1990 (5) TMI 157 - AT - Customs

Summary

Issues Involved:
1. Whether the appellant was in conscious possession of the briefcase and the 10 gold pieces and foreign lead pencils seized on 28-3-1987 from his office-cum-residence.
2. Whether the imposition of penalty under Section 112(1)(B) of the Customs Act, 1962, and under Section 74 of the Gold (Control) Act, 1968, on the appellant is legal.

Issue-Wise Detailed Analysis:

1. Conscious Possession of Briefcase and Seized Items:
The primary question was whether the appellant was in conscious possession of the briefcase containing 10 gold pieces and foreign lead pencils. The Customs and Central Excise officers conducted a search on 28-3-1987 and found the briefcase in the appellant's office-cum-residence. The appellant claimed that the briefcase belonged to a customer, Shri Promotosh Bhowmik, who left it temporarily. However, the department could not trace any such person. The appellant's initial statement admitted the recovery of the briefcase from his premises but later retracted, claiming coercion. The adjudicating authority did not discuss the retraction adequately, which was a significant lapse. The appellant's consistent denial of knowledge about the briefcase's contents and the absence of evidence proving conscious possession raised doubts. The inventory and search list did not specify the exact location of the seizure within the premises, adding to the uncertainty.

2. Legality of Imposition of Penalty:
The penalties under Section 112(1)(B) of the Customs Act and Section 74 of the Gold (Control) Act were imposed based on the assumption that the appellant was in conscious possession of the contraband. The adjudicating authority's orders were based on the appellant's alleged failure to produce Shri Promotosh Bhowmik and the recovery of the briefcase from his premises. However, the appellant's movements were restricted by bail conditions, and the department did not make sufficient efforts to trace Shri Bhowmik. The adjudicating authority's reliance on the appellant's initial statement, which was retracted, and the lack of corroborative evidence weakened the case. The Supreme Court's principle that departmental cases should be decided on probabilities and not strict proof beyond reasonable doubt was considered, but the evidence did not sufficiently establish conscious possession.

Conclusion:
The Tribunal found that the evidence did not conclusively prove that the appellant was in conscious possession of the contraband items. The retraction of the initial statement, lack of specific seizure location details, and inadequate efforts to trace Shri Promotosh Bhowmik created reasonable doubt. Consequently, the appellant was given the benefit of doubt, and the appeals were allowed, entitling the appellant to consequential reliefs.