9911796707
TMI Blog1988 (10) TMI 139X X X X Extracts X X X X X X X X Extracts X X X X ..... Control) Act and the penalty of Rs. 20,000/- imposed on the appellant under Section 74 of the Gold (Control) Act. 3. Shri Gujral, appearing for the appellant, contended that the department had accepted that the primary gold found in the appellant s possession were obtained by melting the old gold ornaments given by the customers. If that position is accepted the gold belonging to the customers cannot be ordered to be confiscated and, therefore, the order of confiscation itself is illegal. In that connection Shri Gujral placed reliance on the decision of the CEGAT reported in 1985 ECR page 167 and the Supreme Court decision reported in 1987 (31) E.L.T. page 609. Secondly Shri Gujral submitted that if the gold is not liable for confiscation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scation and imposing the penalty. 5. We have considered the submissions made on both the sides. To appreciate the contention it is necessary to refer to the show cause notice issued to the appellant. The charges levelled against the appellant in the show cause notice dated 13-6-1986 are the contravention of Section 42(ii) and Section 55 of the Gold (Control) Act. There is no other charge. 6. Shri Gujral did not dispute that the primary gold found in possession of the appellant exceeded the quantity prescribed under Section 42(ii). Therefore, Shri Gujral cannot seriously challenge the finding of the Collector that the allegation in the show cause notice has not been established. His contention was that even if there had been a contravent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts, the customers themselves have staked their claim with the department. It is after investigation a show cause notice was issued. If, after investigation, the department did not allege illegal acquisition and have not invoked Section 31, the inference is to be drawn that the seized gold is accounted gold. The explanation of the appellant is that the primary gold found in his possession was obtained by melting of the gold ornaments of the customers. Therefore, the primary gold becomes the gold of the customers. If that be so under proviso (b) to Section 71 the same cannot be ordered to be confiscated unless the department establishes that the customers have knowledge of the contravention of the Gold (Control) Act by the dealer or they hav ..... X X X X Extracts X X X X X X X X Extracts X X X X
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