Alok Mathur, J. - Heard Sri Kuldeepak Nag, learned counsel for the appellant.

2. The aforesaid appeals being preferred challenging the common impugned judgment and order of the Tribunal dated 22.05.2018 they are being heard together and are being decided by his common judgment.

3. The aforesaid appeals preferred under section 130 of the Customs Act, 1962 (hereinafter referred to as "the Act, 1962") have been filed against common order dated 22nd March, 2018, passed by the Custom, Excise and Service Tax Appellate Tribunal, Allahabad (hereinafter referred to as "the Tribunal") in Appeal No. C/55248 of 2014 -Shakeel Ahmad Khan v. Commissioner Customs, Lucknow along with Appeal Nos. C/55449 of 2014 - Mridul Agarwal v. Commissioner Customs, Lucknow and Appeal No C/55450 of 2014 - Satish Kumar v. Commissioner Customs, Lucknow, whereby confiscation order as well as penalty order has been set aside on the ground that the appellant has not been able to discharge burden of proof as enshrined under Section 123 of the Act, 1962 and further that confiscated Gold has been directed to be redeemable to Shakil Ahmad Khan on payment of duty and redemption fine of Rs. 5,00,000/-.

4. The aforesaid appeals have been preferred on the following substantial questions of law :-

"1. Whether the CESTAT is correct in setting-aside the Order-in-Original No. 07 / Commissioner / LKO / 2013, Dated 05.08.2014, passed by the Commissioner, Customs (Preventive), Lucknow and allowing appeal of the respondent, vide impugned Final Order No. C/A/70944 - 70946/2018 - CU (DB) dated 22.05.2018, contrary to the law laid down by Honble Supreme Court of India in the matter of Commissioner of Customs, Madras v. D. Bhoormull reported in 1983 (13) ELT 1546 (SC) [LQ/SC/1974/133]

2. Whether statement given by instant respondent (Shakil Ahmad Khan) during investigation (at least thrice on 27.11.2013, 20.12.2013 and again on 13.01.2014), that the seized gold was given to him by Shri Satish Kumar and Mridul Agarwal for delivering Lucknow, can be used against noticee for fixing liability, even is retracted subsequently in his defense reply dated 11.06.2014"

5. Brief facts giving rise to these appeals are that on 27.11.2013, a team of Customs (Preventive) Officers of Lucknow Commissionerate intercepted the appellant - Shakil Ahmad Khan (respondent in Customs Appeal No. 3 of 2018) when he was travelling by UPSRTC Bus No. UP33T9412 on Barabanki - Bahraich Road near Ram Nagar Railway Crossing.

6. Statement of Shakil Ahmad Khan was recorded on 27.11.2013 at Customs Commissionerate, Lucknow wherein he stated that he has been doing business of making gold and silver ornaments for the last 20 years, the gold carried by him has been handed over to him by Mridul Agarwal of Bahraich (about 01 Kg) and Satish Kumar of Bahraich (about 700gms), the gold had been handed over to him at his shop at about 11.00AM in Bahraich, he does not know the name and address of the person to whom the goods were to be delivered, the said foreign origin gold has been smuggled into India through Nepal by Mridul Agarwal and Satish Kumar which had been handed over to him for delivery at Lucknow and for the purpose he had received Rs. 1200/- as remuneration.

7. The seized foreign origin gold has been illegally imported from Nepal into India, in contravention of Section 111 of the Act, 1962 and Notification No. 9/96 dated 22.01.1996 issued there under, was liable to confiscation under Section 11 of the Act, 1962 which was seized under Section 110 of the Act, 1962.

8. The statement of Krishan Kumar Agarwal father of Mridul Agarwal was recorded on 28.11.2013, wherein he stated that he owned a firm in the name of M/s Krishan Kumar Sarraf and Mridul Agarwal looks after the said shop and was in Lucknow for some work on that day, he had prior information of recovery of gold from the possession of Shakil Ahmad Khan and as per his knowledge the said gold was given to Shakil Ahmad Khan by his son Mridul Agarwal and could only tell about the documents pertaining to purchase of said gold and he had not imported the gold from foreign country and used to purchase the same from local and outstation shopkeepers only.

9. Satish Kumar in his statement recorded on 28.11.2013, denied ownership of the seized foreign origin gold and stated that he knows Shakil Ahmad Khan as an artisan of jewellery, he was in the business of gold and silver ornaments but he was not engaged in procuring foreign origin gold.

