1980 (10) TMI 200 - HC - Central Excise

Summary

Issues:
1. Confiscation of gold sovereigns and penalty imposition under the Gold (Control) Act, 1968.
2. Lack of evidence regarding possession of gold ornaments by the petitioners.
3. Interpretation of Section 16(5) of the Act concerning the weight limits for articles and ornaments.

Analysis:

Issue 1: Confiscation of gold sovereigns and penalty imposition
The Customs and Central Excise Preventive Staff conducted a search at the petitioners' premises and found gold sovereigns in possession of the petitioners. The authorities issued a notice under Section 71 of the Gold (Control) Act, 1968, for confiscation of the sovereigns and imposition of a penalty. The Deputy Collector and subsequent authorities upheld the confiscation and penalty, citing Section 16(5)(a) of the Act, which limits the total weight of articles possessed by a family to 50 grammes. The petitioners challenged these orders under Article 226 of the Constitution of India.

Issue 2: Lack of evidence on possession of gold ornaments
The Revisional Authority's order, which confirmed the confiscation of sovereigns, was based on the assumption that no gold ornaments were found in the petitioners' possession. However, there was no material evidence supporting this claim. Independent witnesses of the search confirmed the presence of gold ornaments in the petitioners' house. The Revisional Authority's decision was deemed erroneous as it lacked factual basis, leading to a flaw in the order.

Issue 3: Interpretation of Section 16(5) weight limits
The Deputy Collector and the Collector interpreted Section 16(5) of the Act to restrict the total weight of articles owned by a family to 50 grammes under clause (a) and 4000 grammes for both articles and ornaments under clause (b). However, a Division Bench of the Madras High Court and a single Bench of the Calcutta High Court held that the limit specified in clause (a) should not be applied to clause (b). The Court agreed with this interpretation, stating that when clause (b) is applicable, the weight limit specified in clause (a) does not apply.

In conclusion, the Court allowed the petition, quashed the impugned orders, and directed the return of the confiscated sovereigns to the petitioners. The judgment highlighted the importance of factual evidence, correct interpretation of statutory provisions, and adherence to legal principles in confiscation cases under the Gold (Control) Act, 1968.