Corroborated statements and seized records sustained clandestine removal findings, duty demand, and penalties against firm and individual.

A retracted confession can be relied on where it is mutually consistent with other statements and corroborated by seized records, ledger entries, and surrounding evidence. On that basis, the evidence was held sufficient to prove clearance of goods without bills and without payment of duty, so the clandestine removal finding and duty demand were upheld. The same evidentiary material also supported penalty on the firm for active participation in the evasion and on the individual noticee for involvement in the business and the evasion scheme. The appeal was dismissed and the duty demand and penalties were sustained.

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Issues: (i) Whether the demand of duty and findings of clandestine removal were sustainable on the basis of recorded statements, seized records, and other corroborative material. (ii) Whether the penalties imposed on the firm and the individual noticee were sustainable.

Issue (i): Whether the demand of duty and findings of clandestine removal were sustainable on the basis of recorded statements, seized records, and other corroborative material.

Analysis: The recorded statements of the partner, manager, and authorised signatory were found to be mutually consistent and supported by seized documents and ledger records recovered from the distributor's premises. The retractions were made after a considerable delay and were not supported by independent evidence showing threat, coercion, or illegal confinement. The evidentiary record was held to establish clearance of goods without bills and without payment of duty, with cash receipt reflected in the seized records and corroborated by the statements.

Conclusion: The finding of clandestine removal and the duty demand were upheld.

Issue (ii): Whether the penalties imposed on the firm and the individual noticee were sustainable.

Analysis: The firm was treated as liable where the material showed its active participation in the evasion, and the individual noticee's own statement and surrounding evidence were relied upon to show involvement in the conduct of the business and the evasion scheme. The objection that the firm could not be penalised and that there was no specific allegation against the individual noticee was rejected in light of the evidence and the legal position on liability of a firm and its responsible persons.

Conclusion: The penalties on the firm and the individual noticee were upheld.

Final Conclusion: The appeal was dismissed and the impugned order sustaining the duty demand and penalties was maintained in full.

Ratio Decidendi: A retracted confession may be relied upon when it is corroborated by independent evidence, and clandestine removal can be established by the cumulative effect of statements and seized records.

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