1997 (1) TMI 94 - HC - Central Excise

Summary

Issues:
1. Whether the order of confiscation and penalty was vitiated due to the department not conducting a fuller investigation for the scrutiny of bills and accounts of M/s. D.D. Vernekar and Bros.

Analysis:
The case involved a reference made under Section 82(B)(3) by the Customs, Excise and Gold (Control) Appellate Tribunal to the High Court of Judicature at Madras. The Additional Collector of Central Excise, Madras, had ordered the confiscation of gold items and levied fines and penalties under the Gold (Control) Act. The Tribunal upheld the order of the adjudicating Authority, finding the applicant in contravention of various sections of the Act. The Tribunal suggested that a fuller investigation into the accounts and bills of M/s. D.D. Vernekar and Bros. could have been beneficial. The applicant, dissatisfied with the Tribunal's decision, approached the High Court for a reference.

The applicant argued that a proper investigation was not conducted, which could have helped substantiate their case. On the other hand, the Additional Central Government Standing Counsel contended that the Tribunal's observation regarding the need for a fuller investigation did not undermine the credibility of the findings of guilt against the applicant. The High Court analyzed the submissions and concluded that the Tribunal's suggestion for a fuller investigation was more of a caution for the future and did not invalidate the findings of guilt by the adjudicating Authority and the Tribunal.

The High Court held that the failure to conduct a fuller investigation did not absolve the applicant from proving the purchase of the ornaments from M/s. D.D. Vernekar and Bros. and correlating them with the seized items. Based on the concurrent findings of fact by the adjudicating Authority and the Tribunal, the High Court found no grounds to interfere with the order. Consequently, the High Court answered the reference question in the affirmative, stating that the order of confiscation and penalty was not vitiated due to the lack of a fuller investigation by the Department into the bills and accounts of M/s. D.D. Vernekar and Bros.