1985 (3) TMI 281 - AT - Central Excise

Issues Involved:
1. Legality of the seizure of gold ornaments.
2. Adequacy of the appellant's record-keeping.
3. Validity of the show cause notice.
4. Applicability of Section 99 of the Gold (Control) Act, 1968.
5. Imposition of penalty and fine.

Issue-wise Detailed Analysis:

1. Legality of the seizure of gold ornaments:
The facts of the case reveal that the Gold Cell Officers, Calcutta, seized 823.000 grams of gold ornaments from the appellant's premises due to non-compliance with the Gold (Control) Act, 1968. The appellant failed to provide documentary evidence to support the possession of the seized gold. The seizure was based on the contravention of the provisions of the Gold (Control) Act, 1968, as the gold was not accounted for in the G.S. 13 Register.

2. Adequacy of the appellant's record-keeping:
The appellant maintained a private note-book, referred to as the 'Panama' book, instead of the mandatory G.S. 13 Register. The Tribunal observed that the maintenance of the G.S. 13 Register is a mandatory requirement and non-maintenance defeats the provisions of the Gold (Control) Act, 1968. The private 'Panama' book cannot be treated as a substitute for the G.S. 13 Register. The appellant admitted that due to ignorance, he did not maintain proper accounts, which led to the seizure.

3. Validity of the show cause notice:
The appellant argued that the show cause notice was defective due to discrepancies in the weight of the gold mentioned. The Tribunal found that the minor discrepancy in weight did not vitiate the show cause notice, as the correct weight was mentioned in other parts of the notice. The Tribunal upheld the validity of the show cause notice.

4. Applicability of Section 99 of the Gold (Control) Act, 1968:
The Tribunal referred to Section 99 of the Gold (Control) Act, 1968, which presumes that any person in possession, custody, or control of primary gold, articles, or ornaments is the owner unless proven otherwise. The gold was found in the appellant's possession, and he did not provide sufficient evidence to rebut this presumption. The Tribunal concluded that the appellant was to be treated as the owner of the seized gold under Section 99.

5. Imposition of penalty and fine:
The Collector of Central Excise imposed a penalty of Rs. 2,00,000/- and a fine of Rs. 35,000/- in lieu of confiscation. The Tribunal observed that the penalty was excessively harsh considering the appellant's status as an illiterate goldsmith in a village. Citing the principle that punishment must be proportionate to the offence, the Tribunal reduced the penalty to Rs. 30,000/- and the fine to Rs. 25,000/-. The Tribunal upheld the findings of the lower authorities regarding the contravention of the Gold (Control) Act, 1968, but provided relief by reducing the penalty and fine.

Conclusion:
The Tribunal upheld the seizure of gold ornaments and the validity of the show cause notice. The appellant's failure to maintain the mandatory G.S. 13 Register was a significant factor in the decision. The penalty and fine imposed by the Collector of Central Excise were deemed excessively harsh and were subsequently reduced by the Tribunal. The appeal was rejected except for the modification in the penalty and fine amounts.

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