1991 (7) TMI 198 - AT - Customs

Summary

Issues Involved:
1. Whether the Adjudicating Officer was justified in holding that the diamonds and wrist watches found in the possession of the appellants were smuggled goods.
2. Whether the appellants discharged the burden of proof to show that the diamonds and watches were licitly imported.
3. Whether the confiscation of the amount of Rs. 71,000.00 under Section 121 of the Customs Act, 1962 is justifiable.
4. Whether the imposition of the penalty on the appellants under Section 112 of the Customs Act, 1962 is justified.

Detailed Analysis:

Issue 1: Justification for Holding Diamonds and Wrist Watches as Smuggled Goods
The Tribunal examined whether there was a "reasonable belief" that the goods were smuggled. It was noted that the seizure list described the diamonds as "appearing to be diamonds," indicating uncertainty. The Tribunal cited various legal precedents, including the Supreme Court's observation that "reasonable belief" must be based on prima facie material relevant and germane to the conclusion. The Tribunal found that there was no specific information indicating that the appellants were dealing with smuggled diamonds or watches. The mere obstruction by Sajjan Kumar Poddar was not sufficient to establish reasonable belief. Consequently, the Tribunal concluded that there was no reasonable belief to justify the seizure of the goods.

Issue 2: Discharge of Burden of Proof by Appellants
The Tribunal considered whether the appellants discharged the burden of proof to show that the diamonds and watches were licitly imported. The appellants contended that the initial statement by Sajjan Kumar Poddar was obtained under duress and was not voluntary. The Tribunal noted that the statement did not constitute a confession of smuggling. The appellants produced various bills and documents to support their claims, which were investigated by the Department. The Tribunal emphasized that the entire evidence on record should be considered and discussed, and the documents produced by the appellants should not be discarded merely based on the initial statement. The Tribunal found that the appellants had produced sufficient evidence to discharge the burden of proof.

Issue 3: Confiscation of Indian Currency of Rs. 71,000.00
The Tribunal examined whether the confiscation of Rs. 71,000.00 was justified under Section 121 of the Customs Act, 1962. The Tribunal cited precedents that mere possession of currency and an unsatisfactory explanation cannot replace proof. There was no evidence to show that the currency represented the sale proceeds of smuggled goods. The Tribunal concluded that the confiscation of the currency was not in accordance with the law and set it aside.

Issue 4: Imposition of Penalty under Section 112 of the Customs Act, 1962
Given the findings on the first three issues, the Tribunal found that the imposition of penalties on Sajjan Kumar Poddar and Suresh Kumar Poddar was not justified. The penalties were set aside.

Conclusion
The Tribunal allowed the appeals, setting aside the confiscation orders for the diamonds, wrist watches, and Indian currency. The penalties imposed on the appellants were also set aside, and the appellants were entitled to consequential reliefs.