1986 (1) TMI 304 - AT - Central Excise

Summary

Issues:
1. Determination of seized items as primary gold or ornaments under the Gold (Control) Act, 1968.
2. Appeal against the order of confiscation and penalty imposed under Sections 7(1) and 74 of the Act.
3. Transfer of appeal to the Appellate Tribunal under Section 82K of the Act.
4. Dismissal of the appeal by the Tribunal based on the nature of the seized goods.
5. Reference of questions of law to the High Court under Section 82(B) of the Act.

Analysis:
The case involved the seizure of gold items by the Collector of Central Excise, which were claimed to be old ornaments used by the appellant's joint family. However, upon examination, the Collector found the items to be new and unfinished, not suitable for use as ornaments. The Collector determined the goods as primary gold due to their malleability and lack of finished form, leading to confiscation under Section 7(1) of the Gold (Control) Act, 1968, along with a penalty of Rs. 20,000 imposed under Section 74 of the Act.

The appellant appealed the Collector's order to the Gold Control Administrator, which was later transferred to the Appellate Tribunal under Section 82K of the Act. The Tribunal, after examining the seized goods, concluded that the items did not qualify as ornaments but rather constituted primary gold as per Section 2(r) of the Act. The Tribunal highlighted the softness, improper alignment, and lack of design in the items, supporting its decision to uphold the confiscation.

Subsequently, the Tribunal dismissed the appeal based on the nature of the goods, emphasizing their characteristics that aligned more with primary gold than finished ornaments. The Tribunal's decision was based on the weight, softness, manner of manufacture, and circumstances of seizure of the items, leading to the conclusion that the goods did not meet the definition of ornaments under the Act.

Following the dismissal of the appeal, the applicants sought a reference to the High Court under Section 82(B) of the Act, raising questions regarding the Tribunal's acceptance of expert opinion, the classification of the goods as primary gold, the justification for absolute confiscation without redemption option, and the sustenance of the personal penalty. These questions were referred to the High Court for further legal interpretation and clarification.