Retracted customs statement cannot sustain confiscation of foreign currency without independent corroboration and lawful export evidence.

A retracted statement under the Customs Act, 1962 could not by itself justify confiscation of foreign currency without independent corroboration. The analysis noted that the appellant produced export order documents, affidavits, passport copies and other material showing the currency was received as advance payment for a completed export transaction, and a Board circular supported receipt of foreign exchange in such transactions. Because the Revenue failed to prove by independent evidence that the currency represented smuggled proceeds, the confiscation was not sustainable and the order was liable to be set aside.

---

---

Issues: Whether the absolute confiscation of foreign currency was sustainable when the initial statement under the Customs Act was retracted and the appellant produced documentary evidence showing that the currency represented advance payment against an export order.

Analysis: The foreign currency was recovered from the appellant and an initial statement suggested that it represented sale proceeds of smuggled goods. However, that statement was retracted within a short time and was supported by documentary material including export order papers, affidavits of foreign nationals, passport copies and evidence that the export transaction was completed. The Board's circular permitting receipt of foreign exchange in such export-related transactions was also relied upon. In these circumstances, a retracted statement under Section 108 of the Customs Act, 1962 could not by itself sustain confiscation without corroboration. The Revenue was required to establish by independent evidence that the currency was the proceeds of smuggled goods, but it failed to do so.

Conclusion: The confiscation under Section 111(d) of the Customs Act, 1962 was not sustainable and the impugned order was liable to be set aside in favour of the appellant.

Final Conclusion: The decision turns on the insufficiency of an uncorroborated retracted statement and the acceptance of documentary proof showing legitimate export-related receipt of foreign currency.

Ratio Decidendi: A retracted statement under Section 108 of the Customs Act, 1962 cannot, without independent corroboration, form the sole basis for confiscation when documentary evidence establishes a lawful source of the foreign currency.

---