10. Mridul Agarwal has expressed his ignorance about the gold recovered from Shakil Ahmad Khan. His statement was recorded on 05.12.2013, in which he has stated that he knew Shakil Ahmad Khan as artisan of jewellery and he used to make jewellery and do repair works for him except to that he had no relation with him. He had not handed over any gold to Shakil Ahmad Khan and had no connection with the seized foreign original gold. Shakil Ahmad Khan had falsely named him as he was not engaged any in any illegal work of smuggling. He further asserted that he had given some jewellery to Shakil Ahmad Khan few days back for repairing but he was not returning the same for which he had scolded him badly and probably for that reason in anger Shakil Ahmad Khan had implicated him in the case.

11. According to the records, summons under Section 108 of the Act, 1962 were issued on 27.11.2013 to Shakil Ahmad Khan, in compliance of which his statement was recorded, wherein he reiterated earlier version. Shakil Ahmad was subsequently arrested under Section 104 of the Act, 1962 on 27.11.2013 and was produced before the Chief Judicial Magistrate (EF), Lucknow on 28.11.2013 for obtaining judicial custody.

12. That search of residential premises of Shakeel Ahmad Khan was carried out on 28.11.2013 but nothing objectionable was recovered. It is also evident from the record that summons were issued to Satish Kumar on 09.12.2013 for his presence on 13.12.2013 and his statement was recorded on the same date. He clearly retracted from his earlier statement and asserted that he had not given or handed over any such item to Shakil Ahmad Khan and that he had no connection with the aforesaid ceased foreign original gold. Summons were also issued to Krishna Kumar, who in his statement stated that he had suffered paralysis in past and on seeing officers and the Police, he got nervous and might have told like that and further stated that he in his full consciousness stated the truth that neither he nor Mridul Agarwal had anything to do with the seized gold nor did he talk to Shakil Ahmad Khan on 27.11.2013. Summons were also issued to Mridul Agarwal and Mohd. Daud, the Muneem on 03.12.2013, requiring their presence on 05.12.2013 and 06.12.2013, respectively for tendering their statements under Section 108 of the Act, 1962. Mridul Agarwal in his statement stated that he had no connection with the aforesaid seized foreign original gold and that he was entirely unaware with the case and was innocent. He further stated that neither he was engaged in any kind of illegal work or smuggling nor was he concerned with the smuggling of the seized foreign origin gold. He further stated that he had given some jewellery to Shakil Ahmad Khan few days back for repairing but Shakil was not returning the same and he had scolded him badly for that three four days back and probably for that reason due to anger Shakil had involved/implicated his name in the case.

13. Considering the aforesaid facts, the Commissioner Customs (P), Lucknow passed the confiscation order dated 05.04.2014, solely on the basis of confessional statement of Shakil Ahmad Khan, Mridul Agarwal and Satish Kumar Agarwal. He has further relied upon the judgment of Honble Supreme Court in the case of Commissioner of Central Excise Madras v. Systems and Components (P) Ltd., 2004 (165) ELT 136 (SC), wherein it was held that what is admitted need not to be proved.

14. The Commissioner has further recorded that he did not find any evidence of forcible coercive action while recording statements under Section 108 of the Act, 1962. At this point of time, it is also admitted that independent witnesses before whom the said statement was recorded were never examined by any of the authorities nor was their statement recorded which could prove that confessional statements were recorded out of free will and without any coercion.

15. The Tribunal in paragraph 19 of its judgment has observed as under :

"19. Having considered the rival contentions and after going through the record, we find that Gold is not a prohibited item and can be imported upon payment of duty. Further, it is a case of town seizer and the customs officers have seized the Gold on the suspicion of smuggling, without there being any actual evidence of smuggling. We find that the whole case of revenue is based on the retracted statement(s) of appellant S.A. Khan and father of the other appellant Shri Mridul Agarwal. We further find that these persons are not examined in the adjudication proceedings and as such their statements are not admissible, as evidence under the provisions of section 138B of Customs Act, which provides that - if an authority in any proceedings under the wants to rely upon the statement of any person (made during enquiry), such person is required to be examined as witness and if the adjudicating authority finds the evidence of the witness admissible, then such witness should be offered for cross examination and only thereafter the evidence is admissible. In absence of compliance with the provision of Section 138B of the Act, the statements are not admissible as evidence and accordingly, the case of revenue against the appellants namely Shri Mridul Agarwal and Shri Satish Kumar have categorically denied their connection with the seized Gold and in absence of any corroborative evidence the imposition of penalty on them is bad and fit to be set aside."

16. In light of the aforesaid facts, we have been called upon to determine whether the substantial question of law as formulated by the appellants deserves admission and further consideration. With regard to the first substantial question of law raised by the appellant they have stated that judgment and order of the CESTAT has been decided contrary to the law laid down by the Honble Supreme Court in the case of Commissioner of Customs, Madras v. D. Bhoormull reported in 1983 (13) ELT 1546 (SC) [LQ/SC/1974/133] .

