Contemporaneous admission of unauthorized clearance sustains customs duty demand and penalty despite a belated unsupported retraction.

A contemporaneous admission of unauthorized clearance of imported fabrics, corroborated by stock verification and surrounding evidence, was treated as reliable proof for sustaining customs duty demand and penalty. The Director's statements recorded that the fabrics were sold for cash without payment of duty and without accounting for the clearance in the books, and the later affidavit retracting that position was found unsupported by any corroborative material and filed belatedly. A plea of duress was also unsubstantiated. Since admitted facts do not require further proof, the challenge to the duty demand and penalty failed.

---

---

Issues: Whether the demand of customs duty and penalty was sustainable on the basis of the Director's statements and the panchanama, and whether the belated affidavit/retraction dislodged the finding of unauthorized clearance of imported fabrics.

Analysis: The imported velour pile fabrics were found to have been received in the factory and, within a short time, the officers recorded stock verification in the presence of panchas. The Director's contemporaneous statement, as well as the later statement, admitted sale of the imported fabrics to a purchaser against cash without payment of duty and without accounting for the clearance in the books. The subsequent affidavit claiming that only part of the goods had been sold was unsupported by any corroborative material and was filed much later. The plea of duress was also not substantiated, and the admissions were treated as reliable evidence. Since admitted facts need not be proved, the challenge to the duty demand and penalty failed.

Conclusion: The demand of customs duty and the penalty were upheld and the assessee's challenge was rejected.

Ratio Decidendi: A contemporaneous, un-retracted admission of unauthorized clearance, supported by physical verification and other surrounding evidence, can sustain duty demand, and a belated unsupported retraction or affidavit will not displace such evidence.

---