2015 (5) TMI 766 - HC - Customs

Seizure of Chinese silk - no legal authorization of purchase could be traced - Held that - Whether the appellant was aware of the fact that he was involved in contraband goods, or was an innocent agent of the real culprit is therefore, a matter of fact, appreciation of which has been undertaken by two adjudicating authorities. Besides, the Court notes that the conclusions here were based not only on the retracted confessional statement but also based on the seizure -which was witnessed by the appellant s father, who recorded a statement (and who was cross-examined during the adjudication proceedings). Moreover, there was no material adduced by the appellant to substantiate the legitimate source of these seized goods; had they been purchased through acceptable channels, some support in the form of invoices, receipts etc. would have invariably found their way into the record. The complete absence of such material or documents negates the appellant s arguments. - Decision in the case of M.P. Goenka 2015 (2) TMI 263 - DELHI HIGH COURT distinguished - Decided against assessee.

Summary

Issues:
1. Appeal against Customs, Excise & Gold (Control) Appellate Tribunal (CESTAT) order dated 15.09.2014.

Analysis:
1. The case involved the interception of a Maruti van carrying silk fabrics of Chinese origin. Follow-up searches led to the recovery of more silk fabric at the appellant's residence. The appellant's voluntary statement under Section 108 of the Customs Act, 1962, implicated M.P. Goenka in supplying the silk. Separate proceedings were initiated for Chinese silk and polyester cloth.

2. Orders imposing penalties on the appellant were passed by the Commissioner of Customs for both cases. M.P. Goenka's appeal in the polyester goods case was allowed, citing coercion in his confessional statement. The Commissioner found the appellant's statement credible, rejecting claims of duress. The Commissioner relied on the burden of proof principle and corroborative evidence to establish guilt.

3. The Commissioner highlighted the appellant's confessional statement, corroborative evidence, and witness statements to establish involvement in the smuggling operation. The CESTAT upheld the penalty, dismissing appeals by the appellant and M.P. Goenka. The Court previously rejected M.P. Goenka's challenge to the CESTAT order.

4. The appellant's counsel argued against the sustainability of the order, emphasizing the lack of credible evidence besides the confessional statement. They contended that the appellant acted as a commission agent and was not directly involved in smuggling. The counsel referenced a Supreme Court decision on the credibility of retracted statements made during raids.

5. The Court noted the rejection of similar arguments in M.P. Goenka's appeal and cited legal precedents on the admissibility of confessional statements. The Court emphasized the need for extrinsic support for retracted statements but found no grounds to deviate from the previous decision. The appellant failed to provide evidence of the legitimate source of seized goods, leading to the dismissal of the appeal.