ORDER
S.L. Peeran, Member (J)
1. This appeal arises from Order-in-Appeal Nos. 117 & 118/97, dated 30-9-1997, which is a common Order-in-Appeal against Sri K.R. Ramesh and the present appellant. Sri K.R. Ramesh has already settled the matter under KVSS and has taken the possession of seized silver on payment of redemption fine and penalty as determined under the scheme. The appeal of the appellant alone is to be heard in terms of the impugned order. The appellant was carrying on the business of silver refining. During the course of his trade, he received from his customers silver for the purpose of refining. There is no legislation for the purpose of regulating the activity of silver refining except that they have to take licence under the Act. The appellant had received silver bars from the other accused Sri K.R. Ramesh for the purpose of melting. l00Kgs. of silver in three silver ingots were received by him along with baggage receipt. The appellant satisfied himself on the basis of baggage receipt produced to him about the licit import. He took all necessary care for verifying authenticity before verifying the silver for the purpose of refining. However, the authorities have seized the same on the plea that it is a smuggled one. The appellant pleaded innocence and had submitted that he had taken the silver only for job work and not purchased the same. He also took a plea that he was not committed any offences under Customs Act and he was not in the possession of silver for any illicit activity leading for seizure or imposition of penalty. However, the authorities seized the silver and after verification found that the baggage receipt did not have the details of silver imported by the person, whose name had been mentioned in the receipt. However, the Order-in-Original did not deal with the point of the appellants plea that he was innocent and that he had taken the silver not for the purpose of purchase but have to carry out the refining work on job work basis. The Additional Commissioner merely held that his possession of the silver which was found to be not tallying with the baggage receipt and which leads to a clear decision that of smuggled silver and hence it is liable for penalty. This plea was confirmed by the Commissioner (Appeals).
2. The learned Advocate submits that there is no specific provision of law like the Gold Control Act regulating for carrying out the activity of silver refining. The appellant had to merely satisfied himself about the silver being a licit one. He has acted in a bonafide manner in checking the baggage receipt and received the silver for the work of refining. Therefore, in terms of the Customs Act also burden of smuggling has not been proved and the Department did not discharge its burden. He submits that the plea of innocence ought to have been accepted by the Commissioner. It is his further contention that mere possession of silver cannot lead to the conclusion of the appellant’s connivance in the act of smuggling of silver for the purpose of imposition of penalty under the Customs Act. In this regard, he relied on the judgment of Pradeep Kumar Jain as reported in 1998 (104) E.L.T. 111. In the said judgment, the Tribunal noted that the appellant had purchased the goods from the open market which had foreign marking and the fact that such goods were sold in the open market led to reasonable belief that they were not smuggled goods. Hence, applying the ratio of several other judgments, the Tribunal held that the appellants having purchased the items from the open market did not buy smuggled goods, therefore, confiscation was set aside including the penalty.
3. The learned DR submits that the fact of the appellant being in possession of silver which turned out to be smuggled one is sufficient to impose penalty.
4. On a careful consideration of the submissions, we notice that the admitted fact is the appellant had not brought this silver from any outside country. He was not charged of smuggling activity. He was a petty silver refiner, having a small shop to carry out the activity of silver refining. The appellant satisfied himself about the silver having been imported through the baggage receipt. The customer had contended before him that it is licitly brought silver and had placed into his hands the baggage receipt. At the time of seizure, the baggage receipt was also seized thereby clearly pointing out to the fact that the appellant had verified about the receipt of silver licitly by the customer namely Sri K.R. Ramesh. Therefore, it cannot be held that the appellant was involved in the act of smuggling. The appellant has shown his bonafide by producing the baggage receipt along with silver given for refining. If other person who had been carrying on this activity of silver refining is implicated on the ground that he had smuggled the silver and is an act of punishable under Customs Act and on this ground the appellant is implicated, who had bonafide belief; then it will become difficult for any goldsmith or refiner to carry out the activity of refining or gold making. There is no specific legislation for such persons to maintain any registers. The have to only exercise due caution and care that the gold/silver placed in their hand is not a smuggled one. The appellant has exercised due care inasmuch as calling upon Sri Ramesh to show the licit import, who had placed the baggage receipt. Sri Ramesh also has given the statement of having given to the appellant the baggage receipt. In these facts and circumstances of the case, the appellants plea of innocence and not being involved in the activity of smuggling is sustainable and in terms of the above cited judgment, the appellant is entitled for the benefit of doubt. We, therefore, set aside the order impugned imposing penalty on him.
5. The appeal is allowed, with consequential relief, if any, as per law.