1. The appeal dated 8th December, 1979 to the Gold Control Administrator against Order No. XVII(GC)8-35/78 dated 17.3.1979 passed by the Collector of Customs (Prev.) Bombay has been transferred to the Tribunal for disposal in terms of the provisions of Section 82K. of the Gold Control Act.
2. The facts of the case are that on 14.4.1978 the business premises of the appellant firm, which consists of two partners who are appellants 2 and 3, and was carrying on business as gold dealers, were searched by the officers of the Gold Control Cell and gold articles and gold ornaments collectively weighing 3099.600 grams were seized. After investigation and issue of a show cause notice the Collector of Customs passed the impugned order dated 17.9.1979 by which he ordered confiscation of old gold ornaments weighing 1731.200 grams under Section 71 of the Gold Control Act and prescribed a fine of Rs. 10,000/-; confiscated 1368.400 grams of gold and prescribed a fine of Rs. 20,000/-; released 131.000 grams of ornaments seized from the locker of the second appellant on a warning; and imposed penalties of Rs. 2500/- on the firm, Rs. 500/- on the 2nd appellant Shri Jugraj J.Jain and a penalty of Rs. 1000/- on the 3rd appellant Shri Kantilal K.Jain.
(i) Having held that there was no contravention of Sections 31 and 36 read with Rule 13 of the Gold Control (Forms, Fees and Miscellaneous) Rules with regard to the old ornaments weighing 1731.200 grams purchased under vouchers No. 8323 to 8329 on 1.4.1979 the Collector erred in confiscating the said ornaments merely because they were not entered in the account books maintained and holding that Section 55 was contravened. His order is unwarranted, unjust and unsustainable.
(ii) The Collector erred in treating 'Kamarpatta' which were ornaments and were purchased under vouchers 8327 to 8329, as primary gold. He erred in holding that 7 bits of gold weighing 12.100 grams (erroneously stated as 18.100 grams) and three pieces of gold weighing 11.200 grams were primary gold in as much as they were remnants of ornaments.
(iii) The Collector erred in holding that the 7 bits and 3 pieces of gold were primary gold and their purchases were not in conformity with Section 131. He failed to appreciate the contention that the appellants had not "acquired" the said gold and his finding is erroneous.
(iv) Having held that the above 12.100 grams and 11.200 grams were not subject of contravention of Section 36 he ought to have held that the alleged contravention of Section 55 was too trivial and technical to make the said items liable to be confiscated.
(v) The Collector failed to appreciate that 44.000 grams which were embosed with the images of Goddess Laxmi and is smeared with 'Kunkoo' could not be said to have been acquired in violation of Sections 31 and 36 being object of sacred worship. With regard to the guineas weighing 62.000 grams also he failed to appreciate that they were not acquired by the appellants at all and their pleas not having been rejected, his finding that Sections 31 and 36 were infringed, is unsustainable in law.
(vi) & (vii) The Collector erred in holding that in respect of the items of primary gold, Section 55 was violated since not having been acquired, they could not have been entered in the statutory register. Similarly, the guineas weighing 62.00 grams were left by a customer who was to get an authorisation to sell the same and they were not acquired, so Sections 31, 36 and 55 were not violated.
(viii) The Collector erred in holding that the ornaments belonging to the 2nd appellant's son which were found in the locker were also liable to be confiscated in as much as being a technical offence, no confiscation ought to have been ordered.
(ix) The quantum of redemption fine amounting to Rs. 30,000/- and the amounts of penalty imposed are too harsh, and excessive. Without prejudice to the contentions these may be reduced as they are too exorbitant and unconscionable.
(x) The Collector erred in imposing penalties on the firm as well as its partners and penalising the partners twice over amounts to double jeopardy. The order in this respect is therefore null and void. It is, therefore, prayed that the order be set aside and fines and penalties be substantially reduced.
