Customs penalty for foreign gold upheld on circumstantial evidence and preponderance of probabilities

Penalty under Section 112(b) of the Customs Act, 1962 was sustained on the basis of recovery of foreign gold from the appellant and the surrounding circumstances. The contemporaneous mahazar, the attestation and testimony of railway officials who witnessed the seizure, and the appellant's failure to protest at remand or thereafter were treated as sufficient to establish recovery from his person. The Tribunal held that the Department could rely on surrounding circumstances and the presumptions reflected in Sections 106 and 114 of the Indian Evidence Act, 1872, even without invoking Section 123 of the Customs Act, and that the adjudication standard was preponderance of probabilities rather than proof beyond reasonable doubt.

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Issues: Whether the penalty imposed under Section 112(b) of the Customs Act, 1962 was sustainable on the evidence of recovery of foreign gold from the appellant and the surrounding circumstances.

Analysis: The contemporaneous mahazar prepared at the time of seizure, the attestation and testimony of the railway officials who witnessed the recovery, and the appellant's failure to protest at the time of remand or thereafter were treated as sufficient circumstances to establish recovery from his person. The adjudicating authority was held entitled to rely upon these circumstances even though the statutory presumption under Section 123 of the Customs Act, 1962 was not invoked. The Tribunal also held that the Department could discharge its burden by relying on surrounding circumstances and the presumptions reflected in Sections 106 and 114 of the Indian Evidence Act, 1872, and that the standard in adjudication proceedings was preponderance of probabilities rather than proof beyond reasonable doubt.

Conclusion: The penalty under Section 112(b) of the Customs Act, 1962 was upheld and the appeal failed.

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