2020 (5) TMI 9 - AT - Customs

Tribunal Upholds Seizure of Silver Granules Under Customs Act

Gaurav Agarwal, Proprietor M/s. Gurav Payal Bhandar Versus Commissioner of Customs

Gaurav Agarwal, Proprietor M/s. Gurav Payal Bhandar Versus Commissioner of Customs - 2020 (372) E.L.T. 724 (Tri. - Chennai) Issues Involved:1. Legality of the seizure of 60 kgs. of silver granules.2. Applicability of Section 123 of the Customs Act, 1962.3. Validity of the confiscation and penalty imposed.4. Relevance of the Board Circular dated 11.06.1990.Issue-wise Detailed Analysis:1. Legality of the Seizure of 60 kgs. of Silver Granules:The Customs Preventive Unit intercepted an auto carrying parcels containing 101.36 kgs. of silver, including 60 kgs. of silver granules intended for Mahendran. The appellant, Gaurav Agarwal, claimed ownership, stating the silver was sent for making leg chains. Despite providing documents and statements, the department suspected the silver was smuggled due to its foreign origin markings and lack of duty payment proof. The seizure was based on the suspicion that the silver granules were of foreign origin, marked 'Made in Korea' with lot numbers, and no supporting import documents were provided.2. Applicability of Section 123 of the Customs Act, 1962:The appellant argued that Section 123, which shifts the burden of proving the legality of the goods onto the possessor, should not apply as per the Board Circular dated 11.06.1990. This circular states that Section 123 should not be invoked for silver bullion less than 100 kgs. unless it is in the form of bars weighing 30 kgs. each or bears foreign markings. The appellant contended that the seized silver was in the form of granules, not bars, and did not bear foreign markings, thus Section 123 should not apply.3. Validity of the Confiscation and Penalty Imposed:The original authority and the Commissioner (Appeals) upheld the confiscation and imposed a penalty of Rs. 5 lakhs under Section 112(a) of the Customs Act, 1962. They concluded that the markings on the cartons indicated foreign origin, and the appellant failed to prove legal import or duty payment. The Tribunal noted that the appellant's claim of purchasing the cartons from a roadside shop was implausible, given the precise markings and quantities matching the contents. The Tribunal found that the appellant did not provide sufficient evidence to rebut the presumption of smuggling under Section 123.4. Relevance of the Board Circular dated 11.06.1990:The appellant relied on the Board Circular to argue that the seizure was against the guidelines, as the quantity was less than 100 kgs. and not in the form of 30 kgs. bars with foreign markings. The Tribunal, however, interpreted the circular to include silver granules within the definition of bullion, as the markings on the cartons indicated foreign origin. The Tribunal held that the circular did not apply because the silver granules were found in cartons with foreign markings, shifting the burden of proof to the appellant, which he failed to discharge.Conclusion:The Tribunal dismissed the appeal, upholding the confiscation and penalty. It concluded that the appellant did not establish the silver's legal importation and duty payment, and the foreign markings on the cartons justified the seizure under Section 123 of the Customs Act, 1962. The Board Circular did not protect the appellant, as the silver granules fell within its scope due to the foreign markings on the packaging.