Unreliable panchnama and inconsistent witness evidence failed to prove gold recovery, defeating Customs and Gold Control penalties.

Reliability of a panchnama and witness evidence is critical where confiscatory penalties depend on proof of recovery. Here, the evidence did not establish that gold biscuits were intercepted from the appellant in the basement parking area or recovered from his person and briefcase, because the panch witnesses and departmental officers gave inconsistent accounts and the investigating officer had not personally seen the alleged movement to the parking lot. The panchnama was therefore treated as unreliable. Once the recovery itself was not proved, the appellant's retracted statements could not be safely relied on, and the penalties under the Customs Act and the Gold (Control) Act could not stand.

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Issues: Whether the recovery of gold biscuits from the appellant's person and briefcase was proved on the basis of the panchnama and witness evidence, and whether the penalties imposed under the Customs Act and the Gold (Control) Act could be sustained.

Analysis: The evidence of the panch witnesses and departmental officers did not establish that the appellant was intercepted in the basement parking lot as alleged or that the gold biscuits were recovered there from his person and briefcase. One panch witness did not go to the parking lot, another stated that the packets were opened only in the hotel room, and the investigating officer admitted that he had not personally seen the appellant moving to the parking area. The panchnama was therefore found to be unreliable and suspect. Once the alleged recovery itself was not proved, the statements recorded from the appellant, which were also retracted, could not be safely relied upon.

Conclusion: The alleged recovery was not proved, and the penalties imposed on the appellant under the Customs Act and the Gold (Control) Act could not stand.

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