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Issues Involved:
1. Shortfall in turnover. 2. Contravention of the Gold (Control) Act and Customs Act. 3. Applicability of Ministry's Circular dated 7-10-1969. 4. Rejection of renewal application and cancellation of the licence during the pendency of appeals. Issue-wise Detailed Analysis: 1. Shortfall in Turnover: The appellant was holding a gold dealer's licence and applied for its renewal. The Collector of Customs and Central Excise, Ahmedabad, issued a show cause notice citing the appellant's failure to meet the minimum turnover requirement under Rule 3(ee) of the Gold Control (Licensing of Dealers) Rules, 1969. The appellant contended that the shortfall of 2.73 grams was due to communal disturbances in Ahmedabad during 1984-85 and legal issues he faced in 1982-83. The Collector rejected this explanation, stating that the appellant did not provide sufficient reasons for the shortfall and that the turnover criterion was not met. The Tribunal found the Collector's reasoning subjective and not based on objective verification of the disturbances' impact on business. Consequently, the Tribunal set aside the Collector's finding on this issue. 2. Contravention of the Gold (Control) Act and Customs Act: The show cause notice also cited the appellant's penalization under Section 112 of the Customs Act and the Gold (Control) Act as grounds for rejecting the renewal application and cancelling the licence. The appellant argued that these penalties were related to a single transaction and that appeals against these penalties were pending. The Collector dismissed this argument, stating that the Government circulars were only for departmental guidance and not binding. The Tribunal, however, noted that the appellant's appeals were not decided on merits but were rejected due to non-payment of a deposit. It also observed that other gold dealers involved in similar allegations had their appeals allowed on merits. The Tribunal held that for a single act of contravention, especially in the absence of criminal prosecution, drastic actions like denial of renewal and cancellation of the licence were not justified. 3. Applicability of Ministry's Circular dated 7-10-1969: The appellant argued that the Ministry's Circular dated 7-10-1969, which advised against invoking cancellation provisions for minor contraventions, should have been considered. The Collector dismissed this, stating that the circular was not binding on the trade. The Tribunal, however, emphasized that administrative instructions from the Government, while not legally binding, should be given due consideration to ensure uniformity and fairness in administrative actions. The Tribunal agreed with the appellant that the circular's guidance should be followed, particularly when the contravention was minor and the appeal against the penalty was pending. 4. Rejection of Renewal Application and Cancellation of the Licence During the Pendency of Appeals: The Tribunal examined whether the licensing authority should await the final outcome of appeals before taking drastic actions like cancellation or non-renewal of licences. It referred to several precedents where it was held that the licensing authority should not deny renewal or cancel a licence based on penalties that were under appeal. The Tribunal noted that the licensing provisions should be applied cautiously, especially when the appellant had brought the pendency of appeals to the authority's notice. It concluded that the licensing authority should have awaited the appeal's outcome before deciding on the renewal and cancellation. Conclusion: The Tribunal allowed the appeal, setting aside the Collector's order. It emphasized that the appellant's explanations for the turnover shortfall were not objectively considered and that the penalties under appeal should not have led to immediate cancellation or denial of renewal. The Tribunal also stressed the need to consider Government circulars and the pendency of appeals before taking drastic administrative actions.
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