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Om Prakash, Rattanlal Krishan Vs. Collector of Customs - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Mumbai
Decided On
Reported in(1986)(25)ELT455Tri(Mum.)bai
AppellantOm Prakash, Rattanlal Krishan
RespondentCollector of Customs
Excerpt:
1. the appeals 7/80 and 8/80 arises out the common order-in-original bearing no. xvii (gc)8-26/80/8207 dated 12.9.1980 passed by the collector of customs (preventive), bombay. the appeal no. 9/80 arises out of the order-in-original bearing no. xvii(gc)8-27/80/8196 dated 12.9.80 passed by the collector of customs (preventive) bombay.2. as all these appeals involve common questions of law and facts, they are clubbed together and heard together as requested by the parties and hence this common order. the facts necessary for the disposal of these three appeals may be shortly stated as under:- 3. on 20.5.80, the superintendent gold control, bombay, scrutinised the documents carried by shri bikramjit amarnath sharma the holder of special power of attorney of om prakash jewellers who had.....
Judgment:
1. The Appeals 7/80 and 8/80 arises out the common order-in-original bearing No. XVII (GC)8-26/80/8207 dated 12.9.1980 passed by the Collector of Customs (Preventive), Bombay. The appeal No. 9/80 arises out of the order-in-original bearing No. XVII(GC)8-27/80/8196 dated 12.9.80 passed by the Collector of Customs (Preventive) Bombay.

2. As all these appeals involve common questions of law and facts, they are clubbed together and heard together as requested by the parties and hence this common order. The facts necessary for the disposal of these three appeals may be shortly stated as under:- 3. On 20.5.80, the Superintendent Gold Control, Bombay, scrutinised the documents carried by Shri Bikramjit Amarnath Sharma the holder of Special Power of Attorney of Om Prakash Jewellers who had brought certain gold ornaments from Amritsar. The scrutiny disclosed that M/s.

Om Prakash Jewellers hold gold control licence which was renewed upto 1979. Sri Sharma was asked to carry two packets one containing 432 pieces of gold ornaments weighing 4087.900 gms. and another containing 14 pieces of gold ornaments weighing 125.800 gms. Both the items were covered by vouchers one issued by the firm M/s. Om Prakash Jewellers and the other issued by the firm M/s. Rattan Lal Krishna Lal Amritsar in favour of Narandas & Bros. Bombay. On verification of books of account and the vouchers, it was noticed that the net and gross weight in respect of both the items were shown as the same but then out of the 432 pieces of gold ornaments some of the pieces were studded with stones and pearls and therefore the net weight and gross weight in respect of those ornaments cannot be the same. On questioning Shri Sharma stated among other things that he held Special Power of Attorney from M/s. Om Prakash Jewellers and he had come to Bombay with gold ornaments weighing 4087.900 gms. for sale as a travelling salesman. The two firms at Amritsar corroborated the version of Shri Sharma.

4. As part of the gold was brought for sale outside the licensed premises and since there was discrepancy as to the gross and net weight, a show cause notice was issued to Shri Sharma and to the two firms alleging that they had contravened the provisions of Section 27(7)(b) and 55 of the Gold Control Act 1968 (to be herein referred to as the act) and Rule 11(1) and 13(2)(c) of the Gold (Control) (Forms, Fees and Misc. Matters) Rules 1968 (to be herein referred to as the Rules) and to show cause as to why gold ornaments should not be confiscated and personal penalty should not be imposed. In his reply, Shri Sharma contended that the entire gold ornaments carried by him were duly accounted that the entire gold ornaments carried by him were duly accounted for and were supported by vouchers. He further contended that the order prohibiting the dealer to sell gold ornaments outside the licensed premises to other gold dealers have been kept in abeyance by the Government. Therefore, there had been no contravention of the provisions of the Act in force. M/s. Rattan Lai Krishan Lal in their reply contended among other things that 14 pieces of gold ornaments weighing 125.800 gms. carried by Shri Sharma were sold to a party at Bombay. The firm M/s. Om Prakash Jewellers in their reply contended that the voucher bearing No. 39 dated 19.5.80 issued by them contained the correct description of the gold ornaments carried by the travelling salesman and necessary entries have been made in the GS-12 register and that they had not contravened any of the provisions of the Act or the Rules. Both the firms however contended that they did not indicate separately the weight of the stones and pearls and the lapse on their part is only technical and it did not call for confiscation of the gold ornaments or imposition of penalty. The firm M/s. Om Prakash Jewellers also contended that the prohibition regarding inter-state sale bf gold ornaments have been held back in abeyance and in that connection they placed reliance on the letter F. No. 144/2/73/GC-II dated 24.4.1973 of the Government of India.

