1987 (8) TMI 224 - AT - Central Excise

Summary

Issues:
Renewal of gold dealer license based on turnover with persons other than licensed dealers. Interpretation of the term "wholesale dealer" in Rule 3(ee) of Gold Control (Licensing of Dealers) Rules, 1969. Applicability of the definition of "dealer" under the Gold Control Act (GCA) to the term "wholesale dealer." Consideration of turnover for license renewal under Rule 3(ee) and Explanation I thereto.

Analysis:
The case involved a dispute regarding the renewal of a gold dealer license based on turnover with persons other than licensed dealers. The Assistant Collector of Central Excise had denied renewal due to the respondent's turnover being less than 600 gms with non-licensed dealers. The respondent contended that as a manufacturer of gold ornaments for other dealers, the turnover should include the quantity manufactured for them, justifying renewal. The Collector of Customs (Appeals) accepted this argument, leading to the appeal by the department against this decision.

Upon review, the Appellate Tribunal considered the definition of "wholesale dealer" in Rule 3(ee) and the absence of a specific definition in the rule itself. The Tribunal rejected the appellant-Collector's argument that the definition of "dealer" under the GCA could not apply to "wholesale dealer" in Rule 3(ee). Citing precedent, the Tribunal emphasized that expressions in the rules should align with definitions in the parent Act unless specifically defined otherwise. The Tribunal held that the respondent, engaged in manufacturing ornaments for other dealers, could be considered a wholesale dealer, warranting license renewal.

Additionally, the Tribunal analyzed the alternate condition in Rule 3(ee) and Explanation I, defining "turnover" for license renewal. It noted that the respondent's turnover with non-licensed dealers was nil due to manufacturing for other dealers, meeting the condition of turnover not exceeding 50 gms per month. The Tribunal concluded that the respondent's turnover satisfied the requirements for license renewal under Rule 3(ee, leading to the rejection of the appeal by the department.

In summary, the judgment clarified the interpretation of "wholesale dealer" in the context of license renewal criteria, emphasizing the relevance of manufacturing activities for other dealers in determining turnover. The Tribunal's decision highlighted the importance of aligning rule expressions with statutory definitions and considering all aspects of turnover in license renewal assessments.