2008 (9) TMI 314 - AT - Customs

Confiscation of Imported Goods smuggling There is no direct evidence of smuggled nature of ball bearings from Nepal. While it is admitted that the ball bearings are of foreign origin the only evidence is in the statement of Shri Karam Chand (retracted later) who submitted that the same were according to the dalals smuggled from Nepal. This evidence is of hear say in nature. - Such evidence could be accepted only if some corroboration is available Regarding valuation in the absence of specification of the ball bearings in the Panchnama linking with import documents relating to import of identical goods or similar goods to show the value arrived at it may not be advisable to accept the value in the Panchnama Since there is no evidence of smuggled nature confiscation can not be upheld.

Summary

Issues:
- Appeal against order dated 19-9-2005 in de novo proceedings following Tribunal's order dated 7-11-2003.
- Seizure of ball bearings valued at Rs. 2,50,34,750.
- Statement of Shri Karam Chand.
- Confiscation of goods and imposition of penalties.
- Dispute over the nature of seized ball bearings.
- Allegations of detention and health issues.
- Lack of corroboration and evidence.
- Disposal of ball bearings and procurement details.
- Involvement of partners and suppliers.
- Discrepancies in statements and evidence.
- Valuation of the seized goods.

Analysis:
The case involved appeals against an order dated 19-9-2005 following de novo proceedings initiated after a previous Tribunal order. The appellant firm, dealing in ball bearings, faced seizures valued at Rs. 2,50,34,750, with disputed valuation. The statement of Shri Karam Chand, a partner, played a crucial role, where he mentioned procurement details and involvement of suppliers. Allegations of detention and health issues raised concerns over the voluntariness of the statement. Discrepancies emerged regarding the nature of the seized ball bearings, with no corroboration or evidence supporting smuggling claims.

The Department argued for the voluntary nature of the statement and highlighted discrepancies in the appellant's claims regarding procurement and payments. They shifted the burden of proof to the appellant, emphasizing the admission of foreign origin and alleged smuggling. However, the Tribunal found the evidence insufficient, especially as the statement of Shri Karam Chand was retracted promptly and lacked corroboration. The failure to record statements from other involved parties weakened the case against the appellants.

The Tribunal carefully considered submissions from both sides and found no direct evidence of smuggling. The retraction of the key statement, lack of corroboration, and missed opportunities to gather crucial evidence led to the appeal's allowance. Issues related to the disposal of ball bearings, procurement practices, and valuation were discussed, with the Tribunal emphasizing the lack of reliable evidence to support the Department's claims. Ultimately, both appeals were allowed, providing consequential relief to the appellants.

In conclusion, the judgment highlighted the importance of corroborative evidence, voluntariness of statements, and burden of proof in cases involving seizure and alleged smuggling. The lack of reliable evidence and discrepancies in statements led to the favorable decision for the appellants, emphasizing the need for a robust evidentiary foundation in such legal proceedings.