5. On the same day, viz. 20.5.1980, the Superintendent of Customs (Preventive) Gold Control found an air passenger by name Shri Swander Singh Ajit Singh Dhanna said to be the representative of Shri Kartar Singh Amrik Singh gold dealers of Amritsar carrying gold ornaments weighing 9021.950 gms. besides one more packet containing gold ornaments weighing 225.450 gms. On verification of the documents carried by Shri Singh that the two GS-12 registers showed a balance of 8068.100 gms. as against 9021.950 gms. carried by Shri Swander and the vouchers for a quantity of 728.400 gms. were not entered in the 2 GS-12 registers. Further, though the gold ornaments we're studded with pearls and stones, the vouchers showed the gross and net weight as the same in respect of ornaments weighing 225.450 gms. contained in another packet.

6. After the completion of the investigation, show cause notices were issued to Shri Swander and to the firm M/s. Kartar Singh Amrik Singh the appellants in Appeal No. 9/80 alleging that they contravened the provisions of Section 36 of the Act read with Rules 11(1) and 13(2)(e) of the Rules. It was further alleged in the show cause notice that they had also contravened the provisions of sub Section (2) of Section 55 of the Act and they were called upon to show cause why the gold carried by Shri Singh should not be confiscated and why penalty should not be imposed on them. In their replies Shri Singh and the Firm contended that the Firm are licensed gold dealers and they were authorised and permitted to have interstate movements and sale of gold ornaments and Shri Singh was the salesman of the Firm. Out of the gold ornaments carried by Shri Singh ornaments weighing 8068.100 gms. were covered by vouchers Nos. 95 and 9 and entries were made in the registers maintained by the firm. Corresponding entries were also made in the tour register. It was further contended that the ornaments weighing 728.400 gms. were also covered by voucher No. 97 and gold ornaments weighing 40.800 gms. were covered by voucher No. 98 both dated 19.5.1980 and the relevant entries were made in the register maintained in the firm and as the bills and gold ornaments were handed over to Shri Singh at the last minute at Amritsar airport, necessary entries could not be made in the tour register. It was further contended that the ornaments weighing 225.45 gms. covered by voucher No. 94 were samples received from M/s. A.K. Motiwalla, Jewellers and they were being carried to Bombay for being returned to them. Necessary entries in respect of these ornaments were made in the registers maintained by the firm at Amritsar and also the firm at Bombay and the omission if any is only too technical which would not warrant confiscation and imposition of personal penalty.

7. As has been stated earlier, the Collector of Customs (P) held an adjudication. The Learned Collector held that the licence dealer has to carry on the business of dealing in gold in the licensed premises and the Act did not provide for carrying on business by a person holding Power of Attorney on behalf of the licenced deader. Licences are personal and not transferable. A gold dealer therefore cannot delegate his functions as a dealer to his salesman. The Power of Attorney issued to Shri Sharma has therefore no legal validity. The person doing business on the strength of the Power of Attorney has to be treated as a person doing business in gold without holding a valid licence. The Learned Collector did not accept the contention of Shri Sharma and the firm M/s. Om Prakash Jewellers that there had been an order of injunction issued by the Supreme Court holding that they were not parties to the Writ Petition before the Supreme Court. He, therefore, held that Shri Sharma as well as the firm M/s. Om Prakash Jewellers have contravened provisions of Section 27(b) and the gold weighing 4087.900 gms. become liable for confiscation under Section 71 and the firm as well as Shri Sharma became liable for personal penalties under Section 74 of the Act. In view of his above findings the Learned Collector did not go into the merit of the contravention of Section 36 and 55 of the Gold Control Act in so far as they relate to the gold ornaments weighing 4087.900 gms.

