Ram Kumar Agarwal Vs. Commissioner of Customs - Court Judgment

Excerpt:

.....(noticee no. 2 in the show cause notice), but he has not come up in appeal.2. on 16-12-1990 acting upon an intelligence, raid was conducted on the factory premises of the appellant known as m/s. ganesh bullion refinery at indore. he himself was, however, not available at the factory at that time, but his employee shri shravan kumar was present there and he was melting the silver. on conducting search, two silver brick weighing 318.595 kg. of foreign origin were recovered and the same were seized as no document regarding the legal acquisition of the same could be produced by shri shravan kumar, an employee of the appellant, at that time or by the appellant himself on any subsequent date. a show cause notice was accordingly issued to both of them. shri shravan kumar admitted the recovery of the silver bricks and maintained that he was melting the silver on the direction of the appellant as he was only an employee with him on monthly salary. the appellant himself denied the allegations as made out in the show cause notice and maintained that in his absence his employee, shri shravan kumar might have accepted the silver bricks for melting from any other party and as such he was not.....

Judgment:

1. This appeal has been filed by the appellant against the impugned order-in-original dated 23-10-2002 passed by the Commissioner vide which he had ordered for confiscation of silver weighing 318.519 kg.

and imposed penalty of Rs. 10 lakhs on him, under Section 112 of the Customs Act, 1962. A penalty of Rs. 50,000/- had also been imposed through this order by the Commissioner on Shri Shravan Kumar (Noticee No. 2 in the show cause notice), but he has not come up in appeal.

2. On 16-12-1990 acting upon an intelligence, raid was conducted on the factory premises of the appellant known as M/s. Ganesh Bullion Refinery at Indore. He himself was, however, not available at the factory at that time, but his employee Shri Shravan Kumar was present there and he was melting the silver. On conducting search, two silver brick weighing 318.595 kg. of foreign origin were recovered and the same were seized as no document regarding the legal acquisition of the same could be produced by Shri Shravan Kumar, an employee of the appellant, at that time or by the appellant himself on any subsequent date. A show cause notice was accordingly issued to both of them. Shri Shravan Kumar admitted the recovery of the silver bricks and maintained that he was melting the silver on the direction of the appellant as he was only an employee with him on monthly salary. The appellant himself denied the allegations as made out in the show cause notice and maintained that in his absence his employee, Shri Shravan Kumar might have accepted the silver bricks for melting from any other party and as such he was not liable for his act. The statement of the appellant was also recorded.

The Commissioner thereafter passed the impugned order.

3. The appellant himself has not come present. He has only sent written submissions wherein he has denied his liability for personal penalty.

He has, however, claimed the silver, but denied its smuggled character.

4. We have heard the learned JDR and gone through the written submissions of the appellant. So far as the recovery of seized silver bricks of foreign origin from the factory premises of the appellant by the Preventive Staff of the Central Excise on 16-12-1990 is concerned, the same has not been disputed by the appellant. He has rather claimed the silver bricks, but has failed to produce any cogent reliable evidence to prove the lawful acquisition of the same. The silver bricks were found to be of foreign origin. He along with the reply to his show cause notice only enclosed one statement showing the stock of silver in his refinery on 15-12-1990. In his statement he also alleged that he is proprietor of M/s. Ganesh Bullion Refinery in which refining of raw silver into purity is generally done and silver is converted into weights as desired by the customers. He has failed to disclose the names of the customers who supplied the seized silver bricks for purification. His plea that in his absence his employee, Shri Shravan Kumar received the silver sillies from somebody for melting and he learnt about this fact later on, and those were not of foreign origin, does not find corroboration from any evidence/material on record. Even Shri Shravan Kumar in his statement had not corroborated his this version by deposing that silver sillies were received by him in the absence of the appellant from outside customer for purification.

5. At the time of recovery the silver was not OGL. It was restricted item. It was for the appellant to furnish proof regarding the lawful acquisition of the silver bricks of foreign origin recovered from his factory premises. But he has failed to do. Therefore, the confiscation of the seized silver bricks had been rightly ordered by the Commissioner.

6. However, the Commissioner should have allowed the redemption of the silver bricks to the appellant from whose custody the same were recovered on payment of reasonable redemption fine. Therefore, we modify the impugned order of the Commissioner and allow the redemption of the confiscated silver bricks to the appellant on payment of redemption fine of Rs. 6 lakhs (Rupees six lakhs only). Keeping in view the facts and circumstances of the case, we also reduce the penalty imposed on the appellant to Rs. 4 lakhs (Rupees four lakhs only).

Except for this modification, the impugned order of the Commissioner is upheld. The appeal of the appellant in the terms of the modification, referred to above, stands disposed of above.