1983 (7) TMI 304 - AT - Customs

Issues Involved:
1. Confiscation of 86 gold sovereigns.
2. Imposition of redemption fine and personal penalty.
3. Interpretation of Section 16(5) of the Gold (Control) Act, 1968.

Detailed Analysis:

1. Confiscation of 86 Gold Sovereigns:
The appellants, Smt. Lilawati and Shri Shankar Prasad, challenged the confiscation of 86 gold sovereigns weighing 683.500 grams. The Collector of Central Excise, Jaipur, had ordered the confiscation under Section 71 of the Gold (Control) Act, 1968, citing that these were in excess of the permissible limit and had not been declared as required under Section 16(1) of the Act. The Collector found a violation of Section 16(1) and ordered the confiscation with an option to redeem the same under Section 73 on payment of a redemption fine of Rs. 12,000/- and levied a personal penalty of Rs. 500/- each on the appellants under Section 74.

2. Imposition of Redemption Fine and Personal Penalty:
The Collector imposed a redemption fine of Rs. 12,000/- and a personal penalty of Rs. 500/- each on Smt. Lilawati and Shri Shankar Prasad. This was based on the finding that the 86 gold sovereigns were in excess of the permissible limit and had not been declared as required under Section 16(1) of the Gold (Control) Act, 1968.

3. Interpretation of Section 16(5) of the Gold (Control) Act, 1968:
The critical issue revolved around the interpretation of Section 16(5) of the Gold (Control) Act, 1968, which deals with the limits on the possession of gold articles and ornaments. The appellants argued that the limitation of weight of articles owned, possessed, held, or controlled as envisaged in clause (a) of sub-section (5) of Section 16 was not applicable to the limit of possession prescribed in clause (b) of sub-section (5) of Section 16. They contended that an individual, who is a member of a family, could possess both articles and ornaments up to 2,000 grams, and a family could similarly possess articles and ornaments not exceeding 4,000 grams.

Tribunal's Findings:

Confiscation of 86 Gold Sovereigns:
The Tribunal held that the Collector's understanding was flawed. The Collector had found that S/Shri Shankar Prasad, Anupam Kumar, and Ajay Kumar could own, possess, hold, or control ornaments not exceeding 8,000 grams. Thus, the total gold ornaments and articles seized, including the 86 gold sovereigns, were within the permissible limit. The Tribunal cited judicial precedents, including Sahib Dayal and Asha Rani v. Union of India and Ors., 1983 E.L.T. 75 (P & H), which held that when both articles and ornaments are owned, possessed, held, or controlled, the provisions of clause (b) of Section 16(5) are attracted, and the limit on the weight of gold articles provided in Section 16(5)(a) would not be applicable.

Imposition of Redemption Fine and Personal Penalty:
The Tribunal found that the imposition of the redemption fine and personal penalty was not justified. The gold sovereigns, when considered along with the gold ornaments, did not exceed the permissible limit of 8,000 grams. Therefore, there was no violation of Section 16(1) of the Gold (Control) Act, 1968.

Interpretation of Section 16(5) of the Gold (Control) Act, 1968:
The Tribunal clarified that the limit on the weight of articles and ornaments under Section 16(5)(b) applies when both are possessed together. The Tribunal held that the Collector's interpretation that the limit on the weight of articles under Section 16(5)(a) should also apply when both articles and ornaments are possessed was incorrect. The Tribunal reiterated that when both articles and ornaments are owned, possessed, held, or controlled, the provisions of clause (b) of Section 16(5) are attracted, and the limit on the weight of gold articles provided in Section 16(5)(a) would not be applicable.

Conclusion:
The appeals were allowed, and the orders passed by the Collector of Central Excise, Jaipur, were set aside. The Tribunal held that the gold sovereigns, when considered along with the gold ornaments, did not exceed the permissible limit, and there was no violation of Section 16(1) of the Gold (Control) Act, 1968. The confiscation, redemption fine, and personal penalty were annulled.

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