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TMI Blog1988 (9) TMI 313X X X X Extracts X X X X X X X X Extracts X X X X ..... n Das Patel under Section 74 of the Act, ibid. I also hold that Shri Jagan Nath who was knowingly involved in handling, possessing or otherwise dealing with gold at an unauthorised refinery has contravened the provisions of the Gold (Control) Act, 1968, I, therefore, impose a penalty of Rs. 15,000/-(Rupees Fifteen thousand only) upon him under Section 74 of the Gold (Control) Act, 1968. A shortage of 701.600 gms. was noticed in the statutory records of M/s. Nandlal Jagan Nath. Even if due credit is given to the explanation given by the defendants in respect of the jewellery given on approval to Devinder Kumar Arora, there is nothing to disclose that the gold me.l.t.ed and found in the Kothali at the premises of Murli Das Patel came out of the recorded stock of Nand Lal Jagan Nath and not out of any other stock held by him. It is also a fact that the explanation given regarding 125.000 gms. or ornaments having been given to a Karigar is most unsatisfying. It is, therefore, clear that M/s. Nand Lal Jagan Nath have been acting in gross violation of provisions of Gold (Control) Act, 1968 and I impose upon them a personal penalty of Rs. 10,000/- (Rupees Ten thousand only) under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dulichand's case (supra)." 7. Arguing on the first issue learned counsel for the applicants submitted that the findings of the Collector and upheld by the Tribunal that the seized gold weighing 342.000 gms. was not the me.l.t.ed gold but the refined gold and me.l.t.ing is also a part of the refining process is not correct in view of the test report given by the Mint certifying the purity of the gold as 858.2 fineness. While elaborating the arguments he submitted that according to Section 2(t) of the Gold (Control) Act, 1968 read with Rule 3 Schedule I of the Gold Control (Specification of Standard Gold Bars and Conditions of Refining) Rules, 1968, the refined gold - Vithur is of specification 995.0 fineness and therefore the seized gold cannot be said to be refined gold and hence me.l.t.ing and refining cannot be the part of the same process as held by the Collector and upheld by the Tribunal. In reply Shri Rakesh Bhatia, learned SDR submitted that from the issue (question) posed by the learned counsel for the applicants it is clear that in the garb of rectification application the applicants are trying to challenge the findings of the Tribunal for which the remedy lies elsewhere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roduce metals of a higher purity. Under Section 2(t) of the Gold (Control) Act, 'refinery' means a place where gold is me.l.t.ed, assayed, refined, alloyed or extracted or subjected to any other process. The term carat similarly, is only a standard of fineness for gold. The standard for pure gold is 24 carat; 20.6 carats means 3.4 parts of alloy. The fineness of pure gold can be reduced by addition of alloy; it can be increased, by reduction or distillation of alloy. So long as the alloy is less than 15 parts i.e. gold of a purity of not less than 9 carats, whether virgin, me.l.t.ed or reme.l.t.ed, wrought or unwrought; it is covered under the Gold (Control) Act. It is a fact that the impugned gold of 20.6 carats remains to be gold in terms of Section 2 of the Gold (Control) Act, 1968. Shri Murli Das Patel was neither a certified goldsmith nor holding a gold dealer licence. He received gold ornaments from Shri Jagan Nath of M/s. Nand Lal Jagan Nath, licensed Gold Dealer and me.l.t.ed/refined the same unauthorisedly. It is thus evident that Shri Murli Das Patel contravened Section 8,11 and 17 of the Gold (Control) Act, 1968 and the charges levelled against him in the show cause noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s guilty of contravening the provisions of the Gold (Control) Act. Consequently submitted the learned SDR that there is no error apparent from the record requiring any amendment by way of rectification. 12. We have considered the arguments. From the order dated 31-3-1986 passed by this Tribunal, it would appear that the role of the applicant firm and its partner Shri Jagan Nath was considered separately and after appreciating the evidence on record the Tribunal concluded as follows :- "... In this case the charge of non-accountal and un-authorised movement of gold without complying with statutory requirements by the gold dealer is admitted. Shri Jagan Nath did not have any voucher to cover the taking of the gold to Shri Murli Das. The appellant firm and Jagan Nath have also not been able to show with reference to the entries in the statutory accounts and voucher the licit acquisition and delivery of gold to either 'Murli Das who was not a certified goldsmith or a dealer, or, even to the goldsmith Shri Chander to whom the dealer, according to his explanation, seems to have delivered gold without any voucher in gross violation of Section 36 of Gold (Control) Act and also when he