8. As regards the gold ornaments weighing 125.800 gms. belonging to the firm M/s. Rattan Lal Krishan Lal, appellants in appeal No. 8/80 the learned Collector has held that they had contravened Rule 13(b)(e) and Section 36 and therefore became liable for persona} penalty and the gold became liable for confiscation.

9. Having regard to his finding he ordered confiscation of gold ornaments weighing 4087.900 gms. but allowed redemption on payment of fine of Rs. 15,000/-. He also ordered confiscation of gold ornaments weighing 125.800 gms. but allowed redemption on payment of Rs.500/-. He further imposed penalty of Rs. 1000/- on Shri sharma and a penalty of Rs, 1000/- on M/s. Om Prakash Jewellers but he did not choose to impose any penalty on M/s. Rattan Lal Krishan Lal.

10. In respect of the gold seized from Shri Singh, representative of M/s. Kartar Singh Amrik Singh gold ornaments weighing 8068.100 gms.

were released on 21.5.1980. Action was initiated only in respect of the remaining quantity of 953.800 gms. of gold ornaments. This quantity was split into two parts one part weighing 728.400 gms. which were meant for sale in Bombay and the remaining quantity 225.450 gms which were received from Bombay firm and were being returned to the Bombay firm.

The Collector however held that there had been a contravention of Rule 13(2) of the Rules and Section 36 of the Act in as much as the quantity carried did not tally with the weight mentioned in the voucher in as much as in the voucher the gross and net weight has been shown as the same. He, therefore, ordered confiscation of the gold ornaments weighing 953.800 gms. but allowed redemption on payment of fine of Rs. 5000/-. He also imposed a penalty of Rs. 500/- on the firm M/s. Kartar Singh Amrik Singh but did not impose any penalty on the travelling salesman Shri Singh.

11. Feeling aggrieved by the orders passed by the Collector the firms M/s. Om Prakash Jewellers, M/s. Rattan Lal Krishanlal and M/s. Kartar Singh Amrik Singh filed three separate Revision Applications before the Government of India. Those three Revision Applications filed before the Government of India statutorily stood transferred to the Tribunal for being heard as appeals. Hence these appeals.

Shri Sharma on whom penalty of Rs. 1000/- Was imposed however did not choose to file any Revision before the Government of India.

12. Shri Karmali learned advocate for the appellant vehemently contended that the learned Collector committed a serious error in not considering properly the effect of the injunction order issued by the Supreme Court and in not considering the instructions issued by the Government of India from time to time. Elaborating his contentions, Shri Karmali urged that even though Section 29(7)(b) of the Act required the dealer to carry on his business within the licensed premises as early as in the year 1968, the Government of India by special instructions permitted the dealers transacting sales outside the premises and that ever since the issue of said instructions, the dealers in various parts of the country have been sending gold ornaments for sale to various cities through their authorised representative for the purposes of exhibition and sale. When the Collector of Central Excise, Chandigarh and the Assistant Collector of Central Excise Ameritsar issued trade notices withdrawing facilities granted by the Government of India, a trader approached the Supreme Court by means of a writ petition and the Supreme Court by its order dated 3rd August 1973 stayed the operation of the trade notices issued by the said authorities. Besides the stay order granted by the Supreme Court, the Government of India by its letter dated 24th April, 1973 issued instructions to all the Collectorates to keep in abeyance the restrictions on inter-state movements and sale of gold ornaments.

