2006 (9) TMI 473 - AT - Customs

Summary

Issues Involved:
1. Legality of the confiscation of primary gold.
2. Conscious possession of the gold by the appellant.
3. Impact of the criminal court's acquittal on the confiscation order.
4. Applicability of Supreme Court precedents.
5. Determination of penalties and fines.

Summary:

1. Legality of the confiscation of primary gold:
The case involves an appeal u/s Gold (Control) Act. The Central Excise Officers seized primary gold from the premises of the appellant in November 1973. The Collector of Central Excise ordered absolute confiscation of the gold and imposed a penalty of Rs. 5 lakhs. The Appellate Authority set aside this order for violation of natural justice and remanded the case. Upon rehearing, the Collector again ordered confiscation and imposed a reduced penalty of Rs. 2 lakhs. The Tribunal later confirmed the confiscation but reduced the penalty to Rs. 30,000/-.

2. Conscious possession of the gold by the appellant:
The appellant contended that he had no knowledge of the gold, claiming it was kept by his mother who died in 1946. The Chief Judicial Magistrate (CJM) acquitted the appellant of conscious possession of the gold slabs and rods but held him responsible for the gold foils. The CJM noted that the gold was hidden in a manner that the appellant could not have discovered it accidentally, supporting the claim that the appellant was unaware of its presence.

3. Impact of the criminal court's acquittal on the confiscation order:
The Bombay High Court remanded the matter back to the Tribunal for fresh consideration, emphasizing the need to consider the CJM's findings. The Supreme Court in Gopaldas Udhavdas Ahuja & Anr. v. Union of India & Ors. and M. Paul Anthony v. Bharat Gold Mines Ltd. clarified that acquittal in criminal proceedings does not automatically nullify confiscation orders but must be considered if the basic facts and evidence are common.

4. Applicability of Supreme Court precedents:
The Tribunal examined the Supreme Court's observations that departmental proceedings and criminal prosecutions are distinct, with different standards of proof. The Tribunal agreed that the CJM's findings, based on a thorough inspection and logical reasoning, indicated that the appellant was not in conscious possession of the gold.

5. Determination of penalties and fines:
The Tribunal set aside the confiscation of the primary gold (12 gold slabs and 13 gold rods) but upheld the confiscation of 18 gold foils, allowing them to be redeemed on payment of a fine of Rs. 500/-. The penalty was further reduced to Rs. 500/-.

Conclusion:
The Tribunal concluded that the appellant was not in conscious possession of the primary gold, thus setting aside its confiscation. However, the confiscation of the gold foils was upheld with a minimal fine, and the penalty was significantly reduced.