1989 (7) TMI 233 - AT - Central Excise

Issues Involved:
1. Confiscation of gold and gold ornaments under Section 71 of the Gold Control Act.
2. Imposition of penalty for contravention of Section 74 of the Gold Control Act.
3. Legality of maintaining a private account book instead of GS 13 register.
4. Determination of whether the appellant was dealing in gold without a license under Section 27 of the Gold Control Act.
5. Appropriateness of the redemption fine and penalty imposed.

Detailed Analysis:

1. Confiscation of Gold and Gold Ornaments under Section 71 of the Gold Control Act:
The appellant, a licensed goldsmith and pawn broker, had his shop raided by Central Excise officers, resulting in the seizure of 469 grams of gold and gold ornaments. The Collector of Central Excise confiscated these items under Section 71 of the Gold Control Act but allowed for their redemption upon payment of a fine of Rs. 20,000 under Section 73. The appellant argued that the seized gold belonged to his customers and was not for unauthorized dealing.

2. Imposition of Penalty for Contravention of Section 74 of the Gold Control Act:
The appellant was penalized Rs. 2,00,000 for allegedly violating various provisions of Section 74 of the Act. The appellant contended that his non-maintenance of the GS 13 register was due to illiteracy and old age, and that he had maintained a private account book instead. He argued that this was a technical fault and did not warrant such a high penalty.

3. Legality of Maintaining a Private Account Book Instead of GS 13 Register:
The appellant admitted to not maintaining the GS 13 register but claimed to have kept a private account book with similar entries. The Collector dismissed this book as an "afterthought" and did not consider it in his decision. The Tribunal found this to be an error, noting that the appellant had mentioned the private account book during the raid and had produced it later.

4. Determination of Whether the Appellant Was Dealing in Gold Without a License under Section 27 of the Gold Control Act:
The Tribunal emphasized that to prove a violation of Section 27, the department needed to show a series of transactions indicating that the appellant was dealing in gold without a license. The appellant, being a licensed goldsmith and pawn broker, was entitled to possess gold for making new ornaments and as security for loans. The Tribunal noted that the seized private account books did not indicate unauthorized dealing in gold. Citing various judgments, the Tribunal reiterated that mere possession or suspicion could not replace proof of actual trading.

5. Appropriateness of the Redemption Fine and Penalty Imposed:
The Tribunal agreed with the appellant's counsel that the redemption fine of Rs. 20,000 was excessive compared to the value of the seized gold (Rs. 18,408). The Tribunal reduced the redemption fine to Rs. 18,408 and the penalty for not maintaining the GS 13 register to Rs. 5,000, considering the appellant's illiteracy and old age. The Tribunal also noted that the appellant's legal heirs should be allowed to redeem the gold upon payment of the reduced fine and penalty.

Conclusion:
The appeal was partly allowed, with the redemption fine being reduced to Rs. 18,408 and the penalty reduced from Rs. 2,00,000 to Rs. 5,000. The legal heirs of the appellant were authorized to redeem the seized gold upon payment of the modified fines.

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