1986 (7) TMI 114 - HC - Central Excise

Summary

Issues Involved:
1. Legality of the confiscation order dated 10th January 1964.
2. Entitlement to the return of seized gold or its market value.
3. Jurisdiction of the Collector of Central Excise to reconsider the confiscation order.
4. Date for determining the value of the seized gold.

Summary:

1. Legality of the confiscation order dated 10th January 1964:
The Gold Control Officers seized gold from Sambhunath Karmakar on 26th April 1963, and the Collector of Central Excise ordered confiscation on 10th January 1964 for contravention of Rules 126C, 126F, 126G, and 126M of the Defence of India Rules, 1962. Sambhunath Karmakar did not appeal against this order. However, he was later acquitted by the High Court on 20th January 1966, which set aside his conviction and sentence.

2. Entitlement to the return of seized gold or its market value:
The trial judge directed the Union of India to either return the equivalent quantity of gold seized or pay the market price as of 6th May 1985. The seized gold no longer existed in specie, and the court had to decide whether the owner should be paid the value prevailing on the date the confiscation order was set aside or when the gold was made over to the Government Mint.

3. Jurisdiction of the Collector of Central Excise to reconsider the confiscation order:
The Collector of Central Excise, by his order dated 6th May 1985, held that the confiscation order was not sustainable and ordered the release of the confiscated gold. The appellants did not challenge this order under section 35B of the Central Excises and Salt Act, 1944, or through any writ application. Therefore, the court proceeded on the hypothesis that the Collector had jurisdiction to entertain the reconsideration application and direct the return of the seized gold or its value.

4. Date for determining the value of the seized gold:
The court considered whether the value should be based on the date the confiscation order was set aside (6th May 1985) or when the gold was made over to the Mint. The appellants failed to produce records showing the disposal of the gold. The court noted that the seized gold was not sold to a third party but appropriated by another government department. The obligation to return the gold accrued on the date the confiscation order was set aside. Thus, the trial judge rightly ordered the appellants to return the equivalent quantity of gold or pay the market price as of 6th May 1985.

Conclusion:
The appeal was dismissed, and the trial court's order dated 20th January 1986 was upheld. The appellants were directed to either return the equivalent quantity of gold seized or pay the market price as of 6th May 1985. There was a stay on the operation of this order and the trial court's order for two months.