Retracted custodial confession and uncorroborated evidence cannot sustain customs penalty without proof of conscious possession.

A retracted custodial confession, without independent corroboration, was treated as insufficient to sustain penalty under the Customs Act and the Gold (Control) Act. The Department failed to prove conscious acquisition or possession of contraband gold because the panchnama, co-noticee statements, and surrounding evidence did not reliably establish recovery from the appellant or his involvement in smuggling. A fresh show cause notice issued after remand could not lawfully widen the original notice by adding a new charge, since proceedings had to remain within the scope of the remand. The penalties were therefore held unsustainable and the appeals succeeded.

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Issues: (i) Whether the appellant's penalty under the Customs Act and the Gold (Control) Act could be sustained on the basis of the alleged confessional and co-noticee statements, and whether the Department had proved that he acquired or possessed the contraband gold. (ii) Whether the fresh show cause notice issued after remand could validly enlarge the scope of the original notice by adding a further charge.

Issue (i): Whether the appellant's penalty under the Customs Act and the Gold (Control) Act could be sustained on the basis of the alleged confessional and co-noticee statements, and whether the Department had proved that he acquired or possessed the contraband gold.

Analysis: The evidence relied upon by the Department was found to be unreliable and uncorroborated. The panchnama did not satisfactorily establish the appellant's presence at the time of search, the alleged recovery from his possession, or the version that he fled and later returned. The alleged confession was recorded while he was in custody, was incomplete, and was retracted at the earliest opportunity with contemporaneous complaint of ill-treatment and medical corroboration of injuries. The statements of the co-noticees also did not establish conscious acquisition or possession by the appellant, and there was no independent evidence to prove joint possession or prior connection with smuggling.

Conclusion: The Department failed to prove that the appellant acquired or possessed the contraband gold, and the penalty could not be sustained.

Issue (ii): Whether the fresh show cause notice issued after remand could validly enlarge the scope of the original notice by adding a further charge.

Analysis: After remand, the adjudicating authority was not entitled to travel beyond the directions of the superior authority and widen the original notice by introducing an additional charge. The attempt to add a new limb of liability was inconsistent with the limits of the remand and was therefore impermissible.

Conclusion: The enlarged charge in the fresh show cause notice was not valid.

Final Conclusion: The impugned penalties were unsustainable on the evidence and in the manner in which the proceedings were pursued, and the appeals were allowed with the penalties set aside.

Ratio Decidendi: A retracted custodial statement, unsupported by independent corroboration, cannot by itself establish liability for confiscation or penalty; the Department must prove conscious possession or participation by legally reliable evidence, and proceedings after remand cannot be enlarged beyond the terms of remand.

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