1988 (4) TMI 297 - AT - Customs

Issues Involved:
1. Renewal of Gold Dealer's Licence
2. Contraventions of the Gold (Control) Act
3. Pendency of Appeals
4. Administrative Instructions and Circulars
5. Consequences of Licence Rejection or Cancellation

Issue-wise Detailed Analysis:

1. Renewal of Gold Dealer's Licence:
The primary issue revolves around the renewal of the Gold Dealer's Licence held by the respondents. The respondents applied for renewal in 1986 for a period ending on 31-12-1989. The Deputy Collector of Customs rejected the renewal application based on prior contraventions of the Gold (Control) Act. The Collector of Customs (Appeals) reversed this decision, emphasizing that the penalties relied upon had not become final as appeals were pending. The refusal to renew the licence was deemed a harsh punishment, only suitable for extreme cases.

2. Contraventions of the Gold (Control) Act:
The respondents had two prior instances of contravention:
- In 1983, 491.500 grams of gold valued at Rs. 68,277/- was seized, resulting in penalties under the Gold (Control) Act and the Customs Act.
- In 1985, 1690.300 grams of gold valued at Rs. 2,48,400/- was seized, leading to confiscation and penalties.
The Deputy Collector rejected the renewal application based on these contraventions, arguing that the respondents were repeatedly indulging in infractions of the Gold Control Law.

3. Pendency of Appeals:
The respondents contended that the penalties and fines imposed were under appeal and had not become final. The Collector of Customs (Appeals) agreed, stating that the renewal application should not be rejected until the appeals were resolved. The Tribunal upheld this view, noting that the adjudicating authority should await the final outcome of the appeals before taking action on the renewal application.

4. Administrative Instructions and Circulars:
Several administrative instructions and circulars from the Government of India were considered:
- A letter dated 9-7-1986 instructed that licences of gold dealers who violated the Gold Control Rules could not be renewed.
- A subsequent letter dated 27-2-1987 emphasized that cancellation or non-renewal of licences should be approached with caution and should consider the merits of each case.
- The Working Group on Gold Control Machinery recommended that licences should have permanent validity and only be cancelled upon conviction by a court of law.

5. Consequences of Licence Rejection or Cancellation:
Rejection of the renewal application would require the licensee to sell or transfer all gold in their possession within 30 days, effectively amounting to a cancellation. The Tribunal emphasized that the consequences of non-renewal are severe and should not be imposed lightly. The licensing authority should consider suspension as an interim measure if the licensee is a habitual offender or if prosecution is pending.

Conclusion:
The Tribunal concluded that the licensing authority should not reject the renewal application solely based on pending adjudications. The authority should await the final outcome of the appeals. The Tribunal upheld the order of the Collector of Customs (Appeals), emphasizing that the refusal to renew a licence should be reserved for serious and persistent contraventions and not for trivial breaches. The appeal by the Collector of Customs (Preventive), Bombay, was rejected.

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