AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2020 (5) TMI 9
X X X X Extracts X X X X
X X X X Extracts X X X X
.... namely, S/Shri Indarchand, K. Srinivasan, Hariganesan and Mahendran. These 5 parcels were opened in the presence of independent witnesses and found to contain 101.36 kgs. of silver granules/bars/leg chains etc., along with airway bills of M/s. Green Dart Courier, Chennai. Out of 101.36 kgs of silver found in the parcels, 60 kgs. was in the nature of silver granules and intended to be delivered to Shri M. Mahendran. The present dispute is confined to the said 60 kgs. of silver granules only relating to airway bill no.323030/26.06.2013 on which sender s name is shown as 'PJ' and recipient address as Mahendran. 1.1 The parcel consigned to Mahendran had three boxes. These three boxes had two carton boxes in each box. Hence there were totally six carton boxes and these carton boxes which contained silver granules had markings with serial numbers as Made in Korea Rs. 999.9`,along with lot numbers .Each carton box was found to contain 10 kg of silver granules and thus there was total quantity of 60 kg of silver granules. The description is as under: Carton Box No. Particulars of the materials available in the parcel Weight (in Kgs.) Sender Receiver (1) (2) (3) ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd narration of incidents as under: Date Event 27.6.2013 Based on intelligence, Customs Preventive Unit intercepts one load auto bearing registration No.TN30M0013 near Salem Junction and recover 5 parcels packed in plastic sacks. The recipient's name in the said parcels is mentioned as "Venkatesh SLM 9344664811". On the same date, Venkatesh of Salem is identified and asked to appear before the investigation authorities. Venkatesh appears along with four other persons to whom the parcels were to be delivered namely Inder Chand, Srinivasan, Hari Ganesan and Mahendran and statements were recorded from each other. Examination of the parcels reveal that they contain 101.361' Kgs. of silver granules / bars/ leg chains etc. of which 60 kgs. of silver granules are meant for Mahendran. 27.6.2013 Statement of Mahendran is recorded. He states that he is in the business of making silver leg chains and used to receive silver bars / granules from Gaurav of Mathura and used to convert the same into silver leg chains and send them back for which he would receive Rs. 400/- per kg. as making charges. He also states that the 60 Kgs. of silver granules were purchased by Gaurav from C....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ishant Silver Handicrafts to the appellant 20.1.2014 Statement of Gaurav Agarawal, appellant before the Deputy Commissioner of Central Excise, Aligarh, wherein the details of transaction and also submits the entire books of accounts including cash book, sales tax return, income tax statement and ledger accounts for purchase and sale / trade in silver. 13.2.2014 Show cause notice is issued by the department proposing confiscation and penalty. 1.4.2014 Reply to show cause notice filed contesting the proposal for confiscation and penalty./ 9.9.2015 O-I-O No.45/2015 (JC) passed by the original authority absolutely confiscating the silver granules and imposing penalty of Rs. 5 lakhs on the ground that the burden under sec.23 had not been discharged and that the packings of the polythene bags indicate that the silver might have been of Korea origin and smuggled. 6.11.2015 Appellant deposits 7.5% of the penalty amount and filed appeal to the Commissioner of Customs (Appeals), Trichy 9.12.2015 Appeal filed before the appellate authority 23.6.2016 The appellate authority namely the Commissioner of Customs (Appeals), Trichy rejects the appeal. 29.....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 4. The larger question which arises is whether the authorities below are right in invoking section 123 of the Customs Act, 1962. This issue which relates to silver bullion of quantities less than 100 kgs. having no foreign markings and not in the form of 30 Kgs. bar has been considered by the CBEC vide Circular dated 11.6.1990 in which if seizure is of silver bullion, meets the above criteria, then section 123 should not be invoked. Admittedly, in the present case, the seized quantity is only 60 kgs. and the silver bars do not have any foreign markings and are not of 30 kgs bars and therefore the burden cannot be cast on the appellant in terms of section 123. The very same issue has come up for consideration before this Hon'ble Tribunal in a number of cases of which the following is relied:- a. 2001 (131) ELT 198 (Tri. Chennai) b. 2001 (132) ELT 192 (Tri. Chennai) affirmed in 2009 (238) ELT A 166 (SC) c. 2005 (191) ELT 1103 (Tri. Kol.) d. 2005 (179) ELT 110 (Tri. Chennai) e. 2009 (239) ELT 427 (Tri. All.) f. 2009 (243) ELT 74 (Tri. Chennai) g. 2001 (133) ELT 668 (Tri. Kol.) affirmed in 2014 (312) ELT 17 (SC) ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... This case was relied upon by the learned counsel to argue that when seizure of silver was 69 kgs. and in the nature of bars, which did not have foreign markings, the Tribunal held Board's Circular would apply and confiscation set aside. The said decision was accepted by the Hon'ble High Court of Madras and the appeal filed by the department was withdrawn. (3) Ganesh Prosad Vs Commissioner of Customs, Patna reported in 2009 (191) E.L.T.1103 (Tri. -Kolkata). The learned counsel relied upon the above decision to argue that the circular was given effect to when the seizure of the silver was less than 100 kgs. without foreign markings. (4) Murarilal Agarwal Vs Commissioner of Central Excise, Trichy reported in 2005 (179) E.L.T.110 (Tri. -Chennai). The learned counsel relied upon the decision of the Larger Bench of the Tribunal wherein the applicability of the Board's circular was also discussed. The said order was affirmed by the Hon'ble High Court of Allahabad as reported in 2009 (239) E.L.T. 427 (All.). (5) Naqsood Alam Vs Commissioner of Customs, Lucknow reported in 201 5 (324} E.L.T.162 (Tri.-Del.). The learned counsel stressed that e....
X X X X Extracts X X X X
X X X X Extracts X X X X
....silver was found in polythene bags, kept inside these carton boxes. 3.1 The foreign company mentioned on these carton boxes is a manufacturer of silver bullion including granules. She adverted to para 30 of the show-cause notice, wherein, the department has referred to another case, of which the facts show that, on 02.02.2013, the officers of CPU had intercepted vehicle carrying 15 kgs. Silver of granules each weighing 10 Kgs. The said silver granules were of identical brand, Country of Origin and weighing 10 Kgs. In the said case, the purchaser Shri .Shiv Sahai of Salem produced the documents including airway bill in support of the imported silver granules. This would go to show that the said manufacturer in Korea is engaged in manufacturing and dealing of silver granules which are imported to India. The packing /carton boxes seized in the present case, should therefore be considered as foreign markings of the silver granules. The circular, therefore, does not apply. 3.2 Further the appellants have not been able to show that they have obtained the silver by legitimate import. Though they have produced invoices of several silver dealers, the department had obtained letters fr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssession of silver bullion less than 100 kgs. Further that when silver bullion is in the form of bars of 30 kgs. each and also silver bullion which bear foreign markings even though less than 100 kgs. can be subject to seizure for which proceedings can be initiated. 6.0 In the present case, the silver is not in the nature of bars or coins. It is in the form silver granules. As per the circular, when silver bullion is found in possession with foreign markings the same can be subject to seizure, if it is less than 100 kgs. In the present case, the quantity of silver bullion is 60 kgs. Then the question arises, whether silver granules would fall within the definition of silver bullion. The Commissioner (Appeals) in para 8 of his order has explained the meaning of bullion as seen in Wikipedia. Ordinary meaning of bullion given as per the dictionary is "Platinum, Gold or Silver, which is in bulk quantities". The meaning of bullion thus does not take away platinum, gold or silver in the form of grains/granules. Thus, granules also fall within the definition of bullion. This would lead to the consequence that if the silver granules has foreign markings even though less than 100 kgs. wo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....actions from M/s. S.B. Ornaments Pvt. Ltd., Agra, M/s. Nishant Silver Handicraft, Mathura and M/s. Prasanth Silver Handicraft, Mathura. Appellant has produced some invoices and accounts to support this. However all these sellers have issued letters to department stating that the silver sold by them was in the nature of bar, and not granules. Learned counsel has made a frail effort to counter this by stating that though bars might have been supplied by the silver dealers, the appellant could have processed the same into silver granules and then sent for job work to M/s. Vignesh Payals. There is no evidence substantiate that processing charges were paid for converting the bar into granules which is a bulk quantity of 60 kgs. The statement of Shri Gaurav Agarwal is totally silent on this aspect. At the cost of repetition it has to be mentioned that the carton boxes which contained the silver granules correctly mentioned the quantity in each box to be 10kgs, the name of manufacturer, the lot no. year of manufacture, purity etc. Further, it is a question to be answered by the appellant as to whether the silver granules after being processed out of a bar by the appellant retain such high....