di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partnership firm cannot enter into a partnership with another firm or Hindu undivided family or individual", expressed his inability to accept the position that a partnership is a 'person' within the meaning of Section 3(42) of the General Clauses Act" and observed:- "17... Therefore, no exception can be taken to imposition of penalties individually upon them. But since the firm is not a legal entity and Section 140 of the Customs Act was inapplicable to the adjudication proceeding, the Additional Collector of Customs by imposing penalties also upon the firm has really twice punished the petitioners Nos. 1 to 4 for the same sets of acts. Therefore, although I propose to sustain the imposition of penalties under the Customs Act and the Defence of India (Gold Control) Rules upon the petitioners 2 to 4, the penalties of fine imposed upon the petitioner No. 5 firm should be quashed". 16. It has to be stated here that the Hon'ble Supreme Court in the case of Commr. of Income Tax v. V. Angidi Chettiar, AIR 1962 SC 970 held that though the expression 'person' is defined in Section 2(a) of the Income-tax Act as including "a Hindu undivided family and a local authority" that evidently is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ip Act, the effect is given to it and where no such provision had been made decision regarding liability for payment of tax is made while taking into consideration the general provision of the Indian Partnership Act. It is, therefore, obvious that where the provisions of the Income-tax Act are clear, resort cannot be had to the provisions of another statute like the Indian Partnership Act. For this proposition the Full Bench relied upon the decisions of the Supreme Court rendered in the case of C.A. Abraham v. The Income Tax Commissioner, AIR 1961 SC 609; The Commissioner of Income Tax v. S.V. Angidi Chettiar, AIR 1962 SC 970 and the State of Punjab v. Jullundur Vegetables Syndicate, AIR 1966 SC 1295. A Full Bench of the Delhi High Court also took the same view in the case of Chief Commissioner of Sales Tax v. Raj Kishan, 1982 Tax L.R. 3100. The Full Bench in that case while dealing with the meaning of the word 'dealer' as defined under the Bengal Finance (Sales Tax) Act (6 of 1941 as made applicable to Union Territory of Delhi) held that under the general law a firm is not a distinct legal entity but is only a compendious name for all its partners. But a firm which carries on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the firm is to continue. Even the terms of Rule 2 (dd) on which reliance is placed by the respondents clearly show that the stand taken by the department is untenable. The last part of the rule which we have extracted earlier postulates a firm holding a licence. It is, therefore, clear in the context of the Gold (Control) Act, that in the case of firm, the "person" who holds a licence is the firm itself. As under the Income-tax Act, so under this Act a firm is also a "person" capable of holding a licence. The terms of Rule 2(dd) do not, therefore, apply where the applicant firm is not the holder of another gold dealer's licence, or perhaps a case where all the partners of the applicant firm are partners in another firm holding a valid licence. Our conclusion is also fortified by the form prescribed for application for a licence under the Gold Control (Forms, Fees and Miscellaneous Matters) Rules, 1968 where one of the columns requires an applicant to name the partners of the firm." (Emphasis supplied) 18. In the case of India Sea Foods v. Collector of Customs and Central Excise, Cochin -1984 (16) E.L.T. 243 (Kerala) it was argued before the Division Bench that the imposition o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase the appellant firm is a gold dealer licensee under Section 27 of the Gold (Control) Act. The word "dealer" has been defined u/s 2 (h) of the Gold (Control) Act as any person who carries on directly or otherwise, the business of making, manufacturing, preparing, repairing, polishing, buying, selling, etc. and includes a Hindu Undivided Family, local authority, company, society registered under the Societies Registration Act, co-operative societies incorporated under any law with respect to co-operative societies, club, firm, or other association of persons which carries on such business. Thus, no exception can be taken to imposition of penalty upon the firm and its partners. 20. In the instant case separate show cause notices were issued to the applicant firm M/s. Nandlal Jagan Nath and its partner Shri Jagan Nath. In the show cause notice the applicant firm and its partner were charged separately and after the usual adjudication proceedings the adjudicating authority found the applicant firm guilty. The operative portion of the adjudication order holding the firm guilty runs thus:- "A shortage of 701.600 Gins. was noticed in the Statutory records of M/s. Nand Lal Jagan Nath. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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