1985 (5) TMI 129 - HC - Central Excise

Summary

Issues:
1. Seizure of gold under the Gold (Control) Act, 1968.
2. Classification of seized gold as "primary gold" or "ornaments."
3. Challenge to the orders of confiscation and penalty imposition.

Analysis:

Issue 1: Seizure of Gold
The petitioner was found with 50 pieces of gold welded rods weighing 1214.500 grams, seized by Central Excise Department officers at a post office. The petitioner claimed the gold was sent by a friend from Bombay. Show cause notices were issued, leading to confiscation of the gold under the Gold (Control) Act, 1968.

Issue 2: Classification of Gold
The central issue was whether the seized gold qualified as "primary gold" as defined by the Act or as "ornaments." The Act defines "primary gold" as gold in unfinished or semi-finished form, while "ornaments" are finished items for adornment. The authorities classified the gold as "primary gold," indicating it was not fit for personal adornment due to weight and workmanship.

Issue 3: Challenge to Confiscation Orders
The petitioner contested the classification, arguing the seized gold were ornaments commonly used in Orissa. The courts noted discrepancies in descriptions of the seized gold as rods and churis. The revisional authority held the gold was never used as ornaments in Orissa. However, expert opinions were not sought, raising doubts on the conclusion. The orders were found lacking in determining whether the gold was in an unfinished or semi-finished state.

Conclusion:
The court set aside the orders of confiscation and penalty imposition, directing re-adjudication by the authorities. The matter was to be re-examined in accordance with the law, emphasizing the need for clarity on the form and state of the seized gold. Each party was to bear its own costs in the case.