2009 (5) TMI 182 - AT - Customs

Absolute confiscation of 30.175 Kgs. of silver seized from the appellant - appellant is correct in his submission that since the confiscated silver was less than 100 Kgs. and was in the form of bars not weighing more than 30 Kgs. each, the seizure itself should not have taken place, in the light of CBEC Circular F.No. 394/233/88-CUS (AS) dated 11-6-1990 - we set aside the confiscation and penalty and allow the appeal

Summary

Issues:
1. Confiscation of silver by the Commissioner (Appeals) upheld.
2. Penalty imposed by the adjudicating authority upheld.
3. Interpretation of CBEC Circular regarding seizure of silver bullion.
4. Applicability of the CBEC Circular on the case.
5. Decision on the confiscation and penalty.

Analysis:
1. The judgment dealt with the appeal against the confiscation of 30.175 Kgs. of silver and the penalty of Rs. 10,000 imposed on the appellant by the adjudicating authority, which was upheld by the Commissioner (Appeals). The Tribunal heard arguments from both sides, where the appellant's counsel contended that the seizure should not have occurred as per a CBEC Circular dated 11-6-1990, which exempted silver bullion of less than 100 Kgs. in specific circumstances.

2. The Tribunal acknowledged the counsel's argument, citing the CBEC Circular that shifted the burden of proving whether seized silver was smuggled to the person from whom it was seized. The Circular specified that seizure of silver bullion weighing less than 100 Kgs. should not be pursued unless certain conditions, such as the silver being in the form of bars weighing approximately 30 Kgs. each and bearing foreign markings, were met. The Tribunal noted that the confiscated silver in this case fell within the exempted category based on the Circular's provisions.

3. Therefore, without delving into the appellant's explanation for possessing 30.157 Kgs. of silver, the Tribunal applied the Circular's criteria and set aside both the confiscation and the penalty imposed. The decision was made in line with the Circular's intent to prevent undue harassment of individuals possessing small quantities of silver bullion of Indian origin and to address smuggling concerns effectively.

4. The judgment concluded by allowing the appeal, overturning the confiscation and penalty upheld by the lower authorities. The Tribunal's decision was based on the interpretation and application of the CBEC Circular, emphasizing the importance of adhering to the Circular's guidelines in cases involving the seizure of silver bullion to ensure fair treatment and compliance with relevant customs regulations.

Note: The judgment was delivered by Ms. Jyoti Balasundaram, Vice-President of the Appellate Tribunal CESTAT, Chennai.