2000 (4) TMI 85 - AT - Customs

Issues Involved:
1. Voluntariness and reliability of the respondent's statements.
2. Confiscation of seized goods of foreign origin.
3. Confiscation of Indian and foreign currencies and foreign exchange.
4. Allegations of illegal sale of foreign origin goods.
5. Confiscation of cheques/drafts seized from the respondent's shop.
6. Confiscation of Indian currency seized from the respondent's residence.
7. Confiscation of a US $100 currency note.
8. Confiscation of notified and non-notified goods under the Customs Act.

Summary:

1. Voluntariness and Reliability of Statements:
The Tribunal examined the statement of the 1st respondent, Shri S.K. Dhingra, recorded on 11-10-1991, which he retracted on 12-10-1991, claiming it was made under coercion. The Tribunal upheld the Collector's finding that the statement was not voluntary, citing the Calcutta High Court's decision in Mahindra Chandra Dey v. CEGAT, which emphasized the need to consider the state of mind and physical condition of the person making the statement. The Tribunal also noted the lack of independent corroboration for the retracted statement, referencing the Bombay High Court's decision in State of Maharashtra v. Sayed Mohamed Hashim Al Musari.

2. Confiscation of Seized Goods of Foreign Origin:
The respondents contended that the seized goods were lawfully imported for diplomats' use and kept in temporary custody. The Tribunal found that the Department failed to disprove this claim, supported by Embassy letters and statements from personnel of M/s. Air Sea Forwarders. The burden of proof, which shifted to the Department, was not successfully discharged.

3. Confiscation of Indian and Foreign Currencies and Foreign Exchange:
The Tribunal upheld the Collector's decision that the Indian currency of Rs. 15 lakhs and foreign exchange worth US $29,740 were not liable to confiscation u/s 121 of the Customs Act. The Department failed to meet the requirements of Section 121, which necessitates proving that the currency represented sale proceeds of smuggled goods.

4. Allegations of Illegal Sale of Foreign Origin Goods:
The Tribunal agreed with the Collector's decision to give the benefit of doubt to the respondents regarding the allegation of illegal sale of foreign origin goods imported for diplomats' use. The Tribunal cited the Supreme Court's ruling in Naidu v. State of Maharashtra that suspicion, however grave, cannot take the place of proof.

5. Confiscation of Cheques/Drafts Seized from the Respondent's Shop:
The Tribunal upheld the Collector's finding that the cheques/drafts seized from the respondent's shop were given by diplomats for onward transmission to foreign suppliers and did not represent sale proceeds of smuggled goods. The Department failed to discredit the respondents' explanation or provide contrary evidence.

6. Confiscation of Indian Currency Seized from the Respondent's Residence:
The Tribunal upheld the Collector's decision that the Indian currency of Rs. 15 lakhs was not liable to confiscation u/s 121 of the Customs Act. The Department's allegation that the amount represented sale proceeds of smuggled goods was based on the retracted statement of 11-10-1991, which was deemed unreliable.

7. Confiscation of a US $100 Currency Note:
The Tribunal endorsed the Collector's finding that the US $100 currency note, claimed to be a gift from a diplomat for the respondent's son's Mundan ceremony, was not liable to confiscation. The Department's challenge to this finding was considered flimsy.

8. Confiscation of Notified and Non-Notified Goods:
The Tribunal upheld the Collector's decision that non-notified goods among the seized items were not liable to confiscation u/s 111 of the Customs Act, as the Department failed to prove they were smuggled. For notified goods, the Tribunal agreed with the Collector's meticulous consideration and found no reason to disagree with his findings.

Conclusion:
The Tribunal found no merit in the Department's appeal and accordingly rejected it.

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