1988 (10) TMI 208 - AT - Central Excise

Issues Involved:

1. Confiscation of seized gold ornaments under Section 71 of the Gold (Control) Act, 1968.
2. Imposition of a redemption fine of Rs. 1,00,000/-.
3. Imposition of a penalty of Rs. 25,000/-.
4. Non-production of statutory records as required by Gold Control Officers.
5. Validity of the defense regarding the loss and recovery of records.
6. Discrepancy in the purity of the gold ornaments.
7. Whether the seized gold was covered by valid purchase and issue vouchers.

Issue-wise Detailed Analysis:

1. Confiscation of Seized Gold Ornaments:

The appellant firm challenged the confiscation of gold ornaments under Section 71 of the Gold (Control) Act, 1968. The gold ornaments were seized because they were found to be of 23 carats purity, not 22 carats as mentioned in the issue voucher. The adjudicating authority disbelieved the defense's claim that the statutory records were lost and later found, deeming the records produced as unreliable and distinctly bogus. Consequently, the adjudicating authority ordered the confiscation of the seized gold ornaments.

2. Imposition of Redemption Fine:

The adjudicating authority imposed a redemption fine of Rs. 1,00,000/- on the appellant firm for the seized gold ornaments. This imposition was based on the finding that the statutory records were unreliable, and the gold ornaments were not of the purity stated in the issue voucher.

3. Imposition of Penalty:

A penalty of Rs. 25,000/- was imposed on the appellant firm. The adjudicating authority found that the defense's explanation regarding the loss and recovery of records was not credible, leading to the imposition of the penalty.

4. Non-production of Statutory Records:

The appellant firm failed to produce the purchase vouchers and G.S.-11 and G.S.-12 Registers when required by the authorities. The defense claimed that the records were lost and later recovered from the police. However, the adjudicating authority found this explanation suspicious and not credible.

5. Validity of Defense Regarding Loss and Recovery of Records:

The defense argued that the records were genuinely lost and later recovered. They presented a statement from Rakesh Gupta, who initially stated that he deposited the lost bag at the police station under coercion but later retracted his statement. The adjudicating authority did not find this defense credible and deemed the records produced as unreliable.

6. Discrepancy in Purity of Gold Ornaments:

The gold ornaments were found to be of 23 carats purity, not 22 carats as mentioned in the issue voucher. The defense argued that the discrepancy could be due to the time of examination by the experts, as the best test of purity on the basis of the touch-stone method is in sunlight, whereas the goods were examined in artificial light during the evening.

7. Validity of Purchase and Issue Vouchers:

The defense argued that the seized gold ornaments were covered by a valid issue voucher and purchase vouchers. They presented various vouchers, cash books, and statutory records to support their claim. The adjudicating authority, however, found the records unreliable and deemed the defense's explanation as a make-believe story.

Judgment:

The tribunal found that the defense's plea regarding the loss and recovery of records raised suspicion but noted that the gold ornaments were accompanied by a valid issue voucher. The records produced by the appellant appeared to have been maintained in the normal course, and there was no evidence to suggest that these records were manipulated. Therefore, the tribunal held that the gold ornaments were duly covered by purchase and issue vouchers and were not liable to confiscation merely for the technical lapse of not immediately producing the records.

The tribunal upheld that the lapse for non-production of documents was covered under Section 64 of the Gold (Control) Act, and the maximum penalty for this contravention was Rs. 1,000/-. Consequently, the tribunal reduced the penalty from Rs. 25,000/- to Rs. 1,000/- and set aside the confiscation of the gold ornaments and the redemption fine.

Conclusion:

The confiscation of the gold ornaments and the redemption fine of Rs. 1,00,000/- were set aside. The penalty was reduced from Rs. 25,000/- to Rs. 1,000/- for the contravention of Section 64 of the Gold (Control) Act. The appeal was disposed of accordingly.

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