1986 (8) TMI 241 - AT - Central Excise

Issues Involved:
1. Legality of the confiscation order under Section 71 of the Gold (Control) Act, 1968.
2. Necessity of issuing notice under Section 79 of the Gold (Control) Act, 1968.
3. Evidence to controvert the sale voucher and affidavits.
4. Sustainability of the confiscation order.
5. Title to gold under the Sale of Goods Act, 1930.
6. Transgression of Sections 8 and 55 of the Gold (Control) Act, 1968.

Detailed Analysis:

1. Legality of the Confiscation Order under Section 71:
The Tribunal considered whether the confiscation of gold was illegal due to the failure to afford an opportunity to the claimants to prove ownership and lack of knowledge or connivance in the transgression. It was held that the initial presumption under Section 99 of the Act is that the person in possession of the gold owns it. The confiscation order was deemed legal because neither M/s. Talwar Jewellers nor the three ladies claiming ownership appeared before the Collector to stake a claim. Thus, the confiscation was upheld as the proviso to Section 71 was not attracted.

2. Necessity of Issuing Notice under Section 79:
The Tribunal examined whether notice under Section 79 must be issued to claimants to establish ownership. It was concluded that Section 79 did not apply because there were no claimants before the adjudicating authority. The Tribunal emphasized that the term "claimant" implies a demand made as a right, which was not present in this case. Therefore, the failure to issue notice under Section 79 did not render the confiscation order illegal.

3. Evidence to Controvert the Sale Voucher and Affidavits:
The Tribunal evaluated the evidence presented, including a sale voucher from M/s. Talwar Jewellers and affidavits from three ladies. The adjudicating officer deemed the voucher and affidavits as improbable and afterthoughts. The Tribunal upheld this view, stating that the affidavits and voucher did not shift the onus of proof to the Revenue. The evidence was insufficient to disprove the ownership of M/s. Talwar Jewellers and the three ladies.

4. Sustainability of the Confiscation Order:
The Tribunal found the confiscation order sustainable based on the facts and circumstances of the case. The initial presumption of ownership under Section 99 was not effectively rebutted, and the evidence presented was deemed insufficient. Consequently, the confiscation order was upheld.

5. Title to Gold under the Sale of Goods Act, 1930:
The Tribunal addressed whether the transaction with M/s. Talwar Brothers vested the appellant with the title to the gold brought on an approval basis under Section 24 of the Sale of Goods Act, 1930. It was concluded that since it was not established that the gold was obtained on an approval basis, the point became non-est.

6. Transgression of Sections 8 and 55 of the Gold (Control) Act, 1968:
The Tribunal held that the appellant had transgressed Section 55 of the Act read with Rule 13 of the Gold Control (Forms, Fees and Miscellaneous Matters) Rules, 1968. However, Section 8 did not apply in terms. The penalty was reduced from Rs.10,000 to Rs.7,000, while the confiscation and redemption order was sustained.

Separate Judgments:

Judgment by M. Gouri Shankar Murthy:
Murthy concluded that questions of law arose out of the Tribunal's order, warranting a reference to the High Court. He emphasized the need for an enquiry to determine ownership and the necessity of issuing notice under Section 79 to those appearing as owners based on evidence.

Judgment by H.R. Syiem:
Syiem disagreed, asserting that the supposed owners were put up by the appellant after the seizure to claim ownership falsely. He found no genuine claimants or owners, and thus, no questions of law arose for reference.

Judgment by S. Duggal:
Duggal, as the third member, agreed with Syiem, emphasizing that no genuine claimants existed, and the Tribunal's findings did not give rise to any questions of law. He reinforced that the Tribunal's order was based on credible evidence and upheld the confiscation order.

Final Order:
The Reference Application was dismissed in accordance with the majority judgment.

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