Further, the Government of India by its letter bearing F.No.132/29-79/GC-H dated 30.7.80 further clarified that the facility of inter-state salesman is allowed subject to proper accoun-tal of such gold ornaments in the relevant statutory record 'untill such time the judgment of the Supreme Court is pronounced. Shri Karmali contended even though the appellants have brought the circular instructions of the Government of India to the notice of the Learned Collector, the Learned Collector without referring to the instructions of the Government of India and in clear violation had ordered confiscation of the gold belonging to the appellants in Appeal No. 7/80 on the sole ground that they contravened the provisions of Section 27(7)(b) of the Act.

13. Shri Karmali further submitted that in respect of the appellants in Appeal Nos. 8 and 9 were concerned, the Learned Collector held that they contravened Sections 36 and 55 of the Act and Rule 13(2)(e) of the Rules on the sole ground that the vouchers produced by them did not contain the description of the various items of gold ornaments and that the gross and net weight were shown as same. Shri Karmali urged that in the vouchers, the total number of pieces of gold ornaments and the total weight were entered. The total number of pieces and the total weight tallied with the number of pieces and the total weight of the pieces recovered from the travelling salesmen. Thus, there was co-telation between the entries made in the vouchers and the gold ornaments recovered from the travelling salesmen. The other discrepancy regarding gross and net weight or not furnishing the description of each of the ornament should be considered as a trivial and of insignificance and in any case the omissions do not justify ordering confiscation of the gold ornaments. He, therefore, prayed that the orders passed by the Collector may be set aside. The fine and penalty imposed by the Collector may be ordered to be refunded.

14. Shri Krishan Kumar for the Respondent Collector however submitted that Section 27(7)(e) is clear and explicit and it did not permit carrying of business in gold by the licenced dealer outside the licenced premises and therefore the Learned Collector was justified in holding that the appellants in Appeal No. 7/80 have contravened the provisions of Section 27(7)(b).

Shri Krishan Kumar further submitted that the vouchers produced by all the appellants do not contain the descriptions of the various items of gold ornaments and individual weight of each ornament and further the gross and net weight were shown as the same, even though certain of the gold ornaments recovered were studded with stones and pearls and in respect of those ornaments the gross and net weight cannot be identical: He therefore urged that the Learned Collector was justified in holding that the appellants in Appeal No. 8 as well as the appellants in Appeal No. 9 of 80 had contravened the provisions of Section 36 and 55 of the Act and Rule 13(2)(e) of the Rules.

15. I have carefully considered the submissions made on both sides. I have also perused the records of the case. The points that fall for determination in all these appeals are :- (1) Whether the appellants in Appeal No. 7/80 have contravened the provisions of Section 27(7)(b) and if so whether the Collector on the facts and in the circumstances of the case was justified in ordering confiscation of the gold ornaments weighing 4087.900 gms.

(2) Whether the appellants in appeal No. 8 and 9 of 80 have contravened the provisions of Section 36 and 55 of the Act and Rule 13(2)(e) of the Rules and if so, whether the Collector on the facts and in the circumstances of the case was justified in ordering confiscation of the gold ornaments and imposing personal penalty on the appellants in Appeal No. 8/80.

Before proceeding to answer to points referred to above, it is necessary to set out certain of the facts which have emerged during the hearing and over which there is not any controversy.

16. The Collector did not record a finding that Shri Bikramjit Amarnath Sharma was not the sales representative of M/s. Om Prakash Jewellers, Amritsar. By reason of his finding and imposition of personal penalty, the Collector tacitly accepted his position that the gold ornaments weighing 4087.900 gms. belonged to Messrs. Om Prakash Jewellers and gold ornaments weighing 125.800 gms. belonged to the firm M/s.

Rattanlal Krishanlal, Amritsar. Similarly, the Learned Collector did not hold Swander Singh was not the representative of the firm M/s.

Kartar Singh Arhrik Singh. As a matter of fact, the Collector had not imposed any personal penalty on Swander Singh but he ordered confiscation of the gold ornaments brought by him and even imposed a personal penalty on M/s. Kartar Singh Amrik Singh. In the circumstances, the Collector accepted that the gold ornaments were entrusted by the firm to Swander Singh.

