2010 (5) TMI 493 - HC - Customs

Confiscation and Penalty - Smuggling Proof Confessional statements in terms of Section 108 of Customs Act, 1962 is substantive evidence, and can be relied upon to pass orders of confiscation and penalty under the provision of the Act Smuggling of Gold Statement made under section 107 and 108 of Customs Act, 1962 whether genuine and bona fide confessional statement - The same is substantive evidence and can be used against the person & two respondents herein Penalty - Smuggling of Gold- Notices issued to respondents for recording of statements but not availed- Burden of proof on respondents to prove that gold bars are not smuggled section 123 In such a situation, the rigorous procedure prescribed by section 103 of the Act is completely obviated Appelate Tribunal s order Perfunctory orders - Tribunal allowed appeals of respondents here while failing to notice relevant provisions, namely sections 103, 107, 108,& 123 of the Customs Act, 1962& leading judgment of Supreme Court - Vital matters dealing with smuggling cannot be disposed of by perfunctory manner and short order aas Tribunal ventured to do Strictures against CESTAT, Kolkata - Perfunctory manner of exercise of quasi - judicial function by tribunal - CESTAT, Kolkata has been regularly handing down such short, cryptic & perfunctory orders which amount to abdication of judicial duties and functions.

Summary

Issues:
1. Validity of setting aside the order of adjudication and confiscation of gold bars.
2. Interpretation of Sections 107 and 108 of the Customs Act, 1962.
3. Consideration of confessional statements made by the carrier and respondents.
4. Burden of proof under Section 123 of the Act.
5. Application of Section 103 regarding X-ray procedure.
6. Judicial review of the Tribunal's decision.

Analysis:

1. The judgment concerns the validity of setting aside the order of adjudication and confiscation of gold bars of foreign origin recovered from a carrier. The appeals arose from a common order passed by the Customs Tribunal, East Zonal Branch, Kolkata, allowing the respondents' appeals and setting aside the confiscation order.

2. The interpretation of Sections 107 and 108 of the Customs Act was crucial. The confessional statements made by the carrier, recorded under these sections, were considered substantive evidence implicating both the carrier and the respondents. The Supreme Court's authoritative pronouncements emphasized the importance of such confessions in cases of smuggling.

3. The confessional statements made by the carrier were found to be genuine and free from undue influence. The carrier confessed to smuggling gold bars for the respondents, who were jewellers. The carrier's statements, supported by panchnama and seizure memo, were deemed substantive evidence against all involved parties.

4. The burden of proof under Section 123 of the Act was highlighted. It was noted that the respondents failed to prove that the gold bars were not smuggled goods, shifting the burden onto them. The failure of the respondents to avail themselves of the opportunity to present their defense further supported the confiscation order.

5. The application of Section 103 regarding the X-ray procedure was discussed. While a previous judgment had dismissed an appeal due to the need for X-ray evidence, in this case, the reliable confessional statements obviated the necessity for such rigorous procedures.

6. The judicial review of the Tribunal's decision emphasized the importance of thorough consideration of relevant provisions and leading judgments. The High Court criticized the Tribunal for a perfunctory approach in allowing the appeals, highlighting the need for a more detailed and informed decision-making process.

In conclusion, the High Court allowed the appeals, setting aside the Tribunal's order and restoring the decision of the appellate authority based on the comprehensive analysis of the confessional statements, burden of proof, and procedural requirements under the Customs Act.