1991 (12) TMI 60 - HC - Central Excise

Summary

Issues involved: Seizure of gold ornaments u/s 66(1) of Gold (Control) Act, 1968, refusal to return seized ornaments, liability to return or reimburse value of ornaments, claim of theft, entitlement to interest on withheld amount.

Summary:
The petitioners, certified goldsmiths under the Gold (Control) Act, had their gold ornaments seized by the Superintendent of Central Excise under Section 66(1) of the Act. After adjudication, it was found that the seized gold belonged to the petitioners' customers and was not liable for confiscation. However, the Additional Collector refused to return the ornaments as they were reported missing, leading to the filing of a petition under Article 226 of the Constitution.

The respondents contended that the seizure was based on statutory functions and sovereign powers, citing a Supreme Court decision. The court disagreed, stating that the power to seize under Section 66(1) of the Act was not based on sovereign powers but statutory provisions. Therefore, the respondents were obligated to return the gold ornaments.

Regarding the claim of theft and refusal to return the ornaments, the court held that there was a compulsion to return seized articles when the seizure was unsustainable. If the articles were unavailable, the respondents had to refund the market value as of the date they were liable to return the ornaments.

The petitioners were also entitled to interest on the withheld amount since February 22, 1983, along with the market value of the gold ornaments. The court directed the respondents to pay the market value of the seized ornaments, determined as of February 22, 1983, and interest at 12% per annum from that date until the actual payment, in addition to the costs of the petition.