ORDER
C.N.B. Nair, Member (T)
1. These two appeals are directed against a common order under which silver weighing about 180 kgs. were confiscated and a penalty of Rs. 25,000 imposed on each of the appellants. The facts of the case are that on 24.12.99 the silver in question was seized from a gipsy in which the two appellants were travelling. Shri Shambhu Nath claimed about 96 kgs. of silver and the other claimed the remaining. They are both jewellers.
2. In the adjudication order it has been held that the silver in question had been admitted to be smuggled from Nepal. This finding is made by taking resort to the provisions of section 123 of the Customs Act.
3. The submission of the learned Counsel for the appellant is that the impugned order is contrary to facts on record as well as the instruction contained in Circular No. 394/233/88-Cus (AS) dated 11.6.90 of the Central Board of Excise & Customs. It is the submission of the learned Counsel that the silver was in small pieces (101 pieces weighing about 187 kgs.) and that according to the circular such goods were not to be subjected to proceedings under Section 123 of the Customs Act. He has also pointed out that within a few days of the seizure itself the appellants had produced letter dated 2.1.2000 from the seller of the silver, namely, Adarsh Refinery, Gorakhpur. Learned Counsel has pointed out that the list of the items sold shows that the pieces were of varying weight and purity. Thus, confirming that they are Kachha silver obtained from melting of ornaments and another articles. The contention of the Counsel is that such silver is most unlikely to be smuggled silver. Learned counsel has also referred to the statement dated 25.12.99 of two appellants before the Superintendent of Central Excise that the items were got from brokers and that they cannot say whether it was smuggled silver or silver from other sources.
4. As against the above, learned DR has referred to the findings of the Commissioner that since the total silver was more than 110 kgs. mentioned in the Board Circular and the appellant has confessed that the silver found was smuggled, the order was justified. It has also been pointed out that the silver in question was seized from cavities in a gipsy.
5. I have perused the records and considered the submissions made by both sides. As already noted, the confiscation has been ordered taking resort to Section 123 of the Customs Act, where under the burden of proof is on the possessors of the seized goods and not on the revenue. Circular No. 394/233/88-Cus(AS) of the CBEC laid down the ground rules about invoking the provisions of Section 123. Para 2 of that circular states as under:
“2. In order to prevent the possibility of undue harassment to law abiding persons possessing small quantities of silver bullion of Indian origin, it has been decided that normally the provisions of Section 123 of the Customs Act, 1962 should not be invoked against persons who are found to be in possession of silver bullion of less than 100 kgs. However, if the silver bullion is found to be in the form of bars weighing 30 kgs. (approximately) each which are being smuggled into the country and also where silver bullion is found to bear foreign markings, the question of seizure may be considered even when the quantity is less than 100 kgs. by an officer not lower in rank than that an Assistant Collector of Customs.”
6. In the present case, silver is in small pieces. From the particulars furnished by the seller, it is seen that the purity of the items varied vastly from below 50% to 99%. The nature of the goods as well as the purity are indicative of the fact that the metal in question has been obtained by melting items of diferring purity. Such items are not normally smuggled inasmuch as it is difficult to deal in small pieces of varying purity in a clandestine manner. This is recognized by the circular also. I am, therefore, in agreement with the learned Counsel that no action was called for in the present case. With regard to the statements, it is to be noticed that, while in the first statement, the appellant admitted that the goods were smuggled from Nepal, in the second statement they have stated that they are not sure about the source of the silver. The later statements would appear to be more reliable inasmuch as the goods, as already noted, are of varying purity.
7. In view of what is stated above, I am of the opinion that the confiscation of the goods is not sustainable. The impugned order is accordingly, set aside and the appeals are allowed with consequential relief, if any, to the appellants.