2003 (4) TMI 449 - AT - Customs

Smuggling - Evidence - Confessional statement - Retraction of - Corroboration - Confiscation and penalty

Summary

Issues:
Validity of Order-in-Original for confiscation of computer parts and penalty imposition.

Analysis:
The appellant challenged the Order-in-Original confiscating computer parts and imposing a penalty of Rs. 10 lakhs. The seizure of 928 computer parts of foreign origin from the appellant's premises led to the issuance of a show cause notice proposing confiscation and penalty. The appellant disowned the goods but admitted receiving them from someone who smuggled them from Nepal. The Commissioner ordered confiscation and imposed a penalty after rejecting the appellant's version, based on the foreign markings on the goods and the appellant's alleged confessional statement about their smuggled nature.

The Tribunal found flaws in the Commissioner's decision. It noted that the goods were seized from premises where the appellant was not the sole owner, raising doubts about sole possession. The Tribunal criticized the lack of investigation into ownership or possession of the premises and the hasty treatment of the other person present during the raid. Additionally, the goods were not prohibited, and the foreign markings alone did not prove smuggling. The burden of proving smuggling was on the Department, which it failed to discharge.

Regarding the appellant's confessional statement, the Tribunal emphasized the lack of corroborative evidence and the appellant's retraction of the statement due to alleged duress. The Department's failure to catch the alleged smuggler, Hasim, and the appellant's limited knowledge about the goods' origin undermined the credibility of the confession. The Tribunal concluded that the Department failed to prove the goods' smuggled nature, especially since the goods were freely available in the market.

In light of these findings, the Tribunal set aside the Commissioner's order, stating that it could not be legally sustained. The appellant's appeal was accepted, and any consequential relief was granted as permissible under the law.