1988 (3) TMI 349 - AT - Customs

Issues Involved:

1. Confiscation of primary gold and gold ornaments.
2. Penalty imposed on Ratan Jewellers and Kiran Kumar.
3. Compliance with Sections 27(1), 27(7)(b), 55(1), 55(2), and Section 36 read with Rule 13 of the Gold (Control) Act, 1968.
4. Validity of purchase order and vouchers.
5. Quantum of fine and penalty.

Issue-Wise Detailed Analysis:

1. Confiscation of Primary Gold and Gold Ornaments:

The adjudicating authority confiscated 12.350 gms of primary gold and 340 pieces of gold ornaments weighing 1097.000 gms. The primary gold was absolutely confiscated under Section 71, while the ornaments were allowed for redemption on payment of a fine under Section 73. The authorities also confiscated 23.300 gms of gold ornaments, allowing redemption on payment of a fine. The gold and ornaments were seized from the residential premises of appellant Hirachand, who failed to account for them satisfactorily.

2. Penalty Imposed on Ratan Jewellers and Kiran Kumar:

A penalty of Rs. 50,000 was imposed on Ratan Jewellers and Rs. 5,000 on Kiran Kumar under Section 74. The tribunal found the penalty on Ratan Jewellers excessive and reduced it to Rs. 10,000. Kiran Kumar was exonerated as there was no specific evidence against him, and he was merely carrying the gold ornaments and vouchers handed over by his father.

3. Compliance with Sections 27(1), 27(7)(b), 55(1), 55(2), and Section 36 read with Rule 13:

The appeal was not contested on merits regarding the charges under Sections 55(1), 55(2), and Section 36 read with Rule 13. The tribunal found that Section 27(1), which deals with conducting business without a license, was not applicable as Ratan Jewellers had a valid license. The charge under Section 27(7)(b) was upheld, as the evidence did not support the claim that the gold ornaments were dispatched based on a legitimate purchase order.

4. Validity of Purchase Order and Vouchers:

The purchase order from Jashko Fashion Jewellers was deemed vague and not specific about the nature, design, and purity of the ornaments. The vouchers issued by Ratan Jewellers were found to contain irregularities, and the credit bill did not reference the purchase order. The tribunal concluded that the purchase order was not related to the seized ornaments, and the evidence supported the charge under Section 27(7)(b).

5. Quantum of Fine and Penalty:

The tribunal reduced the fine for redemption of 1097.000 gms of gold ornaments from Rs. 1,50,000 to Rs. 75,000. The absolute confiscation of 12.350 gms of primary gold was modified, allowing redemption on payment of a fine of Rs. 2,500. The penalty on Ratan Jewellers was reduced from Rs. 50,000 to Rs. 10,000. The tribunal directed Ratan Jewellers to convert the primary gold into ornaments within a specified period and report compliance.

Conclusion:

The tribunal upheld the charges of contravention except for Section 27(1) and reduced the penalties and fines imposed on Ratan Jewellers. Kiran Kumar was exonerated, and the appeal of Hirachand was dismissed as the seized gold and ornaments were deemed part of Ratan Jewellers' stock in trade.

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