2010 (1) TMI 841 - AT - Customs

Seizure of gold bars of foreign origin - Statements rejected as evidence being not voluntary and true As held by the Apex Court in the Pavunny case (1997 - TMI - 44456 - SUPREME COURT OF INDIA), rule of prudence and practice requires that a Court seeks corroboration of the retracted confession from other evidence, passenger who incriminated the respondent did not appear before the authorities. Other major party to the transactions Shri. John Baretto did not also participate in the proceedings. No corroboratory evidence of the respondent s involvement was gathered by the revenue - Held that - No evidence of involvement of the appellant in the offending transactions in the impugned order, Accordingly, appeal filed by appealant allowed, penalty of Rs. 5.00 lakhs was imposed on the appellant without any justification, appeal filed by the Revenue is rejected.

Issues Involved:
1. Whether the statements of co-noticees, who were not cross-examined, can be relied upon as evidence.
2. The validity of the retracted confession statements.
3. The involvement of Shri Santhosh Talpade in smuggling activities.
4. The imposition of penalty on Shri Arif Shaikh.

Issue-wise Detailed Analysis:

1. Whether the statements of co-noticees, who were not cross-examined, can be relied upon as evidence:
The Commissioner of Customs did not find the statements of S/Shri Abdul Sathar and John Baretto reliable as they were not made available for cross-examination by Shri Santhosh Talpade. The Tribunal supported this view, noting that without cross-examination, such statements lack corroborative evidence and cannot be deemed reliable. The Commissioner relied on the decision in Arvind Kumar v. CC, New Delhi, which held that uncorroborated statements implicating an officer do not prove abetment.

2. The validity of the retracted confession statements:
The Tribunal considered the retracted confessions and found that a retracted confession cannot be the sole basis for conviction without corroborative evidence. The respondent, Shri Santhosh Talpade, retracted his confession, claiming it was made under duress and threats. The Tribunal referred to judgments like K.I. Pavunny v. Asst. Collector (HQ) Central Excise and Mohtesham Mohd. Ismail v. Special Director, Enforcement Directorate, which emphasize that retracted confessions require corroboration from independent sources to be considered reliable.

3. The involvement of Shri Santhosh Talpade in smuggling activities:
The Tribunal found that the evidence against Shri Santhosh Talpade was primarily based on his retracted confession and the statements from S/Shri Abdul Sathar and John Baretto, which were not corroborated. The mahazar proceedings, which aimed to establish that Shri Abdul Sathar and Shri Santhosh Talpade knew each other, were deemed not legally recognized for adjudication. The Tribunal concluded that the statements recorded under such circumstances could not be considered voluntary and true without corroborative evidence.

4. The imposition of penalty on Shri Arif Shaikh:
The Tribunal did not find any evidence of Shri Arif Shaikh's involvement in the smuggling activities in the impugned order. Consequently, the penalty of Rs. 5.00 lakhs imposed on him was deemed unjustified. The Tribunal allowed the appeal filed by Shri Arif Shaikh, setting aside the penalty.

Conclusion:
The appeals were decided as follows:
- The appeal filed by the Revenue (Appeal No. C/1016/08) was rejected, affirming the Commissioner's decision to drop the proposal to penalize Shri Santhosh Talpade.
- The appeal filed by Shri Arif Shaikh (Appeal No. C/934/08) was allowed, and the penalty imposed on him was set aside.

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