1988 (2) TMI 343 - AT - Central Excise

Summary

Issues:
Cancellation of gold dealers' license under Section 50(1A) of the Gold (Control) Act, 1968 based on involvement in a case relating to primary gold recovery; Confiscation and penalty imposition on partners and firm; Conviction and sentencing of partners in the Court of Law; Appeal against penalty imposition; Reduction of redemption fine and personal penalties by the Government of India; Claimants' identity in respect of the gold; Acquittal of appellants by the Additional Sessions Judge; Relevant considerations for cancellation of license under Section 50(1A).

Analysis:
The appeal challenged the cancellation of the gold dealers' license by the Collector of Customs (Preventive) Bombay under Section 50(1A) of the Gold (Control) Act, 1968 due to the appellants' involvement in a case concerning the recovery of primary gold. The search revealed primary gold concealed on the partners of the firm, leading to confiscation of gold and penalties under Section 74 of the Act. The firm and partners were penalized, with the penalty on the firm set aside in appeal but confirmed for the partners. The partners were also prosecuted and convicted in the Court of Law, resulting in fines and imprisonment.

The appellants contended that the penalty on the firm should be dropped due to the appeal outcome and leniency shown by the Government of India in reducing fines and penalties. They highlighted the identity of claimants for the gold, the views expressed by the Metropolitan Magistrate regarding the seriousness of the offence, and the subsequent acquittal by the Additional Sessions Judge. The appellants argued that the facts had significantly changed post the acquittal, warranting a reconsideration of the license cancellation.

Upon careful consideration, the Tribunal noted the penalties imposed on the partners and the prosecution proceedings, which were based on the facts as they stood at that time. However, the subsequent orders passed by the Government of India in revision and the acquittal by the Court of Sessions indicated a shift in circumstances. The Tribunal emphasized that cancellation of a license under Section 50(1A) should be reserved for grave offences, which was not the case here. Given the leniency shown by the authorities and the changed circumstances, the Tribunal set aside the Collector's orders and allowed the appeal, concluding that cancellation of the license was not warranted in this case.