1987 (5) TMI 354 - AT - Central Excise

Benefit of doubts available to pawn broker against charge of dealing in gold without licence

Summary

Issues:
1. Appeal against order imposing fine and penalty under Gold Control Act, 1968.
2. Allegation of dealing in gold ornaments without a license.
3. Application of Section 27(1) and Section 6(2) of the Act.
4. Lack of evidence to sustain charges.
5. Interpretation of legal provisions and case law.
6. Benefit of doubt in favor of the appellant.

Analysis:
The appeal before the Appellate Tribunal CEGAT, Madras challenged an order imposing a fine and penalty under the Gold Control Act, 1968. The appellant, a pawn broker, was found with seized gold ornaments, leading to allegations of dealing without a license. The appellant argued that there was no concrete evidence to prove the charge under Section 27(1) of the Act. The Departmental Representative contended that the appellant could be liable under Section 6(2) for not accounting for the ornaments as per law.

The Tribunal noted that the show cause notice did not specifically mention the charge under Section 6(2), and without proper notification, the appellant could not be penalized under that section. The crucial issue was whether there was enough evidence to support a contravention under Section 27(1) against the appellant. The original order highlighted discrepancies in the seized ornaments, emphasizing their newness and mismatch with pawn tickets. However, the Tribunal observed that possession of unaccounted jewels alone does not establish the appellant as a dealer in gold, as per legal precedents.

Referring to a relevant case law, the Tribunal emphasized that mere suspicion or possession of unaccounted items does not equate to dealing as a gold dealer under the Act. In this case, apart from the lack of proper accounting, there was no substantial evidence indicating the appellant's involvement in the business of gold dealing. As the charge under Section 27(1) required concrete proof of dealing as a dealer without a license, the Tribunal found in favor of the appellant due to the absence of specific charges and evidence. Consequently, the Tribunal exonerated the appellant of the charge under Section 27(1) and allowed the appeal, granting the appellant the benefit of doubt based on the circumstances and legal requirements.