17. In the case of Collector of Customs, Madras and Ors. v. D. Bhoormall the para 33 is quoted herein below:-

"33. Smuggling is clandestine conveying of goods to avoid legal duties. Secrecy and stealth being its covering guards, it is impossible for the Preventive Department to unravel every link of the process. Many facts relating to this illicit business remain in the special or peculiar knowledge of the person concerned in it.

On the principle underlying. 106, Evidence Act, the burden to establish those facts is cast on, the person concerned; and if he fails to establish or explain those facts, an adverse inference of facts may arise against him, which coupled with the presumptive evidence adduced by the prosecution or: the Department would rebut the initial presumption of innocence in favour of that person, and in the result prove him guilty. As pointed out by Best in Law of Evidence, (12th Edn. Article 320, page 291), the ".Presumption of innocence is, no doubt, presumption juris; but every days practice shows that it may be successfully encountered by the presumption of guilt arising from the recent (unexplained) possession of stolen property", though the latter is only a presumption of fact-Thus the burden on the prosecution or the Department may be considerably lightened even by such presumption of fact arising in their favour.

However, this does not mean that the special or peculiar knowledge of the person proceeded against will relieve the prosecution or the Department altogether of the burden of producing some evidence in respect of that fact in issue. It will only alleviate that burden to discharge which very slight evidence may suffice."

18. In the present case entire prosecution is based on the confessional statement given by Shakil Ahmad Khan before the Customs Officers under section 108 of the Customs Act 1962. Shakil Ahmad Khan subsequently retracted his statement and denied his involvement in movement and/or smuggling of said gold. He further stated that on 27.11.2013 he was going to Lucknow for the treatment of his wife Mrs. Tajni Begum. At Ramnagar Railway Crossing, the Customs Officers checked the bus and asked every passenger about a black packet. The officers asked about his profession, when he told that he is a gold artisan, the Officer dragged him, alleging that the gold belongs to him.

19. We have perused the record from which it is evident that there is no other material for imposition of the penalty apart from confessional statement of Shakil Ahmad Khan.

20. Facts in the case of Collector of Customs Madras v. D. Bhoormull reported at 1983 (13) ELT 1546 (SC) [LQ/SC/1974/133] are distinguishable and would not be applicable in the facts of the present case as there was no other evidence produced by the Customs department against the respondents except their confessional statement which could assist them in linking the respondents to the offence of smuggling.

21. In the case of Noor Aga v. State of Punjab and another (2008) 16 SCC 417 [LQ/SC/2008/1384] , the Honble Supreme Court has delved in detail about the weightage to be given to a confessional statement which has been retracted subsequently. The Honble Supreme Court has held that a retracted confessional statement may be relied upon but a rider must be attached thereto, namely, if it has been made voluntarily. The burden of proving that such a confession was made voluntarily would, thus, be on the prosecution.

22. In the present case the order passed under section 111 and 112 of the Customs Act by the Commissioner Customs (P), Lucknow on 05.08.2014 and the said order records the entire proceedings conducted during the investigation. A perusal of the aforesaid order would indicate that no efforts were made by the appellants to prove that the confessional statements were made voluntarily. No Customs Officer or any independent witness was examined by the said authority which could prove that the said confessional statement was taken voluntarily and could be used as a substantial piece of evidence against the respondents.

23. That the authorities below had totally relied on the confessional statement for passing the impugned order against the respondents and it is to be examined as to whether in absence of any other evidence it was reasonable or prudent for holding the respondents guilty for the offence under Section 111 & 112 of the Customs Act.

24. In the case of Surinder Kumar Khanna v. Intelligence Officer Directorate of Revenue Intelligence 2018 (8) SCC 271 [LQ/SC/2018/923] . paragraph 11 and 12 is reproduced herein under:-

"11. in Kashmira Singh v. State of Madhya Pradesh ; (1952) SCR 526 [LQ/SC/1952/15] , this Court relied upon the decision of the Privy Council in Bhuboni Sahu v. The King : (1949) 76 Indian Appeal 147 at 155 and laid down as under:

"Gurubachans confession has played an important part in implicating the appellant, and the question at once arises, how far and in what way the confession of an accused person can be used against a co-accused It is evident that it is not evidence in the ordinary sense of the term because, as the Privy Council say in Bhuboni Sahu v. The King. "It does not indeed come within the definition of" evidence contained in section 3 of the Evidence Act., It is not required to be given on oath, nor in the presence of the accused, and it cannot be tested by crossexamination." Their Lordships also point out that it is "obviously evidence of a very weak type......... It is a much weaker type of evidence than the evidence of an approver, which is not subject to any of those infirmities."

