1988 (8) TMI 308 - AT - Central Excise

Summary

Issues Involved:
1. Legality of the adjudication order in light of Section 79 of the Gold (Control) Act.
2. Evidence and involvement of appellants Surendra Prasad Agarwal and Mahendra Kumar Agarwal.
3. Recovery and purity of the gold from appellants Ashok Kumar Agarwal (son of Bhaiyyalal) and Ashok Kumar Agarwal (son of Moolchand).
4. Quantum of penalties imposed on the appellants.

Issue-wise Detailed Analysis:

1. Legality of the Adjudication Order:
The appellants contended that the adjudication order was void ab initio due to a violation of the Explanation to Section 79 of the Gold (Control) Act. They argued that the Notice for fresh adjudication was issued beyond the six-month period specified from the date of the Tribunal's remand order. The Tribunal, however, rejected this argument, citing various judicial precedents. It was held that the period laid down in Section 79 affects only the seizure of the goods and not the validity of the notice. The Tribunal referenced the Supreme Court decision in Assistant Collector of Customs v. Charan Das Malhotra, which stated that the period affects only the seizure of goods and not the validity of the notice. Similar views from the High Courts of Madras, Punjab & Haryana, Bombay, and Karnataka were also cited to support this conclusion. Therefore, the Tribunal concluded that the failure to issue the notice within six months was not fatal to the adjudication proceedings.

2. Evidence and Involvement of Appellants Surendra Prasad Agarwal and Mahendra Kumar Agarwal:
The Tribunal found substantial evidence against Surendra Prasad Agarwal and Mahendra Kumar Agarwal. Statements from Ashok Kumar Agarwal (son of Bhaiyyalal) and Ashok Kumar Agarwal (son of Moolchand) indicated that Surendra Prasad Agarwal was involved in the gold smuggling operation. The statements were corroborated by bus tickets and the voluntary nature of their confessions. Mahendra Kumar Agarwal's original statement, which he later retracted, was deemed valid and reliable. The Tribunal concluded that the evidence clearly established the involvement of both Surendra Prasad and Mahendra Kumar Agarwal in the illegal transport and concealment of gold.

3. Recovery and Purity of the Gold from Appellants Ashok Kumar Agarwal (son of Bhaiyyalal) and Ashok Kumar Agarwal (son of Moolchand):
The recovery of 3,163 gms of primary gold from the possession of Ashok Kumar Agarwal (son of Bhaiyyalal) and Ashok Kumar Agarwal (son of Moolchand) was not denied. The appellants argued that the purity of the gold was taken as 24 ct based on goldsmith testing and that they were not provided with the Mint Certificate. The Tribunal noted that the Mint Certificate indicated that some of the gold was of foreign origin and that such high purity gold is not refined in India. Consequently, the Tribunal upheld the confiscation of the gold, considering its very high purity and foreign origin.

4. Quantum of Penalties Imposed on the Appellants:
The Tribunal considered the significance of the appellants' roles in the offense and the fact that the gold involved was already under absolute confiscation. The penalties on Ashok Kumar Agarwal (son of Bhaiyyalal) and Ashok Kumar Agarwal (son of Moolchand) were reduced to Rs. 10,000 each, while the penalties on Mahendra Kumar Agarwal and Surendra Prasad Agarwal were reduced to Rs. 30,000 each. The Tribunal modified the Collector's order only to this extent, upholding it otherwise.

Conclusion:
The Tribunal upheld the confiscation of the gold and reduced the penalties imposed on the appellants, affirming the legality of the adjudication proceedings and the involvement of the appellants in the gold smuggling operation.