High Court jurisdiction under Section 130 of the Customs Act subsists despite its omission by the National Tax Tribunal Act.

The appellant, proprietor of M/S Sunil Traders, claimed he dispatched 1500 kg of cut betel nuts via an Indian pick-up vehicle from Motihari to Sonbarsa on 10.04.2015.

He alleged the vehicle broke down, and while unloading goods, the Sashastra Seema Bal (SSB) seized them.

Conversely, the department recorded that SSB intercepted a Nepal-registered vehicle near the border carrying the goods; the driver and owner stated the cargo originated from Birganj, Nepal.

The Assistant Commissioner ordered absolute confiscation, imposing redemption fines and penalties.

This was affirmed by the Commissioner (Appeals) and the CESTAT, Kolkata.

The appellant challenged these orders, alleging the non-supply of material documents and failure to consider the domestic commercial nature of the transaction.

1. Whether the right to appeal before the High Court under Section 130 of the Customs Act, 1962, continues to exist following its omission by the National Tax Tribunal Act, 2005?

2. Whether the authorities were justified in concluding the goods were of foreign origin and liable for confiscation?

3. Whether the adjudication proceedings were vitiated by violation of the principles of natural justice due to non-supply or non-consideration of material documents?

The Court applied Section 130 of the Customs Act, 1962, regarding the High Court's appellate jurisdiction.

It considered Section 30 of the National Tax Tribunal Act, 2005, and the principle that if a substitute forum (the NTT) never became operational, the statutory right of appeal cannot be extinguished.

Regarding adjudication, the Court applied Section 108 (statements) and Section 110 (seizure) of the Customs Act, along with the constitutional principle of Natural Justice, which requires that every relevant circumstance supporting or weakening a version must be objectively considered and relied-upon documents must be disclosed.

The Court first resolved the jurisdictional question, holding that since the National Tax Tribunal never functioned, the High Court’s jurisdiction under Section 130 remains intact to prevent leaving litigants without a remedy.

On merits, the Court found the lower authorities relied disproportionately on the Nepal registration of the vehicle while ignoring the appellant’s Invoice No. 10 and the consignee's corroborative statement.

The Court reasoned that "suspicion, however grave, cannot take the place of proof" regarding the foreign origin of goods.

It noted material inconsistencies, such as the Panchnama listing the goods as "unclaimed" while the department simultaneously alleged a specific Nepalese origin.

Critically, the Court observed that the adjudicating authority failed to test the appellant's "breakdown theory" against investigator evidence and failed to supply documents obtained by the appellant only later via official correspondence.

Such selective appreciation of evidence was held to be a failure of the quasi-judicial process.

It held that the finding of foreign origin was not based on a reasoned appreciation of the entire record and that the proceedings suffered from procedural infirmity.

The Court set aside the orders of the CESTAT, the Commissioner (Appeals), and the Assistant Commissioner. The matter was remanded to the Assistant Commissioner for fresh adjudication with directions to furnish all relied-upon documents and provide a meaningful opportunity for the appellant to present his defense. The appeal was allowed to this extent.