1988 (5) TMI 269 - AT - Central Excise

Summary

Issues:
1. Imposition of penalty under Section 74 of the Gold (Control) Act, 1968 on the appellant.
2. Reliance on retracted confessional statement as the sole basis for proving charges.
3. Violation of principles of natural justice in the impugned order.
4. Lack of corroborative evidence against the appellant.
5. Benefit of doubt in favor of the appellant.

Analysis:

1. The appeal was against the penalty imposed on the appellant under Section 74 of the Gold (Control) Act, 1968. The appellant, a licensed gold dealer, was found connected to gold ornaments recovered from an individual, Chidambaram, who initially claimed the ornaments belonged to the appellant but later retracted his statement. The proceedings resulted in the confiscation of the ornaments with an option to redeem them. The appeal focused solely on the penalty under the Act.

2. The appellant contended that the charge against him relied heavily on the retracted statement of Chidambaram, without any supporting evidence. The appellant argued that penal proceedings cannot be based solely on a retracted confessional statement, citing legal precedents. The appellant also raised concerns about the lack of disclosure of certain evidence, specifically chits recovered from Chidambaram, which were not provided to the appellant as part of the evidence against him.

3. The appellant further argued that even if the chits were considered, they did not align with the ornaments under seizure in terms of quantity or weight. The appellant emphasized the violation of principles of natural justice due to the non-disclosure of crucial evidence and lack of corroborative evidence linking him to the alleged offense. The appellant's counsel highlighted the importance of fair procedures and the need for evidence to be explicitly presented in the show cause notice.

4. The adjudicating authority and the lower appellate authority had relied on the retracted statement of Chidambaram and the chits as evidence against the appellant. However, the appellate tribunal found that apart from the retracted statement, there was no other evidence connecting the appellant to the offense. The tribunal emphasized that penal actions cannot be solely based on retracted statements without corroborative evidence. The tribunal also noted that the chits were not proven to be written by the appellant and did not align with the seized ornaments.

5. Ultimately, the tribunal ruled in favor of the appellant, giving him the benefit of the doubt due to the lack of substantial evidence against him. The tribunal concluded that the retracted statement and the chits were insufficient to prove the charges, and exonerated the appellant of all accusations. The impugned order imposing the penalty was set aside, and the appeal was allowed in favor of the appellant.