They stated in addition that such a confession cannot be made tile foundation of a conviction and can only be used in "support of other evidence." In view of these remarks it would be pointless to cover the same ground, but we feel it is necessary to expound this further as misapprehension still exists. The question is, in what way can it be used in support of other evidence Can it be used to fill in missing gaps Can it be used to corroborate an accomplice or, as in the present case, a witness who, though not an accomplice, is placed in the same category regarding credibility because the judge refuses to believe him except in so far as he is corroborated .

12. The law laid down in Kashmira Singh (supra) was approved by a Constitution Bench of this Court in Hari Charan Kurmi and Jogia Hajam v. State of Bihar : (1964) 6 SCR 623 [LQ/SC/1964/27 ;] ">(1964) 6 SCR 623 [LQ/SC/1964/27 ;] [LQ/SC/1964/27 ;] at 631-633 wherein it was observed:

"As we have already indicated, this question has been considered on several occasions by judicial decisions and it has been consistently held that a confession cannot be treated as evidence which is substantive evidence against a co-accused person. In dealing with a criminal case where the prosecution relies upon the confession of one accused person against another accused person, the proper approach to adopt is to consider the other evidence against such an accused person, and if the said evidence appears to be satisfactory and the court is inclined to hold that the said evidence may sustain the charge framed against the said accused person, the court turns to the confession with a view to assure itself that the conclusion which it is inclined to draw from the other evidence is right. As was observed by Sir Lawrence Jenkins in Emperor v. Lalit Mohan Chuckerburty a confession can only be used to "lend assurance to other evidence against a coaccused". In re Periyaswami Moopan Reilly. J., observed that the provision of Section 30 goes not further than this: "where there is evidence against the coaccused sufficient, if believed, to support his conviction, then the kind of confession described in Section 30 may be thrown into the scale as an additional reason for believing that evidence". In Bhuboni Sahu v. King the Privy Council has expressed the same view. Sir John Beaumont who spoke for the Board, observed that "a confession of a co-accused is obviously evidence of a very weak type. It does not indeed come within the definition of "evidence" contained in Section 3 of the Evidence Act. It is not required to be given on oath, nor in the presence of the accused, and it cannot be tested by cross-examination. It is a much weaker type of evidence than the evidence of an approver, which is not subject to any of those infirmities. Section 30, however, provides that the court may take the confession into consideration and thereby, no doubt, makes it evidence on which the court may act; but the section does not say that the confession is to amount to proof. Clearly there must be other evidence. The confession is only one element in the consideration of all the facts proved the case; it can be put into the scale and weighed with the other evidence". It would be noticed that as a result of the provisions contained in Section 30, the confession has no doubt to be regarded as amounting to evidence in a general way, because whatever is considered by the court is evidence; circumstances which are considered by the court as well as probabilities do amount to evidence in that generic sense. Thus, though confession may be regarded as evidence in that generic sense because of the provisions of Section 30, the fact remains that it is not evidence as defined by Section 3 of the. The result, therefore, is that in dealing with a case against an accused person, the court cannot start with the confession of a co-accused person; it must begin with other evidence adduced by the prosecution and after it has formed its opinion with regard to the quality and effect of the said evidence, then it is permissible to turn to the confession in order to receive assurance to the conclusion of guilt which the judicial mind is about to reach on the said other evidence. That, briefly stated, is the effect of the provisions contained in Section 30. The same view has been expressed by this Court in Kashmira Singh v. State of Madhya Pradesh where the decision of the Privy Council in Bhuboni Sahu case has been cited with approval."

25. By the law laid down above it is clear that a confessional statement of a co-accused cannot by itself be taken as a substantive piece of evidence against another co-accused and can at best be used or utilized in order to lend assurance to the Court. In the absence of any substantive evidence it would be inappropriate to base the conviction of the appellant purely on the statements of co-accused.

26. In the present case the CESTAT has rightly concluded that a confiscation and penalty order was passed solely on the retracted statement of the appellant Mr. Shakil Ahmad Khan and father of the appellant Mr. Mridul Agarwal and further these persons were not examined in the adjudication proceedings and therefore, the confiscation, penalty order has been passed only on the basis of such confessional statement is contrary to settled legal position and was clearly illegal, arbitrary and liable to be set-aside, and the judgment of CESTAT is affirmed to that effect. In the present appeal we have given our anxious consideration to the substantial questions formulated by the petitioner and are of the considered opinion that no substantial question of law arises for determination of this Court in as much as the questions raised by appellant have already been conclusively decided by the Honble Supreme Court.

27. We do not find any infirmity with the order of the CESTAT dated 22.05.2018 and no substantial question of law raises in these appeals which are hereby dismissed.