2011 (2) TMI 304 - HC - Customs

Seizure - Penalty - During the course of raid, certain gold ornaments were seized. The officers concerned also conducted an exercise of weighing the gold ornaments as well as ascertaining the purity of the ornaments seized - Held that Tribunal records in our view correctly, that the discrepancy in purity was not material as the Collector had, on 23-7-1987, ordered a re-examination of the gold ornaments seized when, it was found that while the number of pieces and the total weight of the ornaments remained the same, there was a slight difference in so far as purity was concerned - The method employed according to the authorities below is not accurate and therefore, there was a variation in the purity - mere discrepancy in purity did not vitiate the proceedings - Appeal is dismissed

Summary

Issues:
1. Seizure of goods and consequential proceedings
2. Legality of order based on grounds different from those alleged in the show cause notice
3. Imposition of penalty for technical omission in maintaining records

Seizure of goods and consequential proceedings:
The case involved a reference filed to direct the Tribunal to refer questions of law for adjudication by the court. The petitioner's premises were raided, and gold ornaments were seized. A show cause notice was served, and an adjudication order was passed confiscating excess gold and imposing a penalty. The Tribunal affirmed the Collector's decision. The petitioner sought a reference to the court, which was rejected. The court found that the purity discrepancy in the seized ornaments did not vitiate the proceedings as the total weight remained the same. The method used to ascertain purity was deemed inaccurate, leading to the variation. The court agreed with the Tribunal's reasoning that the discrepancy in purity did not invalidate the proceedings.

Legality of order based on different grounds:
The petitioner raised concerns about the legality of the order based on grounds different from those alleged in the show cause notice. The Tribunal concluded that the questions raised were pure questions of fact and did not require a reference. The court agreed with the Tribunal's decision, emphasizing that the discrepancy in purity was not material as the total weight and pieces of ornaments seized remained the same. The court concurred with the Tribunal's view that the questions raised were factual in nature and did not warrant a reference.

Imposition of penalty for technical omission:
The issue of imposing a penalty for a technical omission in maintaining records was also raised. The Tribunal relied on a judgment of the Allahabad High Court to decide that the penalty was justified for the technical breach committed. The court agreed with the Tribunal's decision, citing the same judgment to support the imposition of the penalty. The court concurred with the Tribunal's reasoning that the penalty was warranted for the technical breach. Ultimately, the court dismissed the reference based on the findings and conclusions of the Tribunal.