17. Section 27(7)(b) prohibits a licence dealer from carrying on business as such dealer in any premises other than the premises specified in the licence. The licenced premises of the appellants are situated at Amritsar. Strictly speaking, the appellants cannot carry on their gold dealers' business at Bombay, through their sales representatives. Section 109 of the Act authorises the Central Government to exempt any dealer of any other person from the operation of any of the provisions of the Act subject to such conditions if any as it may be specified in the Order of Exemption. It appears that in the year 1968 by means of general circular the Central Government allowed the facility to gold dealers to send ornaments for sale to other places through travelling salesmen. It appears the Government of India had imposed certain restrictions while granting the above facility. Neither the department nor the appellants produced the circular of the year 1968 but then Shri Krishan Kumar has produced a copy of the Trade Notice No. 2(Gold) 72 dated 14.3.1972 issued by the Bombay Central Excise Collectorate (Customs and Preventive). The circular is reproduced hereunder: "On complaints being received, the Government of India re-examined the working of the facility so far given to dealers to send ornaments for sale to other through travelling salesman. Section 27(7)(b) of the Gold (Control) Act lays down that a licensed dealer shall not carry on business as such dealer in any premises other than the premises specified in his licence. Similarly, Rules 6 and 7 of the Forms Fees and Misc. Matters Rules lay down that a dealer's licence shall be valid only in relation to the premises specified therein and that the licence shall not be transferable.

2. The facility was given for sale of 14 carat ornaments through travelling salesmen. Since the facility had already been given, it was continued because the removal of the concession would have been against the trade practice. However, complaints have been made that this concession is open to abuse. Instances have been reported where a dealer has sent a travelling salesman who after selling some ornaments to another dealer in a different state received as payment other ornaments from the purchaser. There have been several instances where entire lots of ornaments received by a dealer from a travelling salesman of another dealer were treated as on approval and shown to have been subsequently returned.

3. Considering all aspects of the matter, the Government of India have withdrawn forthwith the facility under which a licensed dealer would send ornaments for sale outside his licensed premises through his salesman since, in terms of the law now in force, a licensed dealer cannot transact business except at his licensed premises.

4. The Association concerned are requested to bring the contents of this trade notice to the notice of their member constituents." From this circular it is clear that the Government did grant a facility to a licenced dealers to send ornaments for sale outside the licensed premises through their salesmen and that by reason of misuse of the facility, the Government withdrew the facility so granted. It appears that similar type of trade notice was issued by the Central Excise Collector, Chandigarh and the Assistant Collector of Central Excise, Amritsar. These circulars were challenged before the Supreme Court by means of a writ petition. Pending decision the Supreme Court granted exparte stay of the operation of the circulars.

18. It appears the Gold dealers made representation to the Government to continue the facilities and the Government of India issued the following letter to the President of All India Sarafa Association: "I am directed to refer to your letter No. P/80/349 dated 25.6.1980 and to say that the matter is still pending decision of the Supreme Court. The Gold (Control) Act, 1968 does not specifically provide for any sale of gold outside the licensed premises. However, with a view to avoid inconvenience and hardship to the trade the facility of inter-state sale of gold ornaments accompanied by sale vouchers and properly accounted for in the prescribed records of the licensed dealer was allowed as a concession to the gold jewellery trade until such time the judgment of the Supreme Court is pronounced, except in the'jurisdiction of the Hon'ble High Courts at Allahabad and Andhra Pradesh. Gold ornaments properly accounted for in the licensed dealers' prescribed registers and accompanied by prescribed sale vouchers may be taken by the travelling salesmen to other destinations for sale and display only. No other transaction in gold is, however, peptni-sible under the Gold (Control) Act, outside the licensed premises.

