2008 (12) TMI 180 - HC - Customs

Smuggling of Silver Exemption from seizure - Circular No. 394/233/88-Cus. (AS) of the CBES Held that - appears from the Circular that up to 100 kgs. of silver was exempted from the seizure. 30 kgs. of silver having foreign mark was having the exemption. In the instant case, silver was in small pieces. From the particulars furnished by the seller, the purity of silver was varied from 50% to 99%. The total silver seized was 187.475 kgs. If by giving the benefit of 100 kgs. to each person or impurity, the total silver will fall under the exemption limit as per the Circular

Summary

Issues:
Customs Act, 1962 - Appeal against CESTAT order - Smuggling of silver - Confiscation and penalty - Interpretation of Circular on silver seizure exemptions - Failure to examine crucial witnesses - Justification of Tribunal's order.

Analysis:
The case involves an appeal filed by the Department under Section 130 of the Customs Act, 1962 against a CESTAT order regarding the interception of a vehicle carrying silver of foreign origin. The Preventive Officer intercepted a Maruti Gypsy on specific information and recovered 101 slabs of raw silver from secret cavities in the vehicle. The respondents admitted to having the silver and were penalized by the Commissioner. The Tribunal allowed the appeal, leading to the Department's present appeal.

The appellant argued that there was specific information about silver smuggling and highlighted the respondents' statements admitting to purchasing silver from brokers. They emphasized the foreign origin markings on some silver slabs and justified the Commissioner's order. On the other hand, the respondents relied on the Tribunal's order, pointing out varying weights and purity levels of the silver pieces. They also referenced a circular exempting silver seizures up to 100 kgs and argued against the need for smuggling due to price differences between Nepal and India.

The High Court analyzed the case, noting the exemption limit under the circular and the varied purity of the seized silver. They highlighted the lack of examination of crucial witnesses like M/s. Adarsh Refinery and the Gypsy owner by the Department. The Court found no infirmity in the Tribunal's order, citing the failure to meet the ends of justice by not examining key witnesses. Consequently, the Court upheld the Tribunal's order, dismissing the Department's appeal for lack of merit and without costs.