mentioned as Government of Kerala due to the information supplied by the counsel at that time or due to inadvertence.
Order Date :- 23.9.2019 Ashish