2023 (1) TMI 344 - AT - Central Excise

Gold Balas - Primary Gold as defined under Section 2(r) of the Gold Control Act, 1968, as amended or not - Confiscation - penalty - existence of corroborative evidences or not - HELD THAT - The Appellant Shri Sailendra Narayan Panda has filed some documents which would go to show that he is the legal heir of Late Binod Bihari Panda - Further, in the order impugned before me Shri Sailendra Narayan Panda has been considered as the legal heir of Late Binod Bihari Panda. I find that the Hon ble High Court of Orissa, the Chief Commissioner and the Principal Commissioner have already considered Shri Sailendra Narayan Panda, the Appellant before me as legal heir of Late Binod Bihari Panda. Now the question of legal heir being raised by the Authorized Representative for the Department in the course of hearing does not have any legs to stand at this juncture. This is totally uncalled for and the Authorized Representative before raising such legal issues should have properly gone through the records of the case and once Shri Sailendra Narayan Panda has been considered as the legal heir he has no authority to question and raise doubts on such consideration. In support of the stand of the Appellant, with regard to 11 gold Balas to be ornaments, the evidence is available on record such as statement of important personality of the area and affidavits filed by the then Deputy Minister of Orissa Cabinet and the then Member of Orissa Legislative Assembly from Koksara Constituency in the district of Kalahandi. The finding of the Adjudicating authority, holding it primary gold is based on mere surmises. The Adjudicating authority failed to appreciate the evidence adduced by the claimant of the gold Balas that it is usual and common that the said gold Balas are used by the people of that locality as ornaments in their neck and also wrist. It is clear that the Adjudicating authority is of the opinion that 11 gold Balas are ornaments. Had it been otherwise, he would have re-adjudicated the matter afresh - the Principal Commissioner passed order for confiscation of the gold Balas in question and further imposed penalty of Rs.50,000/- (Rupees Fifty Thousand only) on a dead person. It is settled principle of law that any order passed against a dead person is a nullity. It would appear from the impugned order that there are pictures of gold seized. If those pictures are perused, a correct conclusion can be drawn that these are in the form of ornaments and the same is worn by the people of western Odisha. It is evident from the photographs of the item seized under the impugned order dated 31.12.2020, it is quite clear that a definite shape has been given to the gold Balas in question and had it been a primary gold, it would have been simple gold rod or plate or pieces, and it should not have been bent and also given a certain shape which is evident from the picture. Therefore, there is no room for doubt that these gold Balas are gold ornaments having a definite shape to be worn by the local people. In any view of the matter the seized gold Balas are ornaments and may be released to the Appellant - appeal allowed.

Summary

Issues Involved:
1. Classification of seized gold Balas as primary gold or ornaments.
2. Legitimacy of adjudication by the Principal Commissioner post-repeal of the Gold Control Act, 1968.
3. Validity of imposing a penalty on a deceased person.
4. Consideration of legal heir status of the Appellant.

Issue-Wise Detailed Analysis:

1. Classification of Seized Gold Balas as Primary Gold or Ornaments:
The core issue revolves around whether the 1315.788 grams of gold items, including gold Balas, should be classified as primary gold under Section 2(r) of the Gold Control Act, 1968. The Principal Commissioner had ordered the confiscation of these items, considering them primary gold. However, the Appellant contended that these gold Balas were ornaments belonging to the family, as evidenced by statements and affidavits from local representatives and public officials, asserting that such items are traditionally used as ornaments in their locality. The Tribunal noted that the Hon'ble High Court had previously set aside the confiscation order and remitted the matter for reconsideration, emphasizing the need to assess whether the items were primary gold or ornaments based on available evidence. The Tribunal concluded that the evidence, including photographs showing the gold Balas in definite shapes typical of ornaments, supported the Appellant's claim that these were indeed ornaments.

2. Legitimacy of Adjudication by the Principal Commissioner Post-Repeal of the Gold Control Act, 1968:
The Appellant argued that the Principal Commissioner lacked the authority to adjudicate the matter afresh, as the Gold Control Act had been repealed since 1990. The Tribunal observed that the Hon'ble High Court had directed the Chief Commissioner to consider the Appellant's representation for releasing the seized gold, and the Principal Commissioner's action of passing a fresh confiscation order was not in line with this directive. Moreover, the Tribunal highlighted that the possession of gold was no longer an offense under the new fiscal policy, further undermining the basis for adjudication under a repealed Act.

3. Validity of Imposing a Penalty on a Deceased Person:
The Principal Commissioner had imposed a penalty of Rs. 50,000 on Late Binod Bihari Panda, which the Appellant challenged, citing the legal principle that any order passed against a deceased person is a nullity. The Tribunal upheld this contention, affirming that the penalty imposed on a deceased individual was invalid and could not be sustained.

4. Consideration of Legal Heir Status of the Appellant:
The Respondent Department questioned the legal heir status of Shri Sailendra Narayan Panda, who filed the appeal as the legal heir of Late Binod Bihari Panda. The Tribunal found that the Hon'ble High Court, Chief Commissioner, and Principal Commissioner had already recognized Shri Sailendra Narayan Panda as the legal heir. The Tribunal criticized the Authorized Representative for raising this issue at this stage, deeming it uncalled for and unsupported by the case records.

Conclusion:
The Tribunal set aside the impugned order, recognizing the seized gold Balas as ornaments rather than primary gold. It invalidated the penalty imposed on the deceased and criticized the Principal Commissioner's unauthorized adjudication under a repealed Act. The appeal was allowed, granting consequential relief to the Appellant, and the seized gold Balas were ordered to be released.