1999 (5) TMI 142 - AT - Customs

Summary

Issues Involved:
1. Legitimacy of the recovery of gold biscuits from the appellant.
2. Validity of the statements recorded from the appellant.
3. Imposition of penalties under the Customs Act and the Gold (Control) Act.

Detailed Analysis:

1. Legitimacy of the recovery of gold biscuits from the appellant:
Revenue's case was based on the intelligence that led to the surveillance of individuals at Kanishka Hotel, resulting in the interception of the appellant in the basement parking lot. The appellant was allegedly found with 13 gold biscuits on his person and 43 more in a briefcase. Another associate, Harish Verma, was intercepted at the hotel reception, leading to the recovery of additional gold biscuits in room 1318 of the hotel.

The appellant contested the legitimacy of the recovery, alleging that the entire case was fabricated by Customs Officers. The appellant argued that he was at the hotel for dinner, had no connection with the car or the room, and was forced to sign documents under duress.

The cross-examination of key witnesses revealed significant contradictions and inconsistencies:
- Randhir Singh stated he never went to the basement parking lot, contradicting the claim that he witnessed the recovery there.
- Mohan Joshi admitted that the gold biscuits were not opened in the basement but in room 1318.
- Shri Parmeshwaran did not personally see the appellant in the basement parking lot and admitted the briefcase was not opened there.

The tribunal concluded that the recovery of gold biscuits from the appellant was not proven by the Revenue based on the evidence on record. The Panchnama, which was supposed to document the recovery, was deemed highly suspect and unreliable.

2. Validity of the statements recorded from the appellant:
The appellant's statements, recorded under Section 108 of the Customs Act, were claimed to be made under threat, duress, and coercion. The appellant retracted these statements later, and his wife sent a telegram to the Chief Justice of Delhi High Court, indicating his unlawful detention by DRI officers.

Given the tribunal's finding that the recovery documentation was unreliable, the statements recorded from the appellant were also deemed unworthy of reliance. The tribunal emphasized that if the Revenue could falter in documenting the recovery, other documents drawn by the officers were also questionable.

3. Imposition of penalties under the Customs Act and the Gold (Control) Act:
The adjudicating authority had imposed penalties of Rs. 5 lakhs under the Customs Act and Rs. 3 lakhs under the Gold (Control) Act on the appellant. However, due to the unreliable nature of the evidence and the suspect recovery process, the tribunal set aside these penalties.

Conclusion:
The tribunal found that the recovery of gold biscuits from the appellant was not proven, and the statements recorded from him were unreliable. Consequently, the penalties imposed under the Customs Act and the Gold (Control) Act were set aside, providing relief to the appellant.