Voluntary confessional statements can support clandestine removal, but cannot be used selectively for a different demand basis.

A voluntary and truthful confessional statement, supported by contemporaneous records such as purchase orders, internal documents and references to unbilled clearances and unaccounted sales, can sustain a clandestine removal demand without further corroboration for the relevant period. On those facts, the duty demand for 2000-2001 was upheld. However, an admission cannot be relied on selectively for a different period on a different evidentiary basis; where the second demand was worked out separately and not supported by the same statement in toto, the demand for 2001-2002 was unsustainable and was set aside. Penalties were to be recalculated proportionately on that basis.

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Issues: (i) Whether the retracted confessional statement of the director could, on the facts, sustain the demand for duty for the year 2000-2001 on clandestine removal; (ii) Whether the demand for the year 2001-2002, being worked out on a different basis and not supported by the same statement in toto, could be sustained.

Issue (i): Whether the retracted confessional statement of the director could, on the facts, sustain the demand for duty for the year 2000-2001 on clandestine removal.

Analysis: The statement was found to be voluntary and truthful, with no credible showing of threat, coercion or inducement. The retraction came much later and did not specifically allege duress. The statement was also supported by contemporaneous material such as purchase orders, internal records and references to unbilled clearances and unaccounted sales. In such circumstances, the statement could be relied upon without further corroboration to establish clandestine removal for the relevant period.

Conclusion: The duty demand for the year 2000-2001 was upheld.

Issue (ii): Whether the demand for the year 2001-2002, being worked out on a different basis and not supported by the same statement in toto, could be sustained.

Analysis: The adjudicatory basis for the second period was not the same as the admitted cash sales relied upon for the first period. Since an admission cannot be relied upon selectively, the demand for the later period could not stand on the same confessional statement in part. The demand for 2001-2002 was therefore unsustainable on the material as framed.

Conclusion: The duty demand for the year 2001-2002 was set aside.

Final Conclusion: The decision sustained the duty liability for 2000-2001, eliminated the demand for 2001-2002, and required fresh quantification and proportional reduction of penalties on that basis.

Ratio Decidendi: A voluntary and truthful confessional statement may, if supported by surrounding contemporaneous material, form the basis of a clandestine removal demand; but where the same statement is not relied upon in toto, it cannot be used selectively to sustain a different period on a different footing.

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