1999 (12) TMI 824 - AT - Customs

Smuggling - Evidence - Burden of proof - Statement - Confessional statement - Smuggling - Expert opinion

Issues Involved:
1. Seizure and ownership of copper scrap.
2. Determination of the origin of the copper scrap.
3. Admissibility and retraction of statements.
4. Burden of proof regarding the smuggled nature of goods.
5. Validity of the evidence provided by the appellants.

Issue-wise Detailed Analysis:

1. Seizure and Ownership of Copper Scrap:
The case revolves around the seizure of 22,966 kgs of copper scrap valued at Rs. 34,44,900/- by Customs Officers at the Old Delhi Railway Station. The scrap was booked from Raxaul under different parcel way bills in the names of various persons. Four appellants claimed ownership of 7,216 kgs of the scrap. However, in their statements dated 22-3-1993, all four appellants denied any connection with the seized goods and mentioned that they were offered money to get the goods released, implying the goods were smuggled from Nepal.

2. Determination of the Origin of the Copper Scrap:
The Commissioner of Customs confiscated the copper scrap under Section 111(d) of the Customs Act, assuming it was smuggled from Nepal. The appellants argued that the goods were not of foreign origin and that the expert opinion relied upon by the Department was flawed. The expert, Jai Prakash Gupta, lacked technical qualifications and his opinion was based on his experience as an office bearer of an association rather than scientific analysis. The Tribunal in previous cases, such as Amar Dutta v. Collector of Customs, held that visual examination alone is insufficient to determine the origin of goods.

3. Admissibility and Retraction of Statements:
The Commissioner relied heavily on the appellants' statements, which were retracted the next day. The appellants claimed the statements were coerced. The Tribunal noted that retracted statements, without corroboration, cannot be the sole basis for confiscation and penalties. The Bombay High Court in State of Maharashtra v. Syed Mohamed Hasim Ali Musavi emphasized that retracted confessional statements require independent and full corroboration.

4. Burden of Proof Regarding the Smuggled Nature of Goods:
The learned Advocate for the appellants argued that the burden of proof lies with the Department to establish that the goods were smuggled. The Commissioner incorrectly assumed that it was sufficient for the Department to allege the goods appeared smuggled, shifting the burden to the appellants to prove lawful possession. The Tribunal cited the case of Bon-Ton Sight Care v. Collector of Customs, which clarified that the burden of proof remains with the Customs authorities for goods not notified under Section 123 of the Customs Act.

5. Validity of the Evidence Provided by the Appellants:
The appellants submitted purchase bills and statements from sellers to show licit acquisition of the goods. The Department's second enquiry report, which contradicted the first, was deemed unreliable as it recorded statements from unrelated persons. The Tribunal found that the Department failed to prove the goods were of foreign origin or smuggled, and thus the confiscation under Section 111(d) could not be upheld.

Conclusion:
The Tribunal concluded that the Department did not provide sufficient evidence to prove the copper scrap was smuggled. The reliance on retracted statements without corroboration was insufficient. Consequently, the confiscation of 7,216 kgs of copper scrap and the penalties imposed on the appellants were set aside, and all four appeals were allowed.

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