1988 (8) TMI 241 - AT - Central Excise

Summary

Issues:
Challenge against absolute confiscation of gold ornaments and penalty under Gold (Control) Act for carrying on business without a valid license.

Analysis:
The appeal challenged the order of absolute confiscation of gold ornaments weighing 132.800 gms and a penalty of Rs. 5000 imposed under the Gold (Control) Act. The appellant contended that the seized gold ornaments were not purchased by him but were taken from a partnership firm's stock-in-trade due to a dispute. The appellant argued that since no offense was committed in relation to the seized gold, Section 71 of the Gold (Control) Act should not apply. However, it was admitted that the appellant had been transacting business in gold without a valid license in the same premises where the gold was found.

The key issue was whether the gold found in the unlicensed business premises could be seized and confiscated. The appellant's argument was that only gold acquired or sold by a person without a valid license should be liable to confiscation, not all gold found in the business premises. However, the tribunal rejected this argument, stating that dealing in gold without a valid license contravenes Section 27(1) of the Act, making all gold found in the business premises liable to confiscation under Section 71 of the Act. The tribunal emphasized that any goods found in a business premises are presumed to be for sale unless proven otherwise, shifting the burden of proof to the dealer to establish otherwise.

Ultimately, the tribunal rejected the appellant's contention and upheld the order of absolute confiscation and penalty. Considering the volume of transactions carried out by the appellant without a valid license, the tribunal found the Collector's order to be reasonable and not harsh. Therefore, the appeal was dismissed, and the order of confiscation and penalty was upheld.