2010 (5) TMI 786 - AT - Central Excise

Summary

Issues Involved:
1. Conscious possession of gold.
2. Interpretation of possession under the Gold (Control) Act, 1968.
3. Distinction between adjudication and criminal proceedings.
4. Legality of confiscation of gold.

Detailed Analysis:

1. Conscious Possession of Gold
The primary issue was whether the respondent was in "conscious possession" of the gold recovered from his premises. The Tribunal held that the respondent was not in conscious possession of the gold slabs and rods, as they were allegedly kept by his mother who had died in 1946. The Tribunal relied on the findings of the Chief Judicial Magistrate (CJM), who had acquitted the respondent on the grounds that he was not in conscious possession of the gold.

2. Interpretation of Possession under the Gold (Control) Act, 1968
The second issue was whether possession under Section 8 of the Gold (Control) Act, 1968, meant conscious possession. The Tribunal referred to the Hon'ble High Court's judgment, which clarified that possession under the Act indeed meant conscious possession. The High Court's judgment, in paragraph 20, stated: "The legal position is no more res integra that 'possession of gold' in contravention of 1968 Act means 'conscious possession'."

3. Distinction Between Adjudication and Criminal Proceedings
The third issue involved the distinction between adjudication proceedings under Section 71(1) and criminal proceedings under Section 85(1) of the Gold (Control) Act, 1968. The Tribunal acknowledged that the standards of proof in adjudication and criminal proceedings are different. The former requires a preponderance of probability, while the latter requires proof beyond a reasonable doubt. The Tribunal, however, found no reason to disagree with the CJM's findings, which were based on the higher standard of proof required in criminal proceedings.

4. Legality of Confiscation of Gold
The fourth issue was whether the gold slabs and rods were liable for confiscation. The Tribunal had to consider whether the confiscation was justified under Section 71(1) of the Gold (Control) Act, 1968. The Tribunal noted that the CJM had acquitted the respondent, and thus, it was improper to allow the confiscation order to stand against the findings of the Criminal Court. The Tribunal also referred to the High Court's guidelines in paragraph 18, which laid down criteria for the departmental authority to follow the findings recorded by the Criminal Court.

Conclusion
The Tribunal concluded that the first and second questions raised by the applicant were either questions of fact or already settled by the High Court. However, the third question was reframed and referred to the Hon'ble High Court for clarity on whether the Tribunal followed the criteria laid down by the High Court in its remand order. The Tribunal allowed the reference application to the extent of the reframed third question and directed the Asstt. Registrar to send certified copies of relevant documents to the Registrar of the Hon'ble High Court for necessary follow-up action.

(Pronounced in court)