Prima facie evidence and unconditional stay in alleged cargo diversion matter turned on retracted statements and hearsay.

Retracted statements, unsupported hearsay and general allegations of syndicate involvement were treated as insufficient to show a prima facie case against the appellants in relation to alleged diversion of Nepal-bound cargo. Cross-examination suggested a co-appellant's name had been introduced at the department's instance, and a later Commissioner's order finding no sufficient evidence against two appellants reinforced that assessment. On that evidentiary basis, the penalties and confiscation order did not justify denial of unconditional stay, and the stay petition was allowed unconditionally.

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Issues: Whether the penalties and confiscation order disclosed a sufficient prima facie case against the appellants for the grant of unconditional stay.

Analysis: The material relied upon consisted principally of statements of the persons involved, each implicating the others. Those statements had been retracted, the cross-examination of one appellant indicated that a co-appellant's name was taken at the instance of the department, and the remaining material was treated as hearsay and as generalised assertions of syndicate involvement rather than direct proof. On that basis, the evidence was not regarded as legal evidence establishing involvement in the alleged diversion of Nepal-bound cargo. The subsequent order of the Commissioner in the same factual setting, holding that there was not sufficient evidence against two of the appellants, was also taken into account.

Outcome: A prima facie case for unconditional stay was found, and the stay petition was allowed unconditionally.

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