1988 (3) TMI 267 - AT - Central Excise

Summary

Issues Involved:
1. Procedural defect in the initial appeal.
2. Excess physical stock of gold ornaments.
3. Confiscation of gold ornaments.
4. Imposition of fine and penalty.
5. Credibility of the defense's explanation.
6. Impact of criminal court acquittal on adjudication proceedings.

Detailed Analysis:

Procedural Defect in the Initial Appeal:
The appellants initially filed a single appeal before the Gold Control Administrator, which was later transferred to the Tribunal and registered separately due to procedural defects. The two appeals, arising from the same order and involving common questions of law and facts, were clubbed and heard together.

Excess Physical Stock of Gold Ornaments:
On 13-2-1979, Gold Control Officers visited the licensed premises of M/s. Anand Jewellers and found a discrepancy between the physical stock of new gold ornaments (2,753.500 gms) and the stock recorded in the G.S. 12 register (1,038.650 gms). The manager and the accountant present could not satisfactorily explain the excess stock, leading to the seizure of the unrecorded gold ornaments.

Confiscation of Gold Ornaments:
Following the investigation, the Collector of Central Excise and Customs ordered the confiscation of the seized gold ornaments valued at Rs. 1,35,180/- but allowed redemption on payment of a fine of Rs. 50,000/-. Additionally, a penalty of Rs. 10,000/- was imposed on the appellant Dinesh Kumar Samadadiya.

Imposition of Fine and Penalty:
The appellants argued that the fine and penalty were excessive. However, the Tribunal upheld the Collector's order, emphasizing the false defense put forth by the appellants and the object of the Gold (Control) Act, which justified the imposition of the fine and penalty.

Credibility of the Defense's Explanation:
The appellants claimed that the excess gold was purchased by Dinesh Kumar on 13-2-1979 and sent to the licensed premises through his nephew Girish. The Tribunal found this defense highly improbable and unbelievable due to inconsistencies and lack of corroborative evidence. The statements of the shop's manager, accountant, and Dinesh Kumar's father did not support the defense's version. The Tribunal concluded that the defense was fabricated for the case.

Impact of Criminal Court Acquittal on Adjudication Proceedings:
The appellants argued that Dinesh Kumar's acquittal in a criminal case should influence the adjudication proceedings. The Tribunal rejected this argument, citing the independent nature of criminal prosecution and adjudication proceedings. The standards of proof and the nature of evidence required in each are different. The Tribunal referred to the Bombay High Court's judgment in Maneklal Pokhraj Jain's case, which established that findings in criminal proceedings do not bind adjudicating authorities.

Conclusion:
The Tribunal dismissed both appeals, confirming the confiscation of the gold ornaments, the fine of Rs. 50,000/- in lieu of confiscation, and the penalty of Rs. 10,000/-. The defense's explanation was deemed unbelievable, and the impact of the criminal court's acquittal was found to be irrelevant to the adjudication proceedings.