2002 (3) TMI 399 - AT - Central Excise

Seizure - Jurisdiction, authorised officer - Burden of proof - Smuggling - Confiscation of Silver

Issues Involved:
1. Competency of the officer conducting the seizure.
2. Evidence of foreign origin and smuggled nature of the seized silver.
3. Legality of confiscation and imposition of penalty under the Customs Act.

Detailed Analysis:

1. Competency of the Officer Conducting the Seizure:

The appellant contended that the seizure of the silver was not conducted by a competent officer, as per the Board's circular dated 11-6-1990, which specified that such seizures should be made by an officer not below the rank of Assistant Collector of Customs. The appellant relied on the Tribunal's decision in Anil Kumar Jain & Piyush Kumar Jain v. CC, Lucknow, and other cases to support this contention.

However, the Tribunal found this argument to be mis-conceived and misplaced. It noted that this plea was not raised during the initial proceedings or before the adjudicating authority, indicating it was an afterthought. Additionally, the Tribunal clarified that the Board's circular did not specifically debar the Superintendent of Customs from making such seizures. The circular only suggested that such seizures "may be considered" by an Assistant Collector, without excluding other competent officers under the Customs Act. Therefore, the Tribunal held that the Superintendent of Customs acted within his jurisdiction and the seizure was legal.

2. Evidence of Foreign Origin and Smuggled Nature of the Seized Silver:

The appellant argued that there was no evidence to prove that the recovered silver pieces were of foreign origin and smuggled into India. The appellant also contended that the provisions of Section 123 of the Customs Act were not applicable, and thus no presumption regarding the smuggled character of the silver could be drawn.

The Tribunal rejected this contention, noting ample evidence suggesting that the silver pieces were of foreign origin. Out of the 72 pieces, 16 had apparent foreign markings, and the test report from the General Manager, India Government Mint, Mumbai, indicated high purity levels (999.8, 999.1 & 999.3), consistent with foreign origin. The appellant failed to produce any documents at the time of seizure to prove legal possession or acquisition of the silver. The Tribunal found the appellant's subsequent claim of purchase from M/s. M.D. Textile Industries to be an afterthought, supported by manipulated documents.

The Tribunal also applied the principles of Sections 106 and 114 of the Evidence Act, which allow for the presumption of facts within the special knowledge of the appellant. The appellant's inability to provide convincing evidence of lawful acquisition led to the conclusion that the seized silver was smuggled.

3. Legality of Confiscation and Imposition of Penalty under the Customs Act:

The appellant argued that since silver was freely importable under the Open General License (OGL) at the relevant time, the provisions of Section 111(d) for confiscation and Section 112(a) for imposition of penalty were not applicable. However, the Tribunal found that the smuggled nature of the silver was sufficiently established through circumstantial evidence and the appellant's dubious conduct.

The Tribunal upheld the Commissioner's order of confiscation under Section 111(d) and imposition of penalty under Section 112(b) of the Customs Act. However, it modified the order to allow the appellant the option to redeem the confiscated silver on payment of a redemption fine of Rs. 3,00,000/-. If the silver pieces were sold, the redemption fine would be deducted from the sale proceeds before handing them over to the appellant. The personal penalty of Rs. 5,00,000/- imposed by the Commissioner was also maintained.

Conclusion:

The Tribunal dismissed the appeal, upholding the seizure and confiscation of the silver, as well as the imposition of penalties, while providing an option for redemption of the confiscated silver. The Tribunal's decision was based on the competency of the seizing officer, the evidence of foreign origin and smuggled nature of the silver, and the legality of the proceedings under the Customs Act.

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