Penalty for storing confiscated goods upheld in principle, but reduced where key statement lacked corroboration

Penalty for keeping confiscated goods in the appellants' premises was upheld in principle because they had allowed storage without verifying the goods' nature or ownership. However, the Tribunal found the main inculpatory statement uncorroborated, as its maker had died and no independent material supported the Revenue's case. It also noted that the appellants' explanation that the goods were kept at another person's request was not effectively disproved by deeper investigation. On that basis, interference was justified to the extent of reducing the penalty substantially while maintaining liability.

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Issues: Whether the penalty imposed on the appellants for keeping the confiscated goods in their premises warranted interference and, if so, to what extent.

Analysis: The Tribunal found that the principal statement implicating the appellants stood uncorroborated, as the maker of that statement had died and no independent material was brought on record to support the Revenue's case. The appellants consistently maintained that the goods had been kept in their house at the request of another person, and the Tribunal noted the absence of any in-depth investigation to verify that explanation. At the same time, it was held that the appellants had permitted storage of the goods without proper verification of their nature or ownership, which justified the imposition of penalty.

Conclusion: The penalty was upheld in principle but reduced from Rs. 1,50,000 each to Rs. 15,000 each.

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