Customs Tribunal: Confiscation overturned, penalty upheld for foreign currency violation

The Tribunal upheld the jurisdiction of the Collector of Customs (Preventive) in Calcutta, clarified that Section 123 of the Customs Act does not apply to Indian currency, deemed the appellant's confessional statement as voluntary and true, found Rabiul Islam's statement lacking corroboration, and set aside the confiscation of Indian currency while upholding the penalty under Section 112 of the Customs Act based on the appellant's admission regarding foreign currency. The appeal was partly allowed with the confiscation overturned but the penalty maintained.

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Issues Involved:
1. Jurisdiction of the Collector of Customs (Preventive)
2. Applicability of Section 123 of the Customs Act to Indian currency
3. Voluntariness and truthfulness of the appellant's confessional statement
4. Voluntariness and truthfulness of Rabiul Islam's statement
5. Evidence proving Indian currency as proceeds of smuggled gold and imposition of penalty under Section 112 of the Customs Act

Issue-wise Detailed Analysis:

1. Jurisdiction of the Collector of Customs (Preventive):
The appellant contended that the adjudication by the Collector of Customs (Preventive) was in excess of his power. However, the Tribunal noted Notification No. 250-Cus dated 27-8-1983, which conferred jurisdiction to the Collector of Customs (Preventive) to deal with such cases. The mere fact that no prosecution sanction was given did not negate the Collector's jurisdiction. Therefore, the adjudication was within the jurisdiction of the Collector of Customs (Preventive), Calcutta.

2. Applicability of Section 123 of the Customs Act to Indian Currency:
The appellant argued that Section 123 of the Customs Act, which shifts the burden of proof to the accused, did not apply to Indian currency. The Tribunal agreed, noting that Indian currency is not a notified item under Section 123 or Chapter IV-A of the Customs Act. Consequently, the burden remained on the department to prove that the Indian currency was the proceeds of smuggled gold. The Tribunal held that the department must prove that the seized Indian currency was the sale proceeds of smuggled gold.

3. Voluntariness and Truthfulness of the Appellant's Confessional Statement:
The appellant claimed his statement was extracted under threat and coercion, and thus not voluntary or true. The Tribunal examined the timing and circumstances of the retraction, which occurred more than a month after the initial statement. The Tribunal found no evidence of physical torture or coercion and noted the delayed retraction. The Tribunal concluded that the appellant's statement was voluntary and given under Section 108 of the Customs Act. The Tribunal cited previous decisions supporting the validity of statements unless promptly retracted or proven to be coerced.

4. Voluntariness and Truthfulness of Rabiul Islam's Statement:
Rabiul Islam's statement was also retracted late, on 17-12-1982, and contained detailed information. The Tribunal found it voluntary. However, his statement did not indicate that the Indian currency was the proceeds of smuggled gold. The Tribunal noted that a co-accused's statement requires independent corroboration, which was lacking. Therefore, Rabiul Islam's statement did not help the department prove the Indian currency was from smuggled gold.

5. Evidence Proving Indian Currency as Proceeds of Smuggled Gold and Imposition of Penalty under Section 112 of the Customs Act:
The Tribunal found no evidence proving that the Indian currency was the proceeds of smuggled gold. The appellant's statement did not admit that the Indian currency was from gold sales, and Rabiul Islam's statement did not corroborate this. Consequently, the confiscation of the Indian currency was set aside, and it was ordered to be returned to the appellant. However, the appellant's admission regarding the foreign currency being proceeds of smuggled gold justified the penalty under Section 112. The Tribunal maintained the penalty, noting that the appellant's confession was voluntary and true, and thus sufficient to establish his involvement in smuggling activities.

Conclusion:
The appeal was partly allowed. The confiscation of Indian currency was set aside, but the penalty under Section 112 of the Customs Act was upheld.

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