2022 (1) TMI 61 - HC - Central Excise

Absolute confiscation - Gold - It was observed that once the Respondent made a statement on the very first date that the primary gold was a result of melting of gold ornaments belonging to the wife, notice ought to have been issued to her under Section 79 of the Act and in the absence of such notice, the gold could not be confiscated - HELD THAT - A plain reading of the Section 79 of the Gold (Control) Act, 1968 reveals that a notice to the owner is a mandatory requirement prior to passing an order of confiscation of gold or levying any penalty etc. - In the present case, as far as the quantity of primary gold is concerned, it has been factually determined that on the very first day of raid on the premises and his shop, the Respondent disclosed that the primary gold was obtained by melting of the gold ornaments belonging to his wife. Therefore, the officers involved in the raid were made aware that the Respondent was not claiming ownership of the primary gold but attributing it to his wife. There should have been no difficulty, therefore, for a notice to be issued under Section 79 of the Act to the wife of the Respondent on the basis of the statement made by him to the officers. For some reason, however, that was not done. Section 79 itself is categorical that irrespective of the person from whom possession of the gold is recovered, a prior notice would have to be issued to the owner of such primary gold before proceeding further to confiscate the said primary gold. In other words, there is no explanation to the section expanding the scope of the expression owner to include an ostensible owner or even a person from whom possession the gold or gold ornaments is recovered - the Court is unable to find any ground to interfere with the impugned order of the CEGAT declining to make a reference of the question as urged by the Petitioner to this Court. Petition dismissed.

Summary

Issues:
Refusal by CEGAT to refer questions of law to High Court.

Analysis:
The petition challenges CEGAT's refusal to refer questions of law arising from its order allowing the Respondent-Assessee's appeal to the High Court. The background involves a raid on the Respondent's premises resulting in the recovery of gold items, testing equipment, and gold ornaments. The Respondent lacked proper certifications and claimed the gold was obtained through various means. The Additional Collector concluded on confiscation and penalties under the Gold (Control) Act, 1968. The Respondent redeemed the confiscated gold ornaments by paying a fine. The First Appellate Authority and CEGAT had differing decisions, with CEGAT allowing the appeal based on procedural lapses.

The Court concurred with CEGAT's view that a notice under Section 79 of the Act to the 'owner' of the gold is mandatory before confiscation or imposing penalties. Despite the Respondent's statement attributing the primary gold to his wife, no notice was issued to her, as required by law. Section 79 clearly mandates notice to the 'owner' regardless of the possessor of the gold. The Court found CEGAT's interpretation legally permissible, emphasizing the necessity of issuing notice to the actual owner before confiscation. Thus, the Court dismissed the petition, upholding CEGAT's decision not to refer the questions of law to the High Court.

In conclusion, the judgment highlights the importance of procedural compliance under the Gold (Control) Act, particularly regarding issuing notices to the rightful owners before confiscating gold. The Court upheld CEGAT's decision, emphasizing the legal requirement of notifying the actual owner before taking any confiscatory actions. This case serves as a reminder of the significance of following due process and adhering to statutory provisions in matters involving confiscation and penalties under relevant laws.