1987 (2) TMI 234 - AT - Central Excise

Summary

Issues:
1. Seizure of gold under the Gold Control Act.
2. Confiscation of gold and imposition of penalty.
3. Interpretation of the Voluntary Disclosure Scheme.
4. Applicability of immunity provisions under the Scheme.

Analysis:

Issue 1: Seizure of gold under the Gold Control Act
The case involved the seizure of gold, including primary gold, from a Hindu undivided family by the Police in 1974. The Income Tax Officer later took possession of the gold. The Assistant Collector of Central Excise, Gwalior, notified the Income Tax Commissioner about a possible contravention of the Gold Control Act (GCA) by the family. The gold was handed over to the Central Excise department for examination under the GCA. The primary gold was seized from the family under Section 66 of the GCA, as possession, custody, and control of primary gold were forbidden under Section 8 of the Act. The family claimed that the gold belonged to specific members who had made voluntary disclosures under Section 16 of the GCA. However, the authorities held that the declarations did not save them from contravening Section 8(1) of the GCA, leading to the confiscation of the gold and imposition of a penalty.

Issue 2: Confiscation of gold and imposition of penalty
The original authority confiscated the gold under Section 71 of the GCA and imposed a personal penalty of Rs. 500 on the family. The lower appellate authority upheld this decision, leading to an appeal before the Tribunal. The appellant argued that the gold had been declared under the Voluntary Disclosure Scheme, providing immunity from penalties and prosecution. The Tribunal considered the circumstances and found that the gold was seized after the voluntary disclosure, making it immune from confiscation under the Scheme. The Tribunal allowed the appeal, stating that the appellant should receive consequential relief.

Issue 3: Interpretation of the Voluntary Disclosure Scheme
The appellant invoked the Voluntary Disclosure Scheme, claiming immunity from penalties due to the declaration of the gold under the Scheme. The appellant argued that the gold would have been converted into ornaments had it not been seized by the Central Excise Officers. The Tribunal analyzed the provisions of the Scheme, particularly Section 15A, and found that the conditions for immunity were met since the gold had been declared under the Scheme before any proceedings were initiated against the appellant.

Issue 4: Applicability of immunity provisions under the Scheme
The Tribunal compared the present case with a judgment of the Madras High Court and found the facts in favor of the appellant. The Tribunal observed that the correspondence between departments did not indicate pending proceedings under the GCA. The Tribunal emphasized that the Voluntary Disclosure Scheme applied to primary gold as well, providing immunity from confiscation if the gold had been declared under the Scheme before any actions were taken under the GCA. Consequently, the Tribunal allowed the appeal and directed the grant of consequential relief to the appellants.