2000 (9) TMI 547 - AT - Customs

Summary

Issues:
- Imposition of penalties and confiscation of vehicle under the Customs Act
- Burden of proof regarding smuggled goods
- Retraction of statements by the appellants

Imposition of Penalties and Confiscation of Vehicle:
The appellants challenged the penalties and confiscation of their vehicle imposed under Sections 112 and 115 of the Customs Act. The penalties amounted to Rs. seven lakh on one individual and Rs. three lakh on another, with an option to redeem the confiscated vehicle on payment of a fine. The Customs authorities intercepted a vehicle belonging to the appellants containing foreign origin goods without proper documentation. The adjudication order resulted in the confiscation of goods and penalties on the appellants.

Burden of Proof Regarding Smuggled Goods:
The appellants argued that since the goods were not notified under Section 123 of the Customs Act and fell under the Open General License (OGL) as per Policy 1997-2001, the burden of proof that the goods were smuggled lay with the Customs Authorities. They cited precedents where the burden of proof of illicit goods rested on the department when goods were not listed under Section 123. The department relied on the appellants' statements recorded under Section 108 of the Customs Act, which were later retracted, and failed to investigate certain bills of entries submitted by other parties, leading to a lack of evidence supporting the smuggling allegations.

Retraction of Statements by the Appellants:
The appellants retracted their statements admitting the goods were smuggled when produced before the Judicial Magistrate, claiming coercion during the initial recording. They argued that reliance on these retracted statements was improper for imposing penalties. Additionally, certain goods claimed by other entities were unconditionally released, highlighting inconsistencies in the investigation and lack of conclusive findings regarding the goods in question. Due to the failure of the revenue to prove the goods were smuggled and the reliance on retracted statements, the penalties imposed and the confiscation of the vehicle were deemed unsustainable. Consequently, the penalties and the vehicle confiscation order were set aside, and the appeals were allowed.