1989 (7) TMI 267 - AT - Customs

Summary

Issues:
- Confiscation of primary gold
- Validity of show cause notice
- Ownership claims of gold
- Compliance with Gold (Control) Act
- Imposition of personal penalty

Confiscation of primary gold:
The appellant's residential premises were searched, leading to the discovery of 293.100 gms of primary gold and 1976.000 gms of gold ornaments. The appellant, a licensed goldsmith, claimed the primary gold belonged to customers for new ornaments. Despite the appellant's explanations, the authorities confiscated the primary gold under the Gold (Control) Act, leading to the appeal against the order.

Validity of show cause notice:
The appellant waived a written show cause notice but argued that an oral notice should have been provided. The appellant had submitted detailed arguments, indicating awareness of the charges against him. The tribunal found that the appellant was adequately informed of the charges, satisfying statutory requirements, thus rejecting the contention of inadequate notice.

Ownership claims of gold:
The appellant later claimed that the primary gold belonged to customers, supported by letters and affidavits from the customers. The tribunal noted that the customers demanded to be heard before any confiscation order but were not served show cause notices. The failure to issue notices to the claimants rendered the confiscation order invalid under the Gold (Control) Act.

Compliance with Gold (Control) Act:
The appellant, as a licensed goldsmith, failed to maintain proper accounts and records as required by the Gold (Control) Act. This non-compliance led to a contravention of Section 55 of the Act. The tribunal acknowledged the appellant's lapse in maintaining accounts but reduced the personal penalty from Rs. 5000 to Rs. 1000 due to the appellant's inactive business status and the small quantity of gold involved.

Imposition of personal penalty:
The tribunal held that the personal penalty imposed on the appellant was excessive, considering his status as a licensed goldsmith and the minimal quantity of gold found. The penalty was reduced to Rs. 1000. The tribunal partially allowed the appeal, setting aside the confiscation order and reducing the personal penalty imposed on the appellant.

The judgment highlights the importance of statutory compliance, adequate notice, and ownership verification in cases involving the confiscation of goods under relevant laws.