CESTAT: Voluntary Confession Validates Smuggled Goods Seizure

In a key judgment, the New Delhi Bench of CESTAT (Customs, Excise, and Service Tax Appellate Tribunal) upheld the confiscation of foreign-origin cigarettes and a ₹25 lakh penalty, ruling that cross-examination was unnecessary as the taxpayer had voluntarily admitted to the offence.

Seizure Based on Specific Intelligence

The case pertains to Hira Singh, proprietor of Star Express Enterprises, a transport company in Delhi. Acting on intelligence, DRI officers intercepted a mini truck outside Singh’s godown on December 21, 2018. While the truck was declared to be carrying metal planters, a detailed inspection led to the seizure of 21.6 lakh sticks of foreign-origin cigarettes from the vehicle, and another 3.41 lakh sticks from the godown. Additional goods were recovered from Singh’s residence.

Notably, no valid import or transport documents were produced.

Confession Under Section 108 of Customs Act

During the investigation, statements were recorded under Section 108 of the Customs Act, 1962. A voluntary statement from the appellant’s counsel confirmed that:

• The goods were received from one Hamid Bhai
• Singh distributed them on instructions from another associate
• Payments were routed via informal hawala channels
• He was fully aware the cigarettes were smuggled

Adjudication and Appeal

A Show Cause Notice was issued, leading to the confiscation of the goods under Section 111(d) and imposition of a ₹25 lakh penalty under Section 112(b)(i). The order was upheld by the Commissioner (Appeals).

Challenging the decision, the appellant approached CESTAT, arguing:

• The panchnama (seizure report) was defective
• His confession was coerced
• The denial of cross-examination violated natural justice

CESTAT’s Observations and Final Order

Judicial Member Binu Tamta held that:

• The confession was voluntary and consistent
• As cigarettes are notified goods under Section 123, the burden of proof lies on the accused, who failed to produce documents
• Cross-examination was not essential due to the clear admission of guilt

The tribunal dismissed the appeal and upheld the confiscation and penalty.

Key Takeaways

• Voluntary confessions under Section 108 can be used as standalone evidence.
• For notified goods, the burden lies on the accused to prove legality.
• Minor procedural lapses won’t invalidate strong, self-incriminating evidence.
• Denial of cross-examination is acceptable if no prejudice is caused.

FAQs

Q. Can a confession be enough to confirm smuggling charges?
Yes, if voluntary and consistent, it can form the sole basis for penal action.

Q. What does Section 123 mean in customs law?
It places the burden of proving legal import on the person possessing notified goods.

Q. Is cross-examination always required?
No, not if there’s sufficient voluntary evidence and no unfairness is proven.

Conclusion

This ruling reinforces the seriousness of customs law and the legal weight of voluntary confessions. It sends a strong message to transporters and traders to stay compliant and avoid illegal trade activities, as such offences lead to strict penalties and confiscation without the need for prolonged cross-examinations.

📅 Published on: 29 June 2025
✍️ Author: CS Chhavi Goyal