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TMI Blog1988 (8) TMI 233X X X X Extracts X X X X X X X X Extracts X X X X ..... Patel 2. Shri Jeevanlal Jasangdas Patel 3. Shri Dhanjibhai Ambalal Patel 4. Shri Ambalal Shambubhai Patel Feeling aggrieved by the above order the said four persons filed four appeals before the Gold Control Administrator. 3. All the 5 appeals which were pending with the Gold Control Administrator statutorily stood transferred to the Tribunal after the coming into force of Finance Act, 1980. 4. Since all these five appeals arise out of a common order and as they involved common questions of facts and law, they are clubbed together, heard together and hence this common order. 5. The facts necessry for the disposal of these appeals are few and simple. On 25.4.80 the Gold Control officers visited the business premises of the appellant Shri Maneklal Patel and seized primary gold totally weighing 1231.500 gms valued at Rs. 1,65,838.00 under a panchnama. They also seized a sample box of gold-plated bangles and a touch stone containing traces of the gold having been tested on it. After the completion of the investigation, show cause notices were issued to all the appellants herein. The appellant Shri Maneklal was called upon to show cause as to why the gold seized from his p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 500 gms were given to him by the other four appellants, for safe custody. The Collector had accepted this contention of the appellant Shri Maneklal and had ordered release of the said quantity. Thus what remained was 52 gms of primary gold valued at Rs. 6,605/-. Out of this 52 gms, 46.4 gms were ......... coins and a small piece bearing foreign mark and they were for worship. The appellant Shri Maneklal cannot be considered as having been in possession or control or custody of 1179.500 gms valued at Rs. 1,59,233.00 and therefore, the Collector was not justified in holding that the appellant contravened Section 8(1) in respect of the said quantity. The contravention of Section 8(1), if at all, would be in relation to 52 gms. But then, they were all in the appellant s possession for over several years and were used as Pooja articles. Shri Tripathi urged that the Collector was unjustified in ordering confiscation of............... coins and ordering absolute confiscation of small piece of gold weighing 5 gms. He, therefore, prayed that the confiscation of 52 gms may be set aside. It was also the contention of Shri Tripathi that since the Collector had accepted that out of 1231.500 gms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r had released the primary gold claimed by the remaining four appellants the Collector was justified in imposing penalty on them since they could not possess primary gold. Shri Senthivel, therefore, prayed that the appeals may be rejected. 11. We have carefully considered the submissions made on both the sides and perused the available records. The points that fall for determination in these appeals are: 1. Whether the Collector was unjustified in holding that the appellant Shri Maneklal contravened Section 27 of the Act. 2. Whether the Collector was not justified in holding that the appellant Shri Maneklal contravened Section 8(1) of the Act. 3. Whether the Collector was unjustified in ordering absolute confiscation of primary gold bearing foreign marks weighing 5.800 gms valued at Rs. 812.00. 4. Whether the Collector was unjustified in ordering confiscation of primary gold weighing 46.200 gms and allowing redemption of payment of fine of Rs. 2,000/-. 5. Was the penalty on the appellant Shri Maneklal harsh and unreasonable. 6. Whether penalties on the other appellants was illegal and unjustified. 12. Point No. 1. Section 27 (1) of the Act prohibits a person from ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s also not the Collector s finding that the person who gave the primary gold to Maneklal instructed Maneklal to deal in those gold. According to the definition of the expression dealer an agent can be considered as a dealer if he carries on the business referred to in clause (h) on behalf of his principal. When the Collector did not consider Maneklal as falling within the main definition of dealer appearing in Clause (h), then he cannot rope in Maneklal as an agent falling within clause (i) of Clause (h) without recording a finding that Maneklal carried on business specified in Clause (h) on behalf of his principals. There was total misunderstanding of the legal position by the Collector. It is not sufficient if the department establishes that appellant Maneklal was an agent of the owners of the gold. It would be necessary to establish that as an agent he carried on the business or activities specified in Clause (h) of Section 2 on behalf of his principals. Since there was no such finding the Collector committed an error in holding that the appellant Maneklal contravened Section 27 of the Act. 16. Shri Senthivel, however, contended that on the date of search the appellant was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tified in holding that the appellant Maneklal had contravened Section 8(1) of the Act. 18. Point No. 3. Shri Tripathi, appearing for the appellant, submitted that foreign mark gold found in the possession of the appellant was not his. Further the weight was only 5.800 gms valued at Rs. 812.00 and in the said circumstances this should not have been an order of absolute confiscation. The Collector ought to have allowed redemption on payment of fine. We are not impressed by this argument of this Shri Tripathi. There is nothing on evidence to show that this primary gold bearing foreign mark was given to the appellant by any third party. It is not mere possession of primary gold. It is possession of foreign mark gold, the purity of which was found to be 24 ct. Even according to the appellant he had earlier held the gold dealers licence. He should have known that it was a serious offence to receive foreign mark gold and that being the case we see no reason to interfere with the order of absolute confiscation of the primary gold bearing foreign marks. We, therefore, hold on this point that the Collector was justified in ordering absolute confiscation. 19. Point No. 4. Shri Tripathi, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cific allegation was they had the knowledge and have connived at the acts and commissions and omissions on the part of appellant Maneklal. But then, the Collector did not record any finding that these appellants or any one of them had either knowledge of or connived at in the contravention of any of the provisions of the Gold Control Act by Maneklal. In the whole of his order the Collector did not record any finding that these appellants either had knowledge of or connived at in contravention of any of the provisions of the Gold Control Act by the appellant Shri Maneklal. Without assigning any reason he imposed a penalty of Rs. 5,000/- on each of the appellants. These appellants were not proceeded with for possessing or having the ownership of primary gold. The charge was that they abetted the appellant Maneklal but that charge had not been established. More than anything else the Collector did not record any finding for imposing penalties on these appellants. We, therefore, set aside the penalties on these appellants. 22. In the result Appeals 53 of 82, 56 of 82, 57 of 82 and 58 of 82 are allowed. The penalties on the appellants are set aside. The penalties, if paid, shall be re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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