1987 (7) TMI 306 - AT - Central Excise

Summary

Issues:
- Appeal filed for enhancing penalty under the Gold Control Act, 1968 on respondents for possessing contraband gold.
- Absence of respondents during proceedings.
- Consideration of penalty amount and role of respondents in transporting contraband gold.
- Legal correctness of the Collector's order and the Tribunal's power to enhance penalty under Section 81A of the Gold Control Act, 1968.

Analysis:
The judgment concerns appeals filed by the Collector of Central Excise, Madras, seeking to enhance the penalty on the respondents under the Gold Control Act, 1968. The case originated from the recovery of 10 gold biscuits with foreign markings from each respondent at the Madras Central Railway Station. The respondents confessed that they were carriers for a person named Choksi. The Collector of Central Excise confiscated the gold biscuits and imposed a penalty of Rs. 30,000/- each under the Customs Act and the Gold Control Act on the respondents. The appeals were filed for increasing this penalty amount.

The respondents did not participate in the proceedings, rendering the impugned order ex parte. The Senior D.R. argued that the penalty was low considering the value of the contraband gold carried by the respondents. However, the Tribunal, after reviewing the records, noted that the respondents were mere carriers for Choksi and had not benefited significantly from the smuggling operation. The Tribunal emphasized the distinction between the main offender and carriers, highlighting that imposing a higher penalty on carriers, who act for minor financial gain, would not be practically beneficial, especially if no amount has been recovered from them.

The Tribunal deliberated on the legality and propriety of the Collector's order and the Tribunal's authority to enhance penalties under Section 81A of the Gold Control Act, 1968. It emphasized that the imposition of penalties involves quasi-judicial discretion, which can be challenged only if it is patently perverse or demonstrably arbitrary. In this case, considering the respondents' limited role as carriers, the Tribunal concluded that enhancing the penalty would not serve the intended purpose. Instead, it suggested initiating criminal proceedings against such carriers to deter future offenses effectively. As the respondents were deemed to have minimal assets and unknown whereabouts, the Tribunal rejected the appeals, affirming the Collector's order without modification.