1994 (11) TMI 363 - AT - Customs

Smuggling - Penalty - Possession at time of seizure - Statement - Confession - Statement - Co-accused - Remand - Scope - Smuggling - Proof beyond reasonable doubt

Issues Involved:
1. Legality of the search and seizure.
2. Validity of the confessional statements.
3. Possession and ownership of the contraband gold.
4. Procedural lapses in the issuance of show cause notices.
5. Imposition of penalties under the Customs Act, 1962 and Gold (Control) Act, 1968.

Detailed Analysis:

1. Legality of the Search and Seizure:
The Department's case was built on the search conducted at the appellant's residence on 3-9-1973, where 41 pieces of primary gold bars of foreign origin and 8 pieces of gold (Bithur) were allegedly recovered. The appellant contested the legality of the search, asserting that he was not present during the search as he was undergoing medical treatment. The Panchnama/recovery memo did not mention the appellant's presence during the recovery, nor did it specify that the key to the almirah or the tools for opening the pully were provided by the appellant. The failure to seize the key made the Department's case doubtful. The Panch witnesses were not from the locality, and there was no endorsement that the Panchnama was read and explained to them. The Department's claim that the appellant fled during the search was not substantiated by any evidence or documentation.

2. Validity of the Confessional Statements:
The appellant's confessional statement was contested on the grounds that it was not voluntary and was obtained under duress. The appellant was allegedly beaten and harassed, as evidenced by a medical certificate showing injuries caused by blunt objects. The statement was retracted at the earliest opportunity, and the appellant lodged complaints with various authorities. The confessional statements of the co-noticees, S/Shri Ram Niwas Sharma and Shree Ram Agarwal, were also retracted and lacked corroboration. The Tribunal held that the confessional statements, being retracted and uncorroborated, could not be relied upon to establish guilt.

3. Possession and Ownership of the Contraband Gold:
The Department failed to prove that the appellant possessed or owned the contraband gold. The statements of the co-noticees indicated that they brought the gold to the appellant's residence, but there was no evidence that the appellant accepted or was aware of the gold's smuggled nature. The appellant's defense that he was not present during the search and seizure was corroborated by medical records and statements from the doctor. The Tribunal found that the appellant was not concerned with the smuggling of the gold and did not perform any act that rendered the gold liable to confiscation.

4. Procedural Lapses in the Issuance of Show Cause Notices:
The initial show cause notice charged the appellant under Clause (a) of Section 112 of the Customs Act. After remand, a fresh show cause notice was issued, incorporating a charge under Clause (b) of Section 112, which was not permissible. The Tribunal held that the adjudicating authority could not go beyond the terms of the remand directions and cited relevant case law to support this view.

5. Imposition of Penalties under the Customs Act, 1962 and Gold (Control) Act, 1968:
The penalties imposed on the appellant under the Customs Act and the Gold (Control) Act were set aside. The Tribunal found that the Department failed to prove that the appellant smuggled, owned, or possessed the contraband gold. The confessional statements, being the sole basis for the penalties, were deemed unreliable. The Tribunal emphasized that guilt must be established beyond reasonable doubt through legal, reliable, and unimpeachable evidence.

Conclusion:
The Tribunal set aside the impugned Order imposing personal penalties on the appellant under both the Customs Act, 1962 and the Gold (Control) Act, 1968, and allowed the appeals. The Department failed to prove the appellant's involvement in smuggling or possession of the contraband gold, and procedural lapses further weakened the case against the appellant.

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