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TMI Blog2009 (6) TMI 660X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of Section 73 of erstwhile Gold (Control) Act, 1968 shall not apply then how can the definition of 'value' as given in Section 2(v) of Gold (Control) Act can be imported in the instant case for adjudging the quantum of fine - Option is required to be given by the officer and before giving option, the amount of fine is required to be adjudged and this amount of fine, if the owner of the Gold opts to deposit in lieu of confiscated Gold, he can deposit or if he feels that he does not want to deposit, the Gold shall remain confiscated with the Government - the amount of fine when adjudged cannot be more than the market value of confiscated Gold at that point of time when the adjudging officer gives an option nor can it be much less than the market value of the Gold on that date - It appears that the Gold worth Rs. 2.5 crores in compliance of the above order must have been retained and the rest of the Gold might have been released to the respondent No. 1 - Petition is disposed of - 6295 of 1996 - - - Dated:- 29-6-2009 - R.C. Gandhi, Actg. C.J. and Mahesh Bhagwati, J. REPRESENTED BY : Shri Kamlakar Sharma, for the Petitioner. Shri Anuroop Singhi, for the Respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Control Administrator as well as by the Special Secretary, Finance exercising the powers of the Central Government was no substitute. As these provisions are stringent in nature and resulting in penal consequences, in my considered opinion, the matter deserves to be re-examined by the Collector, Central Excise Customs after affording full opportunity to the petitioners in respect of exercise of option for getting the Gold redeemed as well as on the question of imposition of penalty as noticed above in the order. As a sequence the orders passed by the Collector dated 24-9-1966 (Annex. 1), the order dtd. 6-3-1972 passed by the Gold Control Administrator as well as the order dated 3/4-6-1979 passed by the Special Secretary, Finance, Government of India exercising the power of revision of the Central Government are quashed and the matter is remitted back to the Collector, Central Excise Customs, New Delhi to examine the matter afresh in the light of the observations made above after affording full opportunity to the petitioners. The parties are directed to appear before the Collector, Central Excise and Customs, New Delhi on 1-9-94 whereafter the Collector shall proceed with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of redemption fine, provisions of Section 73 of the Gold (Control) Act would apply even in a situation where Gold was neither seized nor confiscated under the provisions of Gold (Control) Act. 6. Heard learned counsel for the petitioner as also the learned counsel for the respondent and perused the relevant material available on record. 7. Learned counsel for the respondent has filed the written submissions. At the very outset, learned counsel for the respondent has assailed the relevance of both the questions, in the facts and circumstances of the case, especially, where the reference itself has been made by the Revenue under the provisions of Section 82 of Gold (Control) Act, 1968 and also on the ground that both these questions do not arise from the facts and law applicable in the present case. It is suffice to record that the dispute raised with regard to the relevancy of the reference by the learned counsel for the respondent is totally bereft of merit as the learned counsel never raised this dispute earlier at any point of time. Learned counsel did not raise this dispute even when he was arguing the case. The reference has been questioned for the first time in the writt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue at the time of seizure. Section 73 of Gold (Control) Act envisages that : whenever any confiscation is authorized by this Act, the Officer adjudging it may, subject to such conditions as may be specified in the order adjudging the confiscation, give to the owner thereof an option to pay in lieu of confiscation such fine, not exceeding the value of the thing in respect of which confiscation is authorized, as the said officer thinks fit. 10. The word value has been defined under Section 2(v) of the Gold (Control) Act, 1968 as under :- (v) value , in relation to primary gold, article or ornaments, means- (i) when the gold is seized under this Act, the market price of such gold as on the date of the seizure thereof, 11. Thus, in accordance with the provisions of Section 73 of Gold (Control) Act, the officer adjudging the quantum of fine is required to consider the market price of Gold as on the date of the seizure thereof which cannot exceed the value of the seized Gold in respect of which confiscation is authorized. 12. Now the crucial question arises as to whether in the instant case, the provisions of Section 73 of Gold (Control) Act shall apply with regard to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in possession or control of any Gold, not being ornament, shall be presumed, until the contrary is proved, to be the owner thereof. Rule 126-M of Rules, 1962 deals with confiscation of Gold seized and its adjudication. Sub-rule 8(a) of Rule 126-M of Defence of India Rules, 1962 envisages :- Whenever confiscation of any gold is authorised by this Part the officer adjudging it may give to the owner of the gold an option to pay in lieu of confiscation such fine as the said officer thinks fit: (Emphasis supplied) 15. This rule makes it clear, that any Gold seized under Rule 126-I shall be liable to confiscation and adjudication. If we read sub-rule 8(a) of Defence of India Rules, 1962 and Section 73 of Gold (Control) Act, 1968 together, we find that the provisions of both the Gold (Control) Act and Defence of India Rules, 1962 with regard to determining the quantum of fine are distinct. Section 73 of Gold (Control) Act provides that the quantum of fine shall not exceed the value of Gold (thing) confiscated and as per Section 2(v), value of Gold shall be the market price of such Gold as on the date of its seizure, whereas, sub-rule 8(a) of Rules, 1962 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the use of the words in lieu of connotes that the fine should be equivalent to the thing or Gold confiscated by the authority. Once the ownership of the seized Gold is established, sub-rule 8(a) of Rules, 1962 casts a duty on the officer to give an option to the owner of the Gold to pay such fine in lieu of confiscated Gold as the said officer thinks fit. Option is required to be given by the officer and before giving option, the amount of fine is required to be adjudged and this amount of fine, if the owner of the Gold opts to deposit in lieu of confiscated Gold, he can deposit or if he feels that he does not want to deposit, the Gold shall remain confiscated with the Government. That gives us a ground to ruminate as to what should be the amount of fine which could be in lieu of confiscated Gold. 19. Undeniably and undisputedly, it is the date of giving option which is relevant for adjudging the fine and not the date of seizure. It is pertinent to note that Rule 126-I of Rules, 1962 relates to declaration as to possession of Gold other than ornament One who fails to declare the Gold owned by him, as required under Chapter 5 and on inspection, he is found in possession or c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seeking directions for the respondents not to take any action with respect to getting goods (Gold) from the petitioner department in any manner till the disposal of reference on hand. The Division Bench of this Court in D.B. Civil Stay Application No. 5237/1996 passed the order on May 28, 1997, which reads as under :- We therefore, vacate the stay order passed on December 20, 1996 staying the operation of the order dated October 30, 1995 passed by the CEGAT and instead direct that the petitioner shall retain only that much quantity of the seized gold which will fetch a sum of Rs. 2,50,00000/- (Rupees Two Crores, Fifty lacs) @ Rs. 4600/- (Rupees Four thousand six hundred) per 10 (ten) gms of gold and release and hand over possession of the rest of the quantity of gold to the respondent No. 1 within one month from today. In case the petitioner succeeds and there is any shortfall in the recovery because of fall in price of gold, the respondent no. 1 shall make that good and if the petition is dismissed and the order of the CEGAT is maintained the respondent No. 1 shall be entitled to return of the gold permitted to be retained under this order as per the directions of this Court w ..... 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