2011 (12) TMI 501 - AT - Customs

Summary

Issues Involved:
1. Legality of seizure of silver bullion, silver ornaments, and Indian currency.
2. Validity of the appellant's confessional statements.
3. Burden of proof under Section 123 of the Customs Act, 1962.
4. Justification for confiscation of seized items and imposition of penalty.

Issue-wise Detailed Analysis:

1. Legality of Seizure of Silver Bullion, Silver Ornaments, and Indian Currency:
The appellant was intercepted by Customs officers on 28-1-2000, and upon searching his car, silver slabs, silver jewelry, and Indian currency were found hidden in cavities. The appellant could not produce legal documents for the silver and jewelry, leading to their seizure under the belief that they were smuggled. The seizure was made under Section 123 of the Customs Act, which places the burden of proving non-smuggled origin on the person from whom the goods were seized.

2. Validity of the Appellant's Confessional Statements:
The appellant's initial confessional statement on 28-1-2000 admitted to smuggling silver from Nepal and reducing its purity to conceal its origin. However, this statement was retracted on 30-1-2000, with the appellant alleging illegal detention and duress. The High Court noted that the appellant's statement about staying at a particular Dharamshala and selling silver to certain dealers was found to be false. The Tribunal found that the appellant was in Customs custody from 28-1-2000 to 29-1-2000, supporting his claim of illegal detention and coercion, making the confessional statement unreliable.

3. Burden of Proof Under Section 123 of the Customs Act, 1962:
Section 123 shifts the burden of proof to the appellant to show that the seized silver was not smuggled. The High Court emphasized that the Tribunal should have considered this burden strictly per Section 123. The appellant provided evidence, including an affidavit and statements from M/s. Swastik Metal, supporting his claim that the silver was legally acquired and taken for refining. The Tribunal found that the Department did not conduct a thorough inquiry to disprove the appellant's claims.

4. Justification for Confiscation of Seized Items and Imposition of Penalty:
The Additional Commissioner ordered absolute confiscation of the silver, ornaments, and currency, and imposed a penalty on the appellant. The Commissioner (Appeals) upheld this, relying on the appellant's confessional statement. However, the Tribunal, upon re-examination, found that the confessional statement was unreliable and that the Department failed to disprove the appellant's evidence of legal acquisition. The Tribunal also noted the lack of foreign markings on the silver and the corroboration of the appellant's claims by M/s. Swastik Metal.

Conclusion:
The Tribunal set aside the confiscation order and penalty, ruling in favor of the appellant. The appeal was allowed, and the impugned order was overturned, emphasizing the need for concrete evidence beyond a retracted confessional statement to justify the seizure and penalties.