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Issues:
1. Confiscation of silver weighing 180 kgs. 2. Imposition of a penalty of Rs. 25,000/- on each appellant. Confiscation of Silver: The case involved the confiscation of silver weighing 180 kgs. seized from a gipsy in which the appellants were travelling. The adjudication order concluded that the silver was smuggled from Nepal, invoking Section 123 of the Customs Act. The appellants, who were jewellers, argued that the silver pieces were of varying weight and purity, indicating they were obtained from melting ornaments and other articles, not likely to be smuggled silver. They also produced a letter from the seller supporting this claim. The Circular No. 394/233/88-Cus. (AS) of CBEC provided guidelines on invoking Section 123, stating that for silver bullion of less than 100 kgs., the provision should not be invoked unless specific conditions were met. The Tribunal noted that the nature and purity of the silver pieces suggested they were not smuggled, as dealing in small pieces of varying purity clandestinely would be challenging. The appellants' conflicting statements about the source of the silver were considered, with the later statement being deemed more reliable due to the varying purity of the items. Consequently, the Tribunal found the confiscation of the silver unjustified and set aside the impugned order. Imposition of Penalty: The Tribunal's decision to set aside the confiscation of the silver also led to the allowance of the appeals filed by the appellants. The penalty of Rs. 25,000/- imposed on each appellant was associated with the confiscated silver. Since the confiscation itself was deemed unsustainable due to lack of evidence supporting smuggling, the penalty was also overturned. The Tribunal's ruling provided consequential relief to the appellants following the setting aside of the impugned order.
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