2004 (8) TMI 551 - AT - Customs

Summary

Issues:
Appeal against Order-in-appeal confirming confiscation of goods and reducing penalty. Allegations of smuggling goods from Nepal based on confessional statement. Retraction of confessional statement by the appellant. Lack of evidence to prove foreign origin of seized goods.

Analysis:

Issue 1: Confiscation of Goods and Penalty Reduction
The appeal was filed against the Order-in-appeal confirming the confiscation of silver bullion and jewellery, while reducing the penalty imposed by the adjudicating authority. The Commissioner (Appeals) confirmed the confiscation but reduced the penalty from Rs. 50,000 to Rs. 20,000. The appellant contested the evidence of foreign origin of the seized goods and the smuggling allegations.

Issue 2: Confessional Statement and Retraction
The appellant retracted the confessional statement immediately upon production before the Magistrate and later before the adjudicating authority. The department relied on the confessional statement to prove the smuggling allegations, while the appellant argued that the retraction should invalidate its use as evidence. The appellant's retraction was based on coercion and threat, raising doubts about the voluntary nature of the confession.

Issue 3: Lack of Corroboration and Evidence
The confessional statement was the primary evidence used by the department, but there was no corroboration from other sources. The appellant, a jeweler, had no foreign-origin goods in his shop, and the seized items did not bear foreign marks. The purity of the silver bullion and jewellery did not meet international standards. The lack of evidence linking the goods to smuggling activities cast doubt on the allegations.

Issue 4: Legal Precedents and Case Analysis
Legal precedents were cited by both parties to support their arguments. The Tribunal highlighted cases where retracted statements without corroboration were insufficient to prove smuggling allegations, especially without foreign markings on the goods. The relevance of voluntary confessions for conviction was discussed in light of the specific circumstances of the case.

Conclusion:
After thorough analysis, the Tribunal found that the confessional statement lacked credibility and corroboration. The absence of foreign markings, the purity of the seized goods, and the lack of evidence connecting the appellant to smuggling activities led to the decision to set aside the impugned order-in-appeal. The appeal was allowed, granting relief to the appellant as permissible under the law.