1986 (8) TMI 246 - AT - Customs

Summary

Issues:
1. Appeal against the Order in Appeal imposing a fine and penalty under the Gold (Control) Act, 1968.
2. Contravention of Section 6(2) of the Act regarding unaccounted gold and ornaments in a pawn broking shop.
3. Dispute over the confiscation of unaccounted gold ornaments belonging to third parties.
4. Interpretation of Section 71 of the Act regarding confiscation of gold.

Analysis:
The appeal was filed against the Order in Appeal by the Collector of Central Excise (Appeals), Madras, imposing a fine and penalty on the appellant for contravention of Section 6(2) of the Gold (Control) Act, 1968. The contravention was discovered when the authorities seized unaccounted gold and ornaments from the appellant's pawn broking shop. The appellant did not dispute the unaccounted items but contested the confiscation of gold ornaments belonging to third parties. The appellant argued that under the proviso to Section 71 of the Act, ornaments belonging to third parties cannot be confiscated. The Departmental Representative agreed with this legal proposition.

The main issue revolved around the confiscation of the gold ornaments under seizure, which were proven to belong to third parties. The presiding judge analyzed the provisions of Section 71 of the Act, which state that if the gold belongs to a person other than the one who rendered it liable for confiscation, and the act was without the knowledge of the owner, confiscation cannot be ordered. Since it was established that the ornaments belonged to various other persons and there was no evidence of the appellant's knowledge or connivance in rendering the ornaments liable for confiscation, the judge ruled that the ornaments were not liable for confiscation.

As a result, the impugned order was set aside concerning the confiscation and imposition of a fine in lieu of confiscation. However, the penalty imposed on the appellant under Section 6(2) for the contravention was upheld as it was established by the evidence and admitted by the appellant. The judge concluded by ordering the decision accordingly, maintaining the penalty while overturning the confiscation of the gold ornaments belonging to third parties.