2004 (2) TMI 210 - AT - Customs

Smuggling - Silver bars melted in the refinery - foreign marking - Seizure - Confiscation - Reasonable belief - Evidence - Retraction of Statement - Burden of proof - HELD THAT - There is an essential difference between burden of proof as a matter of law and pleading and as a matter of adducing evidence. The burden in the former sense is upon the party who invites a decision in the existence of certain facts which he asserts. This burden is constant and never shifts. But the burden to prove in the sense of adducing evidence, i.e. onus of proof shifts from time to time having regard to the evidence adduced by one party or the other, or the presumption of fact or law raised in favour of the one or the other. It is only on the application of the principles of shifting onus, the rule relating to burden of proof in Section 106 and the presumption that may be drawn u/s 104 of the Evidence Act can sustain in 1961 (3) TMI 107 - SUPREME COURT . Applying the above maxim as laid down by the Apex Court to the present case, it is observed that the department by adducing circumstantial evidence has brought out that restricted/prohibited goods were brought into the country without a valid licence. Rajendrabhai's attempt to prove the licit origin of the silver as discussed above has several loopholes. Just to mention a few one may revert back to his statement read with Hemubhai's (the worker of the refinery) statement dated 25-12-1990. Hemubhai says that Rajendrabhai has asked him to unload the silver and attend to its melting. This was on 25th itself. Rajendrabhai says that he was in possession of bills for the purchase of the silver on 25th. If that were to be so, there is no reason why he has not disclosed this fact to his worker or for that matter to his nephew whom he has asked to go and attend the work in the refinery on 25th. If he has disclosed the fact of purchase of silver to these persons, their statements would have been to the effect that the silver in question was sent by the owner of the refinery through his driver. Hemubhai would not have stated that an unknown person has delivered the silver. He would have said the unknown person was none other than the driver of Rajendrabhai himself. There are other inconsistencies as well. The driver says that on 24th itself he was told that he had to go to the refinery with silver by the brother of Rajendrabhai whereas as Rajendrabhai says that he brought the silver to Ahmedabad on 25th and he himself directed the driver not his brother. There are other inconsistencies as well. All these inconsistencies throw serious doubts on the version of Rajendrabhai. The Commissioner rightly therefore, rejected his version. Basing on the circumstantial evidence, he concluded that the onus to prove the fact of licit origin of the silver has not been discharged by Rajendrabhai who claimed the ownership. The present case is not such that no circumstantial evidence exists to establish the illicit origin. Once Ajay Parekh stated that the silver he dealt with had foreign markings, he has to also tell the department how he acquired it legally. Rajendrabhai's explanation being what it is, the department rightly discarded his theory. Having regard to what has been discussed, the following order is passed. While passing the order, it is observed that the appellants got a waiver of pre-deposit of penalty all these years. The confiscation of silver valued at Rs. 22,85,784/- is upheld. Penalty on Rajendra Jagannath Parekh is reduced to Rs. 5 lakhs. Penalty on Ajay Shashikant Parekh is retained. The appeal of Rajendra Jagannath Parekh is partly allowed. The appeal of Ajay Shashikant Parekh is rejected.

Issues Involved:
1. Confiscation of silver u/s 111(d) and 112 of the Customs Act.
2. Validity of statements and retractions.
3. Burden of proof and circumstantial evidence.
4. Impact of criminal acquittal on departmental proceedings.

Summary:

1. Confiscation of Silver u/s 111(d) and 112 of the Customs Act:
The Commissioner confiscated the silver and imposed penalties under Sections 111(d) and 112 of the Customs Act. The officers of DRI seized 704 silver chorsas from a refinery based on intelligence that the silver was smuggled. The silver was found without foreign markings, but statements indicated it was melted from 10 silver bars with foreign markings.

2. Validity of Statements and Retractions:
Shri Ajay Parekh admitted that the silver bars had foreign markings, but later retracted his statement. The Commissioner found no evidence of coercion or duress in obtaining the statements and did not consider the retractions credible. The workers' statements corroborated the presence of the silver bars and their subsequent melting.

3. Burden of Proof and Circumstantial Evidence:
The burden of proof was on the department to prove the smuggled nature of the silver. The Commissioner relied on circumstantial evidence, including the absence of stock register entries and the failure to produce legal documents for the silver's possession. The owner, Rajendrabhai, provided a delayed and inconsistent explanation of the silver's purchase from Delhi, which was rejected by the Commissioner.

4. Impact of Criminal Acquittal on Departmental Proceedings:
The appellants were acquitted in criminal proceedings, but the Commissioner held that the acquittal did not affect the departmental findings. The Tribunal noted that while criminal proceedings require proof beyond reasonable doubt, departmental proceedings rely on a preponderance of probability. The Tribunal upheld the confiscation of the silver and reduced the penalty on Rajendrabhai to Rs. 5 lakhs, while retaining the penalty on Ajay Parekh.

Conclusion:
The Tribunal upheld the confiscation of the silver and the penalties imposed, with a partial reduction in the penalty for Rajendrabhai. The appeal of Rajendra Jagannath Parekh was partly allowed, and the appeal of Ajay Shashikant Parekh was rejected.

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