AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
1988 (1) TMI 240
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....r rods, old silver coins, totally weighing 20.956 kgs valued at Rs. 37,270/-. The statement of Shri Kadarbhai was recorded. He stated inter alia that silver rods and coins belonged to M/s. Ambica Jewellers and he was carrying them to his refinery for melting. He did not possess any transport voucher or bill. The Customs Officers had also seized the bicycle on the reasonable belief that the same was used for transport and carriage of silver liable to confiscation. The premises of Shri Kadarbhai was searched and nothing incriminating was found. During the course of further investigation the premises of M/s. Ambica Jewellers were also searched, which resulted in the recovery of raw silver rods, old silver coins and silver bars totally weighing 4.353 kgs valued at Rs 10,405/-. Shri Bherumal Khimchand Shah claimed those silver rods and coins as belonging to him. He, however, did not produce vouchers or bills for acquisition of the said bars, silver rods and coins. Therefore, the officers seized the said quantity of silver. Thereafter the statements of Shri Bherumal Khimchand Shah and Shri Mithalal Khimchand Shah, the partners of M/s. Ambica Jewellers were also recorded. They among other....
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....eized from Shri Kadarbhai belonged to Smt. Magniben who had given to her brother for sale and the brother in turn gave to Shri Kadarbhai for refining and thereafter to pay the price. There was no transaction of sale by the firm. The transaction in question was purely a private transaction with a view to assist the widowed sister. In the circumstances and particularly when the Additional Collector was satisfied that there was no attempted export on penalty should have been imposed and even if the goods are liable to confiscation having regard to the technical nature of the offence, a nominal fine would have met the end of justice. 7. As regards the silver from the shop Shri Mehta submitted that the total value was only Rs. 10,405/- which being less than Rs.15,000/- question of violation of Chapter IV B does not arise. He also challenged the confiscation of the bicycle. 8. Shri Senthivel, appearing for the Collector, however, submitted that there was clear violation of the provisions of Chapter IV B particularly Section 11 (J), (K) and (L). He submitted that Smt. Magniben, when she brought silver rods and silver coins valued more than Rs. 15,000/- to the specified area required to ....
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....u of confiscation in respect of silver weighing 20.956 kgs valued at Rs. 37,270/- seized from the possession of Shri Kadarbhai. (3) Whether the Additional Collector committed an error in law in ordering confiscation of the bicycle. (4) Whether the Additional Collector was unjustified in imposing penalty of Rs. 1000/- on all the appellants. 10. Point No. 1. - In his order the Additional Collector proceeded on the footing that all the appellants were guilty of contravention of the provisions of Section 11(J), (K), (L) and (M) of Chapter IV B in respect of the seizure of silver from Shri Kadarbhai as well as from the shop. He did not make any distinction between the two seizures. It is not clear how the Additional Collector could hold Shri Kadarbhai or Smt. Magniben for the contravention, if any, by the firm or its partners in respect of the silver seized from the shop. The contravention, if any, could be either by the firm or its partners and not strangers like Shri Kadarbhai or Smt. Magniben, who are in no way concerned in the business of the partnership firm. Thus a total non-application of the mind on the part of the Additional Collector is evident. In his order, the Additional....
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....V B by the firm a penalty imposed on the firm requires to be set aside and accordingly I set aside the same. 12. According to the statement of Shri Kadarbhai the silver rods and coins were seized from his possession were given to him by Shri Mithalal Khimchand Shah. It is true that it was given to him in the premises of the firm. The partner Shri Bherumal Khimchand Shah in his statement also stated that the silver coins and rods belonged to his sister were given to Shri Kadarbhai for refining and sale. Both the brothers acted for and on behalf of their sister and it was not intended to be their transaction. In the circumstances, it is difficult to accept the Additional Collector's finding that the two brothers contravened the provisions of Chapter IV B. The silver in question did not belong to them. They cannot be considered as the persons owned or possessed or controlled. They had temporary custody. At the relevant time the silver was owned by their sister. In the circumstances, the Additional Collector, in my opinion, was unjustified in imposing penalty on two partners. 13. Since Shri Kadarbhai did not possess transport voucher it could be said that the silver had become liable....
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....V B. The Additional Collector had rightly found that the materials placed did not warrant to hold that there was attempted export. The violation attributable to Shri Kadarbhai and Smt. Magniben in respect of the seized silver from Shri Kadarbhai was under Section 11(K) of the Customs Act. The violation of Section 11(K) would not by itself convert the silver into smuggled goods though for violation of Section 11(K) the confiscation could be ordered having regard to Section 113(L). Neither the Customs Act nor the Rules made thereunder define the expression "smuggled goods". Shri Senthivel placed reliance on sub-section (39) of Section 2 of the Act. That sub-section only gives the definition of "smuggling" and not "smuggled goods". Smuggled goods is normally understood as the goods which is imported into India without payment of duty or in violation of restrictions of prohibition as to the entry of the goods into India. There is no evidence that the silver in question was brought into India without payment of duty or in violation of the restrictions or prohibition relating to the entry into India. In the circumstances, the seized silver cannot be considered as smuggled goods. Once it ....