1986 (8) TMI 191 - AT - Central Excise

Issues Involved:

1. Legality of the personal penalty imposed under Section 74 of the Gold (Control) Act, 1968.
2. Requirement of filing a declaration under Section 16 of the Gold (Control) Act for the seized gold ornaments.
3. Applicability of sub-section 2(f) of Section 16 to the appellant.
4. Clubbing of personal and pledged gold ornaments for the purpose of declaration.
5. Direction for the release of seized gold ornaments upon payment of the personal penalty.

Detailed Analysis:

1. Legality of the Personal Penalty Imposed under Section 74 of the Gold (Control) Act, 1968:

The appellant was dissatisfied with the Order-in-Original No. 4/83, dated 13-1-84, which imposed a personal penalty of Rs. 25,000/- under Section 74 of the Gold (Control) Act, 1968. The Adjudicating Authority held the appellant liable under Section 16 read with Section 6(1) of the Gold (Control) Act for failing to file the necessary declaration regarding the possession of gold ornaments weighing 2911.750 gms. net. Consequently, a personal penalty was imposed, and the seized gold was to be released only upon payment of this penalty.

2. Requirement of Filing a Declaration under Section 16 of the Gold (Control) Act for the Seized Gold Ornaments:

The appellant argued that the gold ornaments were mortgaged with him by various parties and did not exceed the limit prescribed under the Gold (Control) Act, thus negating the necessity for any declaration under Section 16. However, the Adjudicating Authority found that the appellant was under a legal obligation to file the declaration under Section 16, as he possessed gold ornaments exceeding the permissible limit. The Tribunal observed that Section 16 requires every person who owns, possesses, or controls any article or ornament to make a declaration unless exempted under sub-section (5).

3. Applicability of Sub-section 2(f) of Section 16 to the Appellant:

The appellant contended that the pawn broker business was carried on by a firm of HUF and not a partnership firm, making sub-section 2(f) of Section 16 inapplicable. However, during the adjudication proceedings, it was found that the money lending license was issued in the appellant's individual capacity, not as the 'Karta' of HUF. Therefore, the Adjudicating Authority concluded that the appellant was carrying on his pawn business as an individual, and the provisions of Section 16(2)(f) did not apply.

4. Clubbing of Personal and Pledged Gold Ornaments for the Purpose of Declaration:

The appellant argued that the quantity of both pledged and personal ornaments should be clubbed together for the purpose of making a declaration under Section 16 read with Section 6(1). The Tribunal rejected this contention, stating that Section 16 does not contemplate clubbing the holdings of ornaments in different capacities. The Tribunal emphasized that a person may own, possess, hold, or control ornaments in two different capacities within the prescribed quantity without making any declaration. Accepting the principle of clubbing would lead to hazardous results, such as an individual or 'Karta' of a family losing their personal holdings if they held ornaments for others to the maximum prescribed quantity.

5. Direction for the Release of Seized Gold Ornaments upon Payment of the Personal Penalty:

The Tribunal noted that the direction for releasing the seized gold ornaments upon payment of the personal penalty was not according to law, as no such direction can be issued when the penalty simpliciter is imposed. Such a direction is necessary only in cases where confiscation is involved, and the option to redeem in lieu of confiscation is given. However, it was informed that the appellant had already paid the fine, and the seized gold ornaments had been released, making a separate order on this issue unnecessary.

Conclusion:

The appeal was dismissed as devoid of any merits. The Tribunal upheld the Adjudicating Authority's decision, confirming the appellant's liability for failing to file the required declaration under Section 16 of the Gold (Control) Act and the imposition of the personal penalty.

← Previous Next →