1988 (11) TMI 253 - AT - Central Excise

Issues Involved:
1. Confiscation of gold and gold ornaments.
2. Imposition of penalties under the Customs Act, 1962 and the Gold (Control) Act, 1968.
3. Admissibility and evidentiary value of inculpatory statements.
4. Claims of ownership by third parties.
5. Quantum of fines and penalties.
6. Charge of abetment against appellant Chandra Kumar.

Issue-wise Detailed Analysis:

1. Confiscation of Gold and Gold Ornaments:
The appeals were directed against the absolute confiscation of gold with foreign markings and gold coins under Section 111(d) and imposition of penalties under Section 112 of the Customs Act, 1962. Additionally, fines were imposed under Section 73 in lieu of confiscation of new and old gold ornaments under the Gold (Control) Act, 1968. The appellants, brothers residing in the same house, were found in possession of various gold items and Indian currency during a search by Central Excise authorities. The authorities seized the items as they believed the gold was not accounted for in the statutory accounts and the currency represented the sale proceeds of contraband gold.

2. Imposition of Penalties:
Penalties were imposed on appellant Murugesan and Chandra Kumar under Sections 73 and 74 of the Gold (Control) Act, 1968. The tribunal confirmed the findings of the adjudicating authority regarding the penalties imposed on appellant Murugesan but reduced the penalty under the Customs Act, 1962 to Rs. 1,000. The fine imposed under the Gold (Control) Act was reduced from Rs. 5,00,000 to Rs. 3,00,000, and the penalty under the same act was reduced to Rs. 75,000.

3. Admissibility and Evidentiary Value of Inculpatory Statements:
The appellants argued that the inculpatory statements recorded from appellant Murugesan and corroborated by Chandra Kumar had no evidentiary value as they were not furnished with copies of the statements at the time of issuing the Show Cause Notice. The tribunal, however, found the statements to be voluntary and true, noting that the appellants did not react to the statements until after receiving the Show Cause Notice. The tribunal held that the total inaction on the part of the appellants in not reacting to the inculpatory statements was consistent with their guilt.

4. Claims of Ownership by Third Parties:
The appellants claimed that the gold and ornaments belonged to various third parties, relying on the proviso to Section 71 of the Gold (Control) Act. However, the tribunal found this claim to be unsupported, noting that appellant Chandra Kumar had claimed ownership of the gold and ornaments in a petition dated 14-4-87. The tribunal held that the claims of third parties were discredited and irrelevant in the context of the case.

5. Quantum of Fines and Penalties:
The tribunal considered the value and purity of the gold and ornaments and the option of redemption granted to appellant Murugesan regarding two gold coins. The fine imposed by the adjudicating authority was reduced from Rs. 5,00,000 to Rs. 3,00,000, and the penalty under the Gold (Control) Act was reduced to Rs. 75,000. The tribunal directed appellant Murugesan to exercise the option of redemption within two months and convert the primary gold and gold coins into ornaments as per law.

6. Charge of Abetment Against Appellant Chandra Kumar:
The tribunal found that the charge of abetment against appellant Chandra Kumar was not supported by evidence. It noted that appellant Chandra Kumar had initially claimed ownership of the gold and ornaments and later shifted the ownership to various third parties. The tribunal held that the subsequent conduct of appellant Chandra Kumar in fabricating documents did not make him an abettor, as the acquisition of gold and ornaments had taken place previously. The tribunal exonerated appellant Chandra Kumar of the charge of abetment and set aside the penalty imposed on him.

Conclusion:
The appeals of appellant Murugesan under the Gold (Control) Act and the Customs Act, 1962 were dismissed, and the Miscellaneous Application was also dismissed. The appeal of appellant Chandra Kumar under the Gold (Control) Act was allowed.

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