1987 (1) TMI 217 - AT - Central Excise

Issues Involved:
1. Ownership of the seized gold.
2. Confiscation of the seized gold and currency.
3. Imposition of personal penalties.
4. Compliance with principles of natural justice.
5. Issuance of show cause notice under Section 124 of the Customs Act, 1962.

Detailed Analysis:

1. Ownership of the Seized Gold:
The appellant claimed ownership of the seized gold, contending it was obtained by melting old ornaments. However, the Adjudicating Authority found significant contradictions in the statements of Nirmal Singh, Jagir Singh (the appellant), and Kartar Singh. The appellant failed to provide credible evidence supporting his claim. The Tribunal upheld the Adjudicating Authority's decision, noting that the evidence adduced by the appellant did not establish ownership. The Tribunal pointed out tampering with transaction dates and inconsistencies in the appellant's story, concluding that the appellant did not prove his ownership of the gold.

2. Confiscation of the Seized Gold and Currency:
The Adjudicating Authority ordered the absolute confiscation of the 10 pieces of primary gold weighing 757.300 grams and the Indian currency of Rs. 85,000/- under the Customs Act and the Gold (Control) Act. The Tribunal upheld the confiscation of the gold but found the absolute confiscation to be harsh, allowing the appellants to redeem the gold on payment of a fine of Rs. 40,000/-. The confiscation of the currency was deemed unjustified and was not sustained.

3. Imposition of Personal Penalties:
Personal penalties were imposed on Amarjit Singh and Nirmal Singh under Section 74 of the Gold (Control) Act. The Tribunal noted that Nirmal Singh, as the principal actor, had violated Section 8(1) of the Gold (Control) Act by melting the ornaments at an unauthorized location and using his minor brother to transport the gold, demonstrating mens rea. However, the penalties on Amarjit Singh, who acted under his elder brother's influence, were set aside by the Central Board of Excise & Customs.

4. Compliance with Principles of Natural Justice:
The appellant argued that the principles of natural justice were violated as he was not given an opportunity to prove ownership. The Tribunal found this contention baseless, noting that the appellant was given full opportunity to present his case after the remand. The Tribunal emphasized that deficiencies in natural justice at the trial stage could not be cured in subsequent proceedings, but in this case, the appellant was afforded due process during the remand.

5. Issuance of Show Cause Notice under Section 124 of the Customs Act, 1962:
The appellant contended that no show cause notice was issued to him under Section 124 of the Customs Act. The Tribunal rejected this argument, stating that the Adjudicating Authority did not consider the appellant as the owner of the gold at the stage of issuing the show cause notice. The notices were issued to Amarjit Singh and Nirmal Singh, who were deemed the owners based on the investigation. The Tribunal clarified that the term "owner" in Section 124 does not include every person claiming ownership during the investigation, and the appellant had the opportunity to defend his claim during adjudication.

Conclusion:
The Tribunal dismissed the appeal, finding no merit in the appellant's claims. The ownership of the seized gold was not proven, the confiscation of the gold was upheld with an option for redemption, and the principles of natural justice were deemed to have been followed. The issuance of show cause notices was found to be appropriate under the circumstances.

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