Misdeclaration must be proved by cogent evidence before confiscation and penalty for imported goods can stand.

Confiscation and penalty for misdeclaration of imported second-hand looms could not be sustained because the Department failed to prove, with reliable and cogent evidence, that the declared year of manufacture was false. Serial-number comparisons, unauthenticated enquiry material, and the alleged takeover history of the manufacturer were insufficient, especially where the machines were not examined by a Chartered Engineer at import or seizure and the importer's representative did not admit misdeclaration. The alleged violation of the import policy was therefore not established, and the benefit of doubt went to the importer, resulting in setting aside of the impugned order and consequential relief.

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Issues: Whether the Department proved that the imported second-hand looms were misdeclared as to year of manufacture so as to justify confiscation and penalty under the Customs Act, 1962.

Analysis: The Revenue relied on serial-number comparisons, unauthenticated enquiry material, and the alleged takeover history of the manufacturer to infer that the machines were older than declared. The imported machines were not examined by any Chartered Engineer at the time of import or seizure, the source of the serial-number information was not satisfactorily disclosed, and the statement of the importer's representative did not amount to an admission of misdeclaration. On the available material, the inference of false declaration rested on conjecture rather than proof. In such circumstances, the benefit of doubt had to go to the importer.

Conclusion: The allegation of misdeclaration and violation of the import policy was not proved. The confiscation and penalty could not be sustained and the finding was in favour of the assessee.

Final Conclusion: The impugned order was set aside and the appeal was allowed with consequential relief.

Ratio Decidendi: Confiscation and penalty for misdeclaration cannot be sustained unless the Department establishes the alleged false declaration with reliable and cogent evidence; conjecture and unauthenticated material are insufficient, and any doubt must be resolved in favour of the importer.

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