2001 (7) TMI 254 - AT - Customs

Evidence - Confessional statement - Admissibility of - Seizure - Reasonable belief - Burden of proof - Confiscation of foreign currency

Summary

Issues Involved:
1. Legality of the seizure of gold and foreign currencies.
2. Competency of the search warrant issued by the Superintendent.
3. Applicability of Section 123 of the Customs Act.
4. Validity of the statements and retractions.
5. Burden of proof regarding the smuggled nature of gold.
6. Confiscability of the foreign currencies.
7. Imposition and quantum of penalties.

Detailed Analysis:

1. Legality of the Seizure of Gold and Foreign Currencies:
The appellants contended that the seizure of gold and foreign currencies was illegal as they were not required to carry documents evidencing lawful possession under Chapter IV-A of the Customs Act. The Tribunal found no merit in this argument, stating that in a normal business transaction involving such a large quantity of gold, some form of documentation should be present. The absence of any documents and the behavior of the appellants, such as avoiding summons and moving for anticipatory bail, suggested an afterthought to escape legal provisions. The Tribunal upheld the seizure as lawful.

2. Competency of the Search Warrant Issued by the Superintendent:
The appellants argued that the search of the residential premises was illegal as the Superintendent was not competent to issue the search warrant under Section 105 of the Customs Act. The Tribunal dismissed this contention, referencing Customs Notification No. 11/93, which authorizes the Superintendent to conduct searches in certain circumstances. The search was deemed within legal bounds.

3. Applicability of Section 123 of the Customs Act:
The appellants claimed that Section 123, which shifts the burden of proof to the person from whom goods are seized, was not applicable as there was no reasonable belief that the gold was smuggled. The Tribunal held that the Customs Officers had sufficient grounds to form a reasonable belief at the time of seizure based on the information received and the circumstances of the interception and search. Thus, Section 123 was applicable, and the burden of proof was on the appellants.

4. Validity of the Statements and Retractions:
The appellants argued that the statements made by Umashankar were under duress and that he retracted them at the earliest opportunity. The Tribunal noted that the retraction was made seven days after the seizure and lacked detailed explanations. Citing the Supreme Court's ruling in Surjeet Singh Chhabra, the Tribunal held that a retracted confession is still an admission and binds the petitioner. Therefore, the original statements were considered valid evidence.

5. Burden of Proof Regarding the Smuggled Nature of Gold:
The Tribunal reiterated that under Section 123, the burden of proof lies on the appellants to prove that the gold was not smuggled. The appellants failed to produce credible evidence or documentation to support their claim of lawful possession. The Tribunal referenced the Supreme Court's observation in Indru Ramchand Bharvani that the circumstances under which the officer forms a reasonable belief must be judged from the officer's experienced perspective. The appellants did not discharge their burden of proof, and the gold was deemed smuggled.

6. Confiscability of the Foreign Currencies:
The appellants' defense regarding the foreign currencies was found to be implausible. The Tribunal noted that the affidavits provided by Rais and Nisar were not credible, especially since they did not appear before Customs Authorities despite being summoned. The Tribunal relied on the Mysore High Court's ruling in B.N. Munibasappa, which stated that once statements in an affidavit are controverted, the affidavit cannot be treated as evidence. The foreign currencies were acquired illegally and were liable to confiscation.

7. Imposition and Quantum of Penalties:
The Tribunal upheld the penalties imposed on Shri Gehri Lal and Shri Ashok Kumar Dagalia due to their involvement with smuggled gold and foreign currencies. However, the penalty on Umashankar was reduced to Rs. 5,000, considering his role as a carrier. The absolute confiscation of gold was upheld, but Gehri Lal was given an option to redeem the foreign currencies on payment of a fine of Rs. 1 lakh.

Conclusion:
The Tribunal disposed of the appeals by upholding the absolute confiscation of gold and the confiscation of foreign currencies with an option for redemption, and by affirming or reducing the penalties imposed on the appellants.