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TMI Blog1984 (10) TMI 131X X X X Extracts X X X X X X X X Extracts X X X X ..... torney of Om Prakash Jewellers who had brought certain gold ornaments from Amritsar. The scrutiny disclosed that M/s. Om Prakash Jewellers hold gold control licence which was renewed upto 1979. Shri Sharma was asked to carry two packets one containing 432 pieces of gold ornaments weighing 4087.900 gms. and another containing 14 pieces of gold ornaments weighing 125.800 gms. Both the items were covered by vouchers one issued by the firm M/s. Om Prakash Jewellers and the other issued by the firm M/s. Rattan Lal Krishna Lal Amritsar in favour of Narandas Bros. Bombay. On verification of books of account and the vouchers, it was noticed that the net and gross weight in respect of both the items were shown as the same but then out of the 452 pieces of gold ornaments some of the pieces were studded with stones and pearls and therefore the net weight and gross weight in respect of those ornaments cannot be the same. On questioning Shri Sharma stated among other things that he held Special Power of Attorney from M/s. Om Prakash Jewellers and he had come to Bombay with gold ornaments weighing 4087.900 gms. for sale as a travelling salesman. The two firms at Amritsar corroborated the vers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts weighing 9021.950 gms. besides one more packet containing gold ornaments weighing 225.450 gms. On verification of the documents carried by Shri Singh that the two GS-12 registers showed a balance of 8068.100 gms. as against 9021.950 gms. carried by Shri Swander and the vouchers for a quantity of 728.400 gms. were not entered in the 2 GS-12 registers. Further, though the gold ornaments were studded with pearls and stones, the vouchers showed the gross and net weight as the same in respect of ornaments weighing 225.450 gms. contained in another packet. 6. After the completion of the investigation, show cause notices were issued to Shri Swander and to the firm M/s. Kartar Singh Amrik Singh the appellants in Appeal No. 9/80 alleging that they contravened the provisions of Section 36 of the Act read with Rules 11(1) and 13(2)(e) of the Rules. It was further alleged in the show cause notice that they had also contravened the provisions of sub -section (2) of Section 55 of the Act and they were called upon to show cause why the gold carried by Shri Singh should not be confiscated and why penalty should not be imposed on them. In their replies Shri Singh and the Firm contended that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the gold weighing 4087.900 gms. become liable for confiscation under Section 71 and the firm as well as Shri Sharma became liable for personal penalties under Section 74 of the Act. In view of his above findings the Learned Collector did not go into the merit of the contravention of Section 36 and 55 of the Gold Control Act in so far as they relate to the gold ornaments weighing 4087.900 gms. 8. As regards the gold ornaments weighing 125.800 gms. belonging to the firm M/s. Rattan Lal Krishan Lal, appellants in appeal No. 8/80 the learned Collector has held that they had contravened Rule 13(b)(e) and Section 36 and therefore became liable for personal penalty and the gold became liable for confiscation. 9. Having regard to his finding he ordered confiscation of gold ornaments weighing 4087.900 gms. but allowed redemption on payment of fine of Rs. 15,000/-. He also ordered confiscation of gold ornaments weighing 125.800 gms. but allowed redemption on payment of Rs. 500/-. He further imposed penalty of Rs. 1,000/- on Shri sharma and a penalty of Rs. 1,000/- on M/s. Om Prakash Jewellers but he did not choose to impose any penalty on M/s. Rattan Lal Krishan Lal. 10. In respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purposes of exhibition and sale. When the Collector of Central Excise, Chandigarh and the Assistant Collector of Central Excise Amritsar issued trade notices withdrawing facilities granted by the Government of India, a trader approached the Supreme Court by means of a writ petition and the Supreme Court by its order dated 3rd August 1973 stayed the operation of the trade notices issued by the said authorities. Besides the stay order granted by the Supreme Court, the Government of India by its letter dated 24th April, 1973 issued instructions to all the Collectorates to keep in abeyance the restrictions on inter-state movements and sale of gold ornaments. Further, the Government of India by its letter bearing F.No. 132/29-79/GC-II dated 30-7-1980 further clarified that the facility of inter-state salesman is allowed subject to proper accountal of such gold ornaments in the relevant statutory record untill such time the judgment of the Supreme Court is pronounced. Shri Karmali contended even though the appellants have brought the circular instructions of the Government of India to the notice of the Learned Collector, the Learned Collector without referring to the instructions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contravened the provisions of Section 36 and 55 of the Act and Rule 13(2)(e) of the Rules. 15. I have carefully considered the submissions made on both sides. I have also perused the records of the case. The points that fall for determination in all these appeals are :- (1) Whether the appellants in Appeal No. 7/80 have contravened the provisions of Section 27(7)(b) and if so whether the Collector on the facts and in the circumstances of the case was justified in ordering confiscation of the gold ornaments weighing 4087.900 gms. (2) Whether the appellants in appeal No. 8 and 9 of 80 have contravened the provisions of Section 36 and 55 of the Act and Rule 13(2)(e) of the Rules and if so, whether the Collector on the facts and in the circumstances of the case was justified in ordering confiscation of the gold ornaments and imposing personal penalty on the appellants in Appeal No. 8/80. Before proceeding to answer to points referred to above, it is necessary to set out certain of the facts which have emerged during the hearing and over which there is not any controversy. 16. The Collector did not record a finding that Shri Bikramjit Amarnath Sharma was not the sales represen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Misc. Matters Rules lay down that a dealer s licence shall be valid only in relation to the premises specified therein and that the licence shall not be transferable. 2. The facility was given for sale of 14 carat ornaments through travelling salesmen. Since the facility had already been given, it was continued because the removal of the concession would have been against the trade practice. However, complaints have been made that this concession is open to abuse. Instances have been reported where a dealer has sent a travelling salesman who after selling some ornaments to another dealer in a different state received as payment other ornaments from the purchaser. There have been several instances where entire lots of ornaments received by a dealer from a travelling salesman of another dealer were treated as on approval and shown to have been subsequently returned. 3. Considering all aspects of the matter, the Government of India have withdrawn forthwith the facility under which a licensed dealer would send ornaments for sale outside his licensed premises through his salesman since, in terms of the law now in force, a licensed dealer cannot transact business except at his lic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... outside the licensed premises through the salesmen was withdrawn. Operation of the said Trade Notice was, however, stayed by the Hon ble Supreme Court. 2. Now it is clarified that the gold ornaments properly accounted for in the licensed dealer s prescribed registers and accompanied by the prescribed sale vouchers may be taken by the travelling salesmen to other destinations for display and sale only. This concession is confined to sale of ornaments and no other transaction by way of purchase or sale of gold is allowed. The concession is allowed to the gold jewellery Trade until such time the judgment of the Supreme Court is pronounced except in the jurisdiction of the Hon ble High Courts at Allahabad and Andhra Pradesh." It appears the Government of India which had withdrawn the facility of permitting sale of gold ornaments outside the licensed premises subsequently kept in abeyance of the said instructions by another order and the keeping in abeyance was communicated to the President of All India Sarafa Association by its letter dated 24th April, 1973 and the said letter is reproduced: I am directed to refer to your letter dated the 22nd March, 1975 and to say that since ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overnment of India. It is not clear as to whether the appellants did not bring to the notice of the Collector about the circulars on which they now reply. However, as has been stated earlier, the appellants did mention about the letter bearing F. No. 144/2/73 dated 24-4-1973 addressed to the President of All India Sarafa Association which indicated that the Government had held back in abeyance the earlier circular withdrawing the facilities granted to the gold dealers. Unfortunately, the Collector did not consider the effect of the circular. The appellants had also brought to the notice of the Collector of the stay granted by the Supreme Court. The Collector however, did not accept the appellants contention on the sole ground that the appellants were not parties to the writ petition before the Supreme Court. If only the Collector has made some inquiry he would have been satisfied that subsequent to the stay granted by the Supreme Court the Government of India itself had issued instructions for allowing the facility of sale of ornaments by the registered dealers outside the licensed premises. Section 109 empowered the Central Government to exempt any dealer from any of the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The finding of the Learned Collector in so far as the charge levelled against M/s. Rattanlal Krishanlal was that the ornaments were studded with stones. Therefore, the net weight and gross weight cannot be the same and as such they had contravened the provisions of Section 36 read with Rule 13(2)(e). Because of this finding, the learned Collector ordered confiscation of the gold ornaments but allowed redemption on payment of fine of Rs. 500/- but did not impose any personal penalty. The question for consideration is whether the Learned Collector was justified in ordering confiscation of the gold ornaments just because in the voucher the appellants showed the gross weight and the net weight as the same. It cannot be disputed that Rule 13(2)(e) of the Rules required the appellants to give the descriptions of each of the ornaments, its gross weight and net weight, purity etc. The voucher is not in conformity With the Rule 13(2)(e) but then there was no discrepancy as to the number of gold ornaments or the total weight found. There was no allegation that there was substitution of the ornaments by the travelling representative. The contravention is of a minor nature which do not call fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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