Customs penalty needs tangible corroboration: retracted statements and circumstantial evidence alone were treated as insufficient here.

Penalty under the Customs Act was discussed as unsustainable where the allegation of abetment rested mainly on retracted statements of co-noticees and circumstantial material without tangible corroboration. The text states that uncorroborated confessions and bank transactions, without evidence linking the noticee to procurement, export, receipt of goods, or receipt of consideration, were insufficient to support penalty. It also notes that a Dubai resident, with no asserted presence in India during the relevant period, could not be fastened with penalty on the facts of the case. The stated result was that the impugned penalty order was unsustainable and consequential relief followed.

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Issues: (i) Whether penalty under Section 114(3)(i) of the Customs Act, 1962 could be sustained on the basis of retracted statements and circumstantial evidence without tangible corroboration; (ii) Whether the appellant, being a resident of Dubai and not shown to have been present in India during the relevant period, could be fastened with penalty under the Customs Act, 1962.

Issue (i): Whether penalty under Section 114(3)(i) of the Customs Act, 1962 could be sustained on the basis of retracted statements and circumstantial evidence without tangible corroboration.

Analysis: The allegation of abetment was founded principally on statements of co-noticees and bank transactions. The Tribunal noted that the earlier appeal arising from the same investigation had already held that the record lacked tangible material linking the appellant to procurement, export, receipt of goods, or receipt of consideration, and that uncorroborated confessions of co-accused were insufficient to sustain the charge. In the present matter, the same investigation, the same exporters, and the same statements were relied upon, but no additional material was shown to justify a different view.

Conclusion: The penalty was not sustainable on the basis of the material relied upon by the department and was set aside in favour of the appellant.

Issue (ii): Whether the appellant, being a resident of Dubai and not shown to have been present in India during the relevant period, could be fastened with penalty under the Customs Act, 1962.

Analysis: The Tribunal further noted that the appellant was a resident of Dubai and the Revenue did not assert his presence in India during the relevant period. Relying on the earlier order, the Tribunal accepted that the Customs Act could not be applied against a person residing outside India on the facts of the case, and this furnished an additional ground for relief.

Conclusion: The penalty could not be imposed on this ground as well, which supported the appellant's challenge.

Final Conclusion: The impugned penalty order was unsustainable and the appeal was allowed with consequential relief.

Ratio Decidendi: A penalty under the Customs Act cannot be upheld merely on retracted confessional statements and circumstantial material unless there is tangible corroboration linking the noticee to the alleged offence.

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