2. The above position may please be clarified to the members of your association." 19. Subsequent to the grant of stay by the Supreme Court the Central Excise Collectorate Chandigarh issued a Trade Notice No. 3/Gold Control/80 and it reads : "Attention of the trade and all others concerned is drawn to this office Trade Notice No. 2/72(Gold Control) dated 24.2.1972 wherein the facility of sale of Gold Ornaments outside the licensed premises through the salesmen was withdrawn. Operation of the said Trade Notice was, however, stayed by the Hon'ble Supreme Court.

2. Now it is clarified that the gold ornaments properly accounted for in the licensed dealer's prescribed registers and accompanied by the prescribed sale vouchers may be taken by the travelling salesmen to other destinations for display and sale only. This concession is confined to sale of ornaments and no other transaction by way of purchase or sale of gold is allowed. The concession is allowed to the 'gold jewellery Trade until such time the judgment of the Supreme Court is pronounced except in the jurisdiction of the Hon'ble High Courts at Allahabad and Andhra Pradesh." It appears the Government of India which had withdrawn the facility of permitting sale of gold ornaments outside the licensed premises subsequently kept in abeyance of the said instructions by another order and the keeping in abeyance was communicated to the President of All India Sarafa Association by its letter dated 24th April 1973 and the said letter is reproduced: "I am directed to refer to your letter dated the 22nd March, 1973 and to say that since the matter regarding the orders under which licensed gold dealers are not permitted to take up ornaments from their licensed premises for sale to other licensed gold dealers is to be tested before the Supreme Court, it has been decided to keep the aforesaid orders in abeyance for the present.

Necessary instructions in this regard are being issued to all Collectors of Central Excise." 20. With this, I shall now proceed to consider the points set out above.

The charges against the firm M/s. Om Prakash Jewellers as could be seen from the show cause notice were (1) that they contravened the provisions of Section 27(7)(b) of the Act in that they carried out gold dealers business outside the licensed premises by sending gold weighing 4087.900 gms. to Bombay through their sales representative for exhibition and sale.

(2) that they contravened Section 36 and 55 of the act as well as Rules 11(1) and 13(2)(e) of the Gold Control (Forms, Fees and Misc.

Matters) Rules, 1968 in as much as they failed to give correct net weight in respect of gold ornaments weighing 4087.900 gms. and 125.800 gms. in their issue vouchers 39 dated 19.5.80 and 42 dated 19.5.80 respectively and also failed to show the description of the gold ornaments in the said vouchers.

The finding of the Learned Collector was that M/s. Orn Prakash Jewellers contravened the provisions of Section 27(7)(b). He did not hold that they contravened Section 36 or 55 or the two Rules referred to above. On the other hand the Learned Collector stated in his order that he does not find it necessary to go into the merits of the contravention of Sections 36 and 55 since the bringing of the gold itself has been held to be illegal.

The Department did not file an appeal against that part of the order by which he refused to consider the contraventions of Sections 36 and 55 of the Act and 11(1) and 13(2)(e) of the Rules and therefore I am not required to go into the said charge.

The question for consideration is whether the appellants M/s. Om Prakash Jewellers contravened Section 27(7)(b) of the act and whether the Collector was not justified in ordering confiscation of the gold -ornaments weighing 4087.900 gms. for the said contravention and imposing a prsonal penalty of Rs. 1000/-. Though the order of the Collector is dated 12.9.1980, the Learned Collector does not refer to any of the circulars issued by the Government of India. It is not clear as to whether the appellants did not bring to the notice of the Collector about the circulars on which they now reply. However, as has been stated earlier, the appellants did mention about the letter bearing F. No. 144/2/73 dated 24.4.1973 addressed to the President-of All India Sarafa Association which indicated that the Government had held back in abeyance the earlier circular withdrawing the facilities granted to the gold dealers. Unfortunately, the Collector did not consider the effect of the circular. The appellants had also brought to the notice of the Collector of the stay granted by the Supreme Court.

The Collector however, did not accept the appellants contention on the sole ground that the appellants were not parties to the writ petition before the Supreme Court. If only the Collector has made some inquiry he would have been satisfied that subsequent to the stay granted by the Supreme Court the Government of India itself had issued instructions for allowing the facility of sale of ornaments