Retracted Statement Can't Be Said To Be Involuntary Without Being Examined By Court: Calcutta High Court

The Calcutta High Court has held that it is the duty cast upon the court to examine the correctness of the validity of the retraction, the point of time at which the retraction was made, whether the retraction was consistent, and whether it was merely a ruse.

The bench of Chief Justice T.S. Sivagnanam and Justice Hiranmay Bhattacharyya has observed that if the tribunal was of the view that the statement recorded under Section 108 of the Act was not admissible on account of the retraction, that by itself cannot render the statement involuntary.

The department has questioned the correctness of the order passed by the Customs Excise and Service Tax Appellate Tribunal, Kolkata, by which the appeal filed by the respondent-assessee along with other connected appeals were allowed. The CESTAT held that the stand taken by the respondent and others was that the gold in question was made out of old jewelry purchased in cash, which fact has not been denied by the revenue for cogent reasons, and therefore the gold is not liable for confiscation. The tribunal held that the department has failed to establish the fact that the cash recovered from the respondent and others are sale proceeds of the smuggled gold, and therefore the cash seized cannot be confiscated and no penalties are imposable.

Before the tribunal, it was contended that the respondent and the other notices have retracted their statements on the ground that they were not voluntary and therefore the statement recorded under Section 108 cannot be relied on.

The tribunal held that the statements recorded during the investigation were retracted by the respondent and the other two co-notices, and they are not admissible in the absence of corroborative evidence. The tribunal held that the currency seized from the respondent and the other two co-notices were not established by the department with corroborative evidence to show that the same were the sale proceeds of smuggled gold.

The department contended that in terms of Section 123, the burden is on the respondent, and having failed to discharge the burden, the adjudicating authority rightly ordered absolute confiscation and imposed a penalty.

The assessee contended that the gold bars were made out of old gold jewelry purchased in cash.

The court noted that the onus is on the respondent and the co-noticees to establish with documents that the gold that was seized was from and out of the old gold jewelry purchased by cash. This aspect of the matter was never established by the respondent-assessee and the co-notices.

The court held that the tribunal has erroneously shifted the burden on the department, stating that the same has not been denied. The question of denial will come only if the onus is discharged by the respondent-assessee and the co-notices as required under Section 123. Thus, without any document placed by the respondent and the co-noticees, the tribunal could not have come to the conclusion that the department did not establish the same by cogent evidence.

Counsel For Appellant: Kaushik Dey

Counsel For Respondent: Joydip Kar

Case Title: Commissioner Of Customs (Preventive) Versus Shri Rajendra Kumar Damani @ Raju Damani

Case No.: CUSTA NO. 16 OF 2023

Click Here To Read The Order