2006 (5) TMI 409 - AT - Customs

Issues Involved:
1. Legality of the seizure of gold bars and ornaments.
2. Validity of the confessional statement of Shri Chinnakaruppan.
3. Correlation between the seized gold bars and the invoices.
4. Role of Shri Balasubramanian and the authenticity of his baggage receipt.
5. Admissibility and reliability of evidence and retractions.
6. Quantum of penalty imposed on Shri Chinnakaruppan and Shri Balasubramanian.

Detailed Analysis:

1. Legality of the Seizure of Gold Bars and Ornaments:
The Customs officers intercepted a car and seized 16 gold bars and 16 gold ornaments from Shri Chinnakaruppan after he failed to produce proof of payment of Customs duty or other evidence of the licit nature of the goods. The seizure was conducted under Sections 11 and 77 of the Customs Act, read with Section 3(2) of the Foreign Trade (Development & Regulation) Act, 1992, and Rule 9 of the Baggage Rules, 1994. The gold was found to be of high purity, and the seizure was documented in a mahazar.

2. Validity of the Confessional Statement of Shri Chinnakaruppan:
Shri Chinnakaruppan admitted to bringing the gold bars and ornaments without declaring them to Customs and without paying the required duty. However, he later retracted this statement, claiming it was obtained under duress. The Tribunal found no evidence of coercion or prolonged custody that would invalidate the statement. The retraction was deemed an afterthought and was not accepted as genuine.

3. Correlation Between the Seized Gold Bars and the Invoices:
The Department's case was supported by Invoice No. 2063, dated 23-7-1996, from M/s. ALNAVAS STORE, Singapore, which evidenced the purchase of 42 gold bars by Shri Chinnakaruppan. This invoice, along with his confessional statement, established a clear link between the seized gold bars and the purchase in Singapore. The Tribunal rejected the argument that the invoice was obtained solely for obtaining a re-entry visa, as no legal requirement for such a document was demonstrated.

4. Role of Shri Balasubramanian and the Authenticity of His Baggage Receipt:
Shri Balasubramanian claimed to have imported 42 gold bars and handed over 16 of them to Shri Chinnakaruppan. However, no documentary evidence or eyewitness testimony supported this claim. The baggage receipt was not produced in original during adjudication, and the Tribunal found no correlation between the seized gold bars and the receipt. The Tribunal upheld the Department's correlation between the seized gold bars and the invoice from Singapore.

5. Admissibility and Reliability of Evidence and Retractions:
The statements given by S/Shri R. Sekar and Muthu on 1-8-1996 corroborated Shri Chinnakaruppan's confession. Their retractions during cross-examination were not accepted due to the lack of explanation for the delay and absence of claims of coercion. The Tribunal found the mahazar proceedings to be regular and supported by the oral evidence of the Customs officers.

6. Quantum of Penalty Imposed on Shri Chinnakaruppan and Shri Balasubramanian:
The Tribunal found the penalty imposed on Shri Chinnakaruppan to be excessive and reduced it to Rs. One lakh. The confiscation of the seized gold bars was upheld, but with an option for redemption. The Commissioner of Customs was directed to give Shri Chinnakaruppan an opportunity to be heard regarding the quantification of the redemption fine and duty. The penalty on Shri Balasubramanian was deemed reasonable, given his role in abetting the offense.

Conclusion:
The Tribunal upheld the confiscation of the gold bars and ornaments, with an option for redemption, and reduced the penalty on Shri Chinnakaruppan. Shri Balasubramanian's claim to the gold bars was rejected, and the penalty imposed on him was affirmed. The decision emphasized the importance of documentary evidence and the reliability of confessional statements in Customs cases.

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