4. Shri Karmali explained that due to an oversight, voucher Nos. 8323 to 8326 dated 1.4.1978 covering 1732.38 grams of old ornaments and 8327 to 8329 dated 1.4.1978 covering 1239.100 grams of Kamarpattas were not entered in the GS-11. The Collector accepted the explanation. It is not as if no vouchers were issued and Sections 31 and 36 were also contravened which would have enhanced the gravity of the breach of Section 55. The vouchers were from series authenticated by the Gold Control Officers and the sellers had confirmed the transactions. Shri Karmali further relied on AIR 1972 Page 231 where the Allahabad High Court had dealt with Section 55 read with Rule 13 and Section 87 under which failure to maintain any account is punishable. The confiscation of 1731.200 grams was not called for and the fine of Rs. 10,000/- was excessive. Similarly, 1239.100 grams of Kamarpattas have been accepted as genuine purchases covered by valid vouchers and should not have been treated as primary gold and confiscated by the Collector. As regards the items covered by 12.100 grams and 11.200 grams, they were left by a customer who had no authorisation to sell, so no voucher should have been issued and they had also not been acquired. The Collector has also accepted that the 4 articles with the image of Goddess Laxmi had kumkum marks and were for religious purposes but he has given no finding. The fine of Rs. 20,000/- for all these items of seizure is, therefore, excessive, when the circumstances are taken into consideration. As regards the penalties Shri Karmali argued that there is no finding against the individual partners and yet penalties have been imposed on both of them besides levy of the penalty on the partnership firm. He stated that imposition of penalty on the firm as well as the partners amounted to double jeopardy as it would be double punishment on the partners who constituted the firm for the same sets of acts. In this connection ho relied on AIR 1975 Calcutta 337 wherein it was held that imposition of penalties upon the firm as well as the partners would in effect be imposition of double punishment on the partners for the same sets of acts though this decision was in a customs case it was equally applicable in the present case. Shri Karmali did not dispute the need for different penalties on the two partners since one of them was not present at the material time.
5. For the respondent, Shri Jain laid stress on the mandatory nature of Section 55 and Rule 13. Confiscation under Section 71 was attracted by the failure to enter the GS-11. Apart from the fact that the plea of in advertance is not plausible being not in keeping with the nature of dealings in the gold trade. The statements of the employees also do not support it. Merely because the benefit of doubt was given does not warrant more leniency than already shown. As regards the so called 'Kamarpattas', they were examined by the Collector who found them to be pattas or strips, which are primary gold and were held in contravention of Section 31. The benefit of doubt of contravention of Section 36 was given, but Section 55 was also violated and Sections 71 and 74 were attracted. The bits and pieces weighing 12.100 grams were primary gold and liable to confiscation. Likewise, the explanations for the 62.000 grams guineas and puja items of 44.000 grams are unacceptable and violations of Sections 33, 33 and 55 have been committed. The confiscations were rightly ordered and the fines are not excessive.
Penalties are also warranted under Section 74. The licence is in the name of the firm and the role of each of the two partners has been mentioned by the Collector. Shri Jain, therefore, opposed the pleas made in the appeal.
6. We have carefully considered the pleas on both sides. As far as the confiscation of 1731.200 grams of old gold ornaments is concerned, we agree with the contention that having accepted the genuineness of the vouchers under Section 36 and having held that Section 31 was not contravened, the confiscation need not have been ordered or, in any case, a lesser redemption fine was called for, since violation of Section 55 was essentially technical and would have attracted a penalty under Section 75. Having regard to this we set aside the order of confiscation of these ornaments, and do not consider any separate penalty necessary for this breach. In regard to 1239.100 grams, though the appellant has been referring to them as 'Kamarpattas', no evidence has been laid before us that these are pieces of genuine 'Kamarpattas'.
On the contrary, the records and even the examination in the presence of the appellant, show that they are pattas or strips which are primary gold. Though the benefit of doubt has been given in regard to Section 36, the Collector has held them to be primary gold. By implication they were acquired in contravention of Section 31 and the order of confiscation does not require to be interfered with by us. Since the remaining items of primary gold were not covered by any vouchers or any authorisation, contraventions as held by the Collector have been established. As far as the four articles claimed to be used for Puja purposes are concerned, they were required to be declared because of the provisions of Section 16(7) and could not be kept with the stock in trade in terms of Section 33. The confiscation and fine in respect of these items is therefore upheld. Coming to the penalties, we do not find adequate reason having been given by the Collector for imposing a penalty on the partnership firm as well as the penalties on the two partners of the firm. The legal precedent cited by learned Counsel also supports the plea of double punishment for the same acts. Accordingly, we negate the penalties imposed on appellants2 and 3 and sustain the penalty on the firm. Except for these modifications, the appeal is otherwise rejected.