2015 (2) TMI 263 - HC - Customs

Imposition of penalty - appellant contended that order of penalty was based entirely on his retracted confession - Seizure of goods - Unlawful import of goods - non production of relevant documents - Held that - The orders of the Commissioner (Preventive) and the CESTAT in our opinion are entirely in accordance with the law declared by the Supreme Court. Both the appellant and Sanjay Maheshwari retracted their confessional statements to the customs officer. In the polyester goods case it was found that the appellant s confessional statement was extracted under duress and because there was no other corroborative evidence he was exonerated. In the Chinese silk case which is before us this conclusion was accepted by the Commissioner (Preventive) who then went on to examine the corroborative evidence present. One important piece of corroborative evidence was the confessional statement of Sanjay Maheshwari with respect to which on an analysis of the facts and circumstances of the case the Commissioner found that there was no proof of duress and that consequently the retraction was invalid. We find no fault with the manner in which the Commissioner appreciated the evidence before him. The appellant was permitted to cross examine Sanjay Maheshwari which he did extensively. In this connection it was urged that the said individual had admitted not having met the appellant at all and consequently his deposition could hardly have implicated the former. While this is correct yet that admission is to be viewed in the context. Sanjay Maheshwari also stated that though he had not met the appellant he had conversed with him. Court notes that proceedings under tax legislation such as the FCRA or the Customs Act do not require the prosecution to discharge the criminal-law burden of proof beyond reasonable doubt. Under such proceedings a balance of probabilities is satisfactory. - It is not the task of this Court exercising its appellate power in cases involving substantial questions of law to review or secondguess (or even third guess at times) the factual findings based on evidence considered by the lower authorities but only to correct an order if it is based on irrelevant or manifestly incorrect construction of the facts or if based on mis-appreciation of law or on non-application of mind. In the present case this Court sees no reason to interfere with the concurrent findings of the Commissioner (Preventive) and the CESTAT which are both reasoned correctly stating the law and citing relevant evidence and reasoning in order to arrive at their conclusions. - Decided against Assessee.

Summary

Issues Involved:
1. Validity of the penalty imposed on the appellant by the Commissioner of Customs (Preventive).
2. The evidentiary value of retracted confessional statements.
3. The corroborative evidence supporting the allegations.
4. Standard of proof in adjudication proceedings under tax legislation.

Detailed Analysis:

1. Validity of the Penalty Imposed:
The appellant, representing Adiya Trading Company, was penalized by the Commissioner of Customs (Preventive) for involvement in smuggling Chinese silk. The penalty was affirmed by the CESTAT. The appellant challenged this on the grounds of duress in his confessional statement and lack of corroborative evidence.

2. Evidentiary Value of Retracted Confessional Statements:
The appellant argued that his confessional statement, retracted in court, was obtained under duress. The Commissioner noted that the burden of proving duress lies on the appellant, which he failed to do. The Commissioner referenced the Supreme Court's decision in K.I. Pavunny vs Assistant Commissioner, which states that a customs officer is not a police officer, and thus confessions to them are admissible. The Commissioner found no medical evidence of duress and dismissed the retraction as vague.

3. Corroborative Evidence Supporting the Allegations:
The Commissioner relied on multiple pieces of evidence:
- Sanjay Maheshwari's confessional statement, which was deemed voluntary and binding.
- Statements from the godown keeper and manager of M/s. Prakash Transport.
- Documentary evidence such as the panchnama, delivery register, and slips.
- The connection between the appellant and Sanjay Maheshwari through transactions involving Chinese silk.

The Commissioner concluded that these pieces of evidence were mutually corroborative and supported the allegations against the appellant.

4. Standard of Proof in Adjudication Proceedings under Tax Legislation:
The Court highlighted that proceedings under tax legislation like the Customs Act are based on the balance of probabilities, not the criminal-law standard of proof beyond reasonable doubt. The Supreme Court in Radheyshyam Kejriwal vs State of West Bengal affirmed that adjudication proceedings require a preponderance of evidence.

Conclusion:
The Court upheld the orders of the Commissioner and the CESTAT, finding no fault in their appreciation of evidence or application of law. The appeal was dismissed, affirming the penalty imposed on the appellant. The Court emphasized that its role is not to re-evaluate factual findings but to correct any legal misapprehensions, which were not present in this case.