2008 (9) TMI 922 - HC - Customs

Summary

Issues involved: Seizure of silver bars by Customs Authority, confiscation and penalty imposed, appeal process, Tribunal's decision, application under Section 130A of the Customs Act, questions of law referred to High Court.

Summary:

1. The case involved the seizure of silver bars by the Customs Authority from a passenger bus, leading to confiscation and imposition of a penalty on the respondent, Harendra Prasad. The Tribunal set aside the confiscation order citing lack of evidence proving the silver was of foreign origin.

2. A show cause notice was issued to Harendra Prasad, who claimed the seized silver was part of his business stock as a silversmith. Despite his explanation, the Deputy Commissioner confiscated the silver and imposed a personal penalty, which was upheld by the Commissioner (Appeals).

3. The Tribunal overturned the previous decisions, stating that the Revenue failed to prove the silver's foreign origin as required by Section 123 of the Customs Act. It also noted the retracted statement of a witness, Ram Lochan Sah, without corroboration.

4. The Commissioner of Customs filed an application under Section 130A of the Customs Act challenging the Tribunal's decision. The High Court directed the Tribunal to refer questions of law for determination.

5. The petitioner argued that Ram Lochan Sah's confessional statement should be considered as evidence under Section 108 of the Act, indicating the silver was smuggled.

6. The respondent contended that the silver's characteristics and lack of foreign origin markings, along with inconsistencies in Sah's statement, justified the Tribunal's decision to not rely on the confession.

7. The High Court affirmed the Tribunal's decision, stating that the Tribunal was justified in ignoring Sah's statement as it lacked credibility regarding the silver's origin.

8. The Court concluded that the Tribunal's findings were based on relevant material and not vitiated by any legal errors.

9. Therefore, the High Court answered the questions in favor of the respondent, holding that the Tribunal's decision was lawful and properly assessed the evidence.

10. The reference was answered accordingly, and the tax case was disposed of.