1983 (9) TMI 311 - AT - Customs

Summary

Issues:
1. Confiscation of primary gold under Section 71 and penalty under Section 74 of the Gold (Control) Act, 1968.
2. Interpretation of possession of primary gold under Section 8(1) of the Act.
3. Application of Section 16 in relation to possession of primary gold.
4. Distinction between possession by individuals and licensed dealers or certified goldsmiths.
5. Confiscation of gold coins due to failure to declare under the Act.
6. Determination of penalty amount in unique possession circumstances.

Analysis:
1. The case involved the confiscation of primary gold and imposition of penalties under Sections 71 and 74 of the Gold (Control) Act, 1968. The appellant appealed against the fine and penalty imposed by the Collector of Central Excise, Madras, following a search where primary gold and gold coins were seized from the appellant's possession.

2. The Tribunal analyzed the possession of primary gold under Section 8(1) of the Act. It was established that the primary gold devolved to the appellant upon the death of his sister, making him the possessor of the gold at the time of the search. The possession of primary gold by the appellant was deemed a violation of Section 8(1) as he did not fall under the exceptions provided for certified goldsmiths or dealers.

3. The Tribunal delved into the application of Section 16 concerning the possession of primary gold. The argument that possession of gold under 4000 gms was not an offense under Section 8(1) based on Section 16 was dismissed. The Tribunal clarified that Section 16 primarily dealt with declarations regarding gold articles and ornaments, not possession of primary gold, as defined in the Act.

4. A distinction was drawn between possession by individuals and licensed dealers or certified goldsmiths under Sections 32 and 42 of the Act. The Tribunal differentiated cases involving individual possession from those of dealers, emphasizing the specific provisions allowing possession by dealers under certain conditions.

5. The confiscation of gold coins was challenged based on the failure of the deceased sister to declare them. The Tribunal ruled that since the appellant acquired possession through succession, the gold coins were not liable for confiscation due to the sister's omission to declare them, setting aside the confiscation of the gold coins.

6. In light of the unique circumstances surrounding the possession of primary gold, the Tribunal reduced the penalty imposed on the appellant from Rs. 10,000 to Rs. 5,000, considering the appellant's explanation and the sentimental value attached to the gold items.