1986 (3) TMI 241 - AT - Customs

Issues Involved:
1. Confiscation of gold/gold ornaments under Section 71 of the Gold (Control) Act.
2. Imposition of penalty under Section 74 of the Gold (Control) Act.
3. Violation of Section 55 of the Gold (Control) Act.
4. Technical nature of the violation.
5. Adequacy and plausibility of explanations provided by the appellant firm.

Detailed Analysis:

1. Confiscation of gold/gold ornaments under Section 71 of the Gold (Control) Act:

The appeal challenges the Order-in-Original No. 6/85 dated 22-8-1985, wherein the Collector of Central Excise, New Delhi, ordered the confiscation of 267 pieces of gold/gold ornaments weighing 1989.700 gms. found in the appellant firm's premises. The confiscation was based on the contravention of Sections 8, 33, 36, and 55 of the Gold (Control) Act, read with Rules 11 and 13 of the Gold (Forms, Fees & Misc. Matters) Rules, 1968. The appellant firm contended that the gold was received on the morning of 1-12-1984 but could not be recorded in the statutory books due to the immediate search and seizure conducted in the afternoon.

2. Imposition of penalty under Section 74 of the Gold (Control) Act:

The Collector also imposed a penalty of Rs. 50,000/- under Section 74 of the Gold (Control) Act. The appellant firm argued that the penalty was excessive, given the circumstances, and sought leniency. The lower authority found the firm guilty only under Section 55 of the Act, exonerating them from charges under Sections 8, 33, and 36.

3. Violation of Section 55 of the Gold (Control) Act:

Section 55 mandates that entries regarding the receipt or sale of gold should be made in the statutory register as and when the transactions occur. The appellant firm admitted to the failure to make timely entries, attributing it to the absence of their part-time Munim, who usually came in the afternoon. The Tribunal acknowledged that while the failure to make immediate entries constituted a violation, it was not of a serious nature given the specific circumstances.

4. Technical nature of the violation:

The appellant firm argued that the violation was of a technical nature, as the gold was received on the same day as the raid, and the Munim responsible for making the entries was not present. The Tribunal agreed that the violation was technical, citing previous cases such as M/s. Kailash Jewellery House v. Collector of Central Excise, where similar circumstances led to the setting aside of confiscation orders and reduction of penalties.

5. Adequacy and plausibility of explanations provided by the appellant firm:

The Tribunal considered the explanations provided by the appellant firm plausible, noting that the gold was covered by vouchers and the transactions were verified. The absence of the Munim and the immediate timing of the raid were deemed reasonable explanations for the delay in making entries. The Tribunal referenced several cases, including Kewal Krishan Butta and Bishan Dass Butta v. Collector of Central Excise & Customs, where penalties were reduced due to the technical nature of the violations and the lack of evidence of clandestine disposal of gold.

Conclusion:

The Tribunal partially accepted the appeal, setting aside the confiscation of the gold/gold ornaments due to the technical nature of the violation and the plausibility of the explanations provided by the appellant firm. The penalty imposed was reduced from Rs. 50,000/- to Rs. 5,000/-, emphasizing the need for the appellant firm to remain vigilant in future. The impugned order of the Collector was modified to this extent.

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