2004 (11) TMI 117 - SC - Central Excise

Whether the assessee has been able to prove that the articles were not smuggled goods and he had come to possession of the articles before the notified date? Held that - Several materials were considered by the CEGAT to hold that the assessee had discharged its burden. It referred to the orders passed by the authorities under the Treasure Act. The WTO came to a definite conclusion that the assessee had proved that it had possessed the articles prior to the notified date. These essentially are conclusions on facts. A question of law can arises if the forum deciding the case acts on irrelevant materials, or, partly on relevant materials and partly on irrelevant materials or keeps out of consideration on relevant material. In the second category of case the question arises because it is not known as to what extent irrelevant materials have influenced the conclusion. If a finding of fact is arrived at by the Tribunal after improperly rejecting evidence a question of law arises. If findings of fact are based on some evidence sufficiency thereof does not give rise to a question of law. In the instant case the conclusions arrived at by CEGAT are with reference to documents, and materials and they cannot be said to be perverse or without basis. It is not a case where CEGAT has based its conclusions on any irrelevant material or has kept out of consideration any relevant material. That being so, the High Court was justified in holding that no question of law arises out of the order of the CEGAT. Appeal dismissed.

Summary

Issues:
1. Legality of judgment passed by Rajasthan High Court under Section 130 of the Customs Act, 1962.
2. Whether silver bars with foreign markings were smuggled goods in view of Notification No. 12(11) F 1/48, dated 25th August, 1948.
3. Application of Section 123 of the Customs Act in proving goods are not smuggled.
4. Whether the assessee proved possession of articles before the notified date.

Analysis:
1. The Commissioner of Central Excise challenged the Rajasthan High Court's judgment under Section 130 of the Customs Act, questioning the legality of proceedings against the assessee. The Tribunal held the proceedings were without legal sanction, leading to the High Court finding the questions posed were based on factual findings, not questions of law.

2. The central issue revolved around whether 85 silver bars with foreign markings were smuggled goods under Notification No. 12(11) F 1/48, dated 25th August, 1948. Controversy arose regarding the possession timeline of the articles, with different authorities reaching conflicting conclusions. The Collector considered the articles antique, while the Board of Revenue found they were hidden decades before discovery.

3. Section 123 of the Act places the burden on the assessee to prove goods are not smuggled. However, as silver bullion was not a notified item before 1984, the Act's role was limited. The CEGAT concluded the assessee had discharged the burden by proving possession before the notified date, based on various materials and orders under the Treasure Act.

4. The CEGAT's conclusions were supported by documents and materials, not deemed perverse or without basis. The High Court correctly held that no question of law arose from the CEGAT's order, as the findings were based on relevant evidence. Consequently, the appeals were dismissed as no legal issues were identified, affirming the Tribunal's decision.