9911796707
TMI Blog1986 (8) TMI 238X X X X Extracts X X X X X X X X Extracts X X X X ..... lication of condonation of delay was numbered as COD(B) 113/of 1986. 2. The condonation application was allowed since option was given by the Tribunal to file a supplementary appeal in order to comply with the procedural requirements. 3. The two appeals involve common questions of law and facts therefore, they are clubbed together and heard together and hence this common order. The brief facts necessary for the disposal of these appeals may be stated as under: The Central Excise Officers on 26-2-1976 searched the business premises as well as the residential premises of the appellant who is a licensed gold dealer. On verification of the statutory record and the physical stock, the Central Excise Officers noticed shortage of 895.450 gms. in the stock of 22 cts. gold ornaments. The search of the residential premises yielded in the recovery of primary gold weighing 706.700 gms. and gold ornaments weighing 590.350 gms. One piece of the primary gold weighed 116.300 gms. and on assaying the purity of which was found to be 999.4%. The Collector of Central Excise Customs, Pune initiated three proceedings, one under the Customs Act for possessing contraband gold, another in respect o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... old weighing 116.300 grams and also the confiscation, with an option to pay a fine of the primary gold weighing 590.400 grams and the personal penalty of Rs.5,000/-. 7. (1) During the hearing of these appeals, Shri S.R. Shetty, the learned Advocate for the appellant, made the following submissions: The shortage noticed in the shop premises had been sufficiently explained but the authorities below have not properly appreciated the contentions and the evidence. He urged that immediately after the seizure the statement of the appellant was recorded and in that statement the appellant had stated, among other things, that the gold ornaments for which there was no market weighing about 709 gms. were melted and primary gold weighing 706.700 gms were obtained. He also urged that the employee of the appellant committed theft and the police were able to recover 193 gms. besides Rs.12,000/-. The two authorities below only took into consideration the seizure of 193 gms. but did not take into consideration the cash amount of Rs.12,000/- recovered from the employee Shri More. If that had been taken into consideration there would be no discrepancy between the shortage noticed in the shop and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce through the shop premises and for the purpose of safety the primary gold obtained by melting gold ornaments was kept in the residence and this explanation should have been accepted. (6) Shri Shetty further submitted that the Collector having rightly released old gold ornaments found in the residence committed an error in imposing a penalty of Rs. 5,000/- on the ground that the appellants did not make a declaration in respect of the said ornaments. Shri Shetty urged that the Collector had accepted that the ornaments belonged to his mother and that the mother had given the said ornaments for keeping in safe custody and in the said circumstances there was no legal obligation for the appellant to make a declaration in respect of the said gold ornaments and as such the penalty imposed was bad. The Board did not consider the above contention and therefore the confirmation of the penalty of Rs.5,000/- by the Board is also bad-in-law. Shri Shetty finally prayed that the two appeals may be allowed, the order of confiscation as well as the penalty may be set aside. 8. Shri Pattekar, appearing for the Collector, supported the orders passed by the Collector and the Board. He urged that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cepted in toto, the weight of the ornaments melted was 709 grams. Still there is a deficit of 186 grams for which no explanation is forthcoming. Further, the shortage noticed was gold ornaments of 22 cts. The primary gold found are one patli piece weighing 116.300 grams. Gold lagadi found pieces 442.400 grams, and Gold pieces of lagadi three pieces weighing 168.000 grams. On assaying the one piece weighing 116.300 grams was found to be 999.4% purity. Therefore, this could not represent the gold ornaments stated to have been melted. If that quantity is deducted from the total quantity of primary gold found in the residence, the quantity comes to 590.350 grams. But then the shortage noticed was 859.450 grams. They do not tally. Further, the explanation given was that for the purposes of safety and security, the melted gold was taken to the residential portion. This cannot be true because during the search of the premises, the Central Excise Officers found ornaments weighing 2150.750 grams in the shop premises. If safety and security was the reason for keeping melted gold in the residential premises then one would expect the ornaments weighing 2150.750 grams also being removed to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s stock. Such an interpretation would defeat the object and the purpose of the Act. I, therefore, reject that contention. Point No. 2 : It was argued on behalf of the appellant that the Collector ordered absolute confiscation of the primary gold weighing 116.300 grams solely on the basis of its purity and because of his conclusion that such a purity is not obtained in India and therefore that piece of gold was a smuggled gold. Shri Shetty contended that the Collector s finding in that regard is erroneous and the Gold Control Administrator also did not properly consider the evidence relating to that piece of gold. Shri Shetty urged that the authorities below have not considered whether that piece of gold is primary gold or ornament. Shri Shetty also relied on the observation of the Board in the appeal filed against confiscation of that piece of gold ordered under the Customs Act. He particularly relied on the following observations of the Board : There is also lack of sufficient evidence to establish guilt of the appellant and for establishing the contraband nature of the gold for the purpose of the Customs Act. There appears considerable force in the contention urged by Shri Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that piece was smuggled into India. Therefore, the distinction made between that gold piece and the other gold pieces for the purposes of giving redemption has no justification. Coming to the contention of Shri Shetty that the gold piece weighing 116.300 grams is not primary gold but it was patli or bracelet, it may be stated that if it was a patli or bracelet, one would have expected the appellant to make such a statement when he was questioned on 27-2-1986. Further, the description in the panchnama by itself would not establish that it was a patli or bracelet. It was not the contention of the appellant that patli or bracelet was cut into pieces. An attempt was made before the Collector that that gold was a bracelet in a straightened form. The observation of the Collector reads : Shri Yeolekar has attempted to argue that the gold was in fact a bracelet (patli) only in a straightened form; that it was initially in the round form and he is not aware of who straightened it up. However, this attempt is rather late. He had all along maintained that it was primary gold obtained by melting gold ornaments from his shop. The panchas have also certified that this piece is of primary gol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... declaration filed within 30 days was valid. The Collector, however, found that the ornaments were given by the person to whom they belonged several months earlier to 5-2-1976. The Collector further found that the appellant s mother was old, infirm, could not see very well. He, therefore, inferred that she could have kept the valuables with the appellant immediately on receipt. For these reasons, he did not believe the statement of the appellant that he received them on 5-2-1976. Since he had not filed declaration the Collector held that he was liable to penalty under Section 74 of the Act. He imposed a penalty of Rs.5,000/- on the appellant. He had, however, released the gold ornaments to the person from whom the same were seized. The Gold Control Administrator had confirmed this part of the order without much discussion. From the order of the Collector, it appears that out of gold ornaments weighing 590.350 grams some gold ornaments belonged to the mother of the appellant, some were received by her against the loans advanced by her, and some belonged to the customers of the appellant. The gold ornaments, belonged to the mother and received by her against loans, were given to the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o make a declaration in respect of gold ornaments which were received by him for safe custody from his mother. The declaration required was in respect of the gold ornaments received from the customers. Admittedly, no such declaration had been made. Therefore, some penalty was leviable for that part of the offence. Taking all aspects into consideration, I reduce the penalty from Rs.5,000/-to Rs.3,000/- (Rupees Three thousand only). 12. In the result, that part of the Gold Control Administrator s order by which he reduced the penalty from Rs.10,000/- to Rs.5,000/- is confirmed. 13. The order of absolute confiscation of primary gold weighing 116.300 grams is set aside. The appellant is given an option to redeem the said primary gold on payment of fine of Rs.5815/- the value set out in the panchanama and he shall exercise that option within two months from the date of communication of this order. He shall also convert the primary gold on redemption into ornaments immediately thereafter. The confiscation, as well as redemption allowed in respect of primary gold weighing 590.350 grams is confirmed. The personal penalty imposed on the appellant is reduced from Rs.5,000/- to Rs.3,000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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