1988 (8) TMI 287 - AT - Central Excise

Issues Involved:
1. Seizure and confiscation of gold ornaments without notice to owners.
2. Rebuttable presumption under Section 99 vs. rights under Section 79 of the Gold Control Act.
3. Rejection of affidavit evidence without summoning deponents.
4. Imposition of separate fines on the firm and its partners.
5. Ignoring statements and affidavits confirming ownership of the gold ornaments.
6. Jurisdiction and legal personality of a partnership firm under the Gold Control Act.

Issue-wise Detailed Analysis:

1. Seizure and Confiscation of Gold Ornaments Without Notice to Owners:
The applicants contended that the gold ornaments seized belonged to different customers, and thus, show cause notices should have been issued to these customers before confiscation, as mandated by Section 79 of the Gold (Control) Act, 1968. However, the Tribunal found that the applicants failed to establish to the satisfaction of the adjudicating authority that the seized gold ornaments belonged to the alleged customers. The Tribunal noted that during the entire adjudication proceedings, no customer came forward to claim the gold ornaments. Therefore, the question of issuing any notice under Section 79 did not arise. The Tribunal concluded that this issue related to the appreciation of evidence and did not merit any reference.

2. Rebuttable Presumption Under Section 99 vs. Rights Under Section 79 of the Gold Control Act:
The applicants argued that the presumption of ownership under Section 99 should not render otiose the rights guaranteed by Section 79. The Tribunal clarified that this specific argument was not raised during the original hearing. The Tribunal held that the question of the interplay between Sections 99 and 79 was never argued and thus did not arise out of the Tribunal's order. Consequently, this issue did not merit any reference.

3. Rejection of Affidavit Evidence Without Summoning Deponents:
The applicants contended that the Collector and the Tribunal were not justified in rejecting affidavit evidence without summoning the deponents. The Tribunal emphasized that affidavits should not be accepted as a general rule without considering the facts and circumstances of each case. The Tribunal referenced the Supreme Court's judgment in Mehta Parekh & Co. v. Income Tax Commissioner, which stated that affidavits could be challenged and their veracity tested. The Tribunal found that the affidavits were not reliable due to inconsistencies and the inordinate delay in their submission. Therefore, the rejection of affidavits was justified, and no question of law meriting any reference arose.

4. Imposition of Separate Fines on the Firm and Its Partners:
The applicants argued that imposing separate fines on the firm and its partners was contrary to the Partnership Act and amounted to double jeopardy. The Tribunal noted that this argument was not raised during the original hearing. Additionally, the Tribunal referenced the Supreme Court's judgment in Rai Bahadur v. Director of Enforcement, which upheld the imposition of penalties on a partnership firm. The Tribunal also cited a Division Bench of the Delhi High Court in Talwar Diamonds v. Union of India, which recognized a firm as a legal entity under the Gold (Control) Act. Consequently, the Tribunal concluded that this issue did not merit any reference as it did not arise out of the original order.

5. Ignoring Statements and Affidavits Confirming Ownership of the Gold Ornaments:
The applicants argued that the Tribunal overlooked the statements and affidavits confirming the ownership of the gold ornaments by various customers. The Tribunal found that the affidavits and statements were not reliable due to inconsistencies and the lack of corroborative evidence. The Tribunal emphasized that the affidavits were submitted after a significant delay and without any explanation. The Tribunal concluded that the rejection of these affidavits was based on the appreciation of evidence and did not raise any question of law meriting reference.

6. Jurisdiction and Legal Personality of a Partnership Firm Under the Gold Control Act:
The applicants contended that a partnership firm does not have a separate legal existence and thus cannot be penalized separately from its partners. The Tribunal referenced the Delhi High Court's judgment in Talwar Diamonds v. Union of India, which held that a firm is a legal entity under the Gold (Control) Act. The Tribunal also cited the Supreme Court's judgment in Rai Bahadur v. Director of Enforcement, which recognized the imposition of penalties on partnership firms. The Tribunal concluded that this issue did not merit any reference as it did not arise out of the original order.

Conclusion:
The Tribunal dismissed all the applications, concluding that no question of law meriting any reference arose out of the order passed by the Tribunal on 31.8.1987. The issues raised by the applicants were primarily related to the appreciation of evidence and were adequately addressed in the original order.

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