2000 (1) TMI 430 - AT - Customs

Summary

Issues:
1. Absolute confiscation of gold and silver bars under Customs Act and Foreign Trade Act.
2. Challenge to the absolute confiscation of silver bars.
3. Burden of proof for seized silver being of foreign origin.
4. Compliance with Section 11C of the Customs Act.
5. Imposition of penalty and redemption fine.

Analysis:

Absolute Confiscation of Gold and Silver Bars:
The appeal stemmed from an order for the absolute confiscation of 35 gold biscuits and 111 silver bars of foreign origins under the Customs Act and the Foreign Trade Act. A penalty was also imposed on the appellant. The appellant did not contest the confiscation of gold bars but challenged the confiscation of silver bars, arguing for their release based on notification and lack of evidence supporting their foreign origin.

Challenge to Absolute Confiscation of Silver Bars:
The appellant contended that the seized silver was not of foreign origin and lacked reasonable belief for being smuggled. The appellant maintained that the silver was purchased from an Indian businessman for legitimate business purposes and should be redeemable upon payment of a fine. The appellant argued that the burden of proof for smuggled goods was not met by the Revenue.

Burden of Proof for Seized Silver Being of Foreign Origin:
The appellant emphasized the lack of foreign markings on the silver bars and the absence of evidence supporting their foreign origin. The Commissioner's presumption that the silver was manufactured abroad was deemed presumptive, and the benefit of doubt was granted to the appellant regarding the silver's foreign origin. The Tribunal highlighted the necessity of proper notification under Section 11C and the requirement for redemption fine for notified goods.

Compliance with Section 11C of the Customs Act:
The Tribunal emphasized the importance of compliance with Section 11C, requiring notification of possession of notified goods. The failure to notify the possession of the silver bars justified their confiscation, albeit with the opportunity for redemption upon payment of a fine.

Imposition of Penalty and Redemption Fine:
The penalty imposed was consolidated for both gold and silver items and needed re-adjudication. The pre-deposit amount by the appellant was to remain with the department until re-adjudication. The Tribunal directed the Commissioner not to dispose of the silver pending re-adjudication and set a four-month timeline for the case's resolution.

In conclusion, the Tribunal upheld the absolute confiscation of gold bars but remanded the case for re-consideration of the seized silver bars, emphasizing compliance with notification requirements and the opportunity for redemption upon payment of a fine. The penalty imposed was subject to re-adjudication, and the appellant's pre-deposit was to remain with the department until the case's resolution.