Documentary stock records prevail over uncorroborated confession in diversion allegations involving duty-free imports.

Contemporaneous and undisputed stock records showed that the appellant had sufficient duty-free balance when the second sale of phenol was made, so the allegation that duty-free imports were diverted was not established. The Tribunal preferred documentary evidence over uncorroborated oral or confessional material, and on that basis held that the customs duty demand, interest and penalty could not be sustained.

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Issues: Whether the demand of customs duty, interest and penalty could be sustained on the allegation that the appellant diverted duty-free imported phenol and sold it from the imported stock.

Analysis: The dispute turned on whether the second sale of phenol was made out of the duty-free import under advance authorisation. The stock register, which contained the endorsement of the investigating agency, showed that on the date of the second sale the appellant had a closing balance of 12.387 MT, which was more than the duty-free quantity shown as received. That documentary record was not disputed. The earlier demand for the first sale had also been dropped on the same stock-based reasoning. In these circumstances, the Tribunal preferred the documentary evidence over the oral/confessional material, applying the principle that documentary evidence prevails over oral evidence.

Conclusion: The allegation of diversion of duty-free phenol was not established, and the duty demand and penalty were unsustainable.

Final Conclusion: The appellant was entitled to relief, and the impugned order confirming duty and penalty could not stand.

Ratio Decidendi: Where contemporaneous and undisputed stock records show sufficient duty-free balance, a demand for diversion cannot be sustained merely on the basis of an uncorroborated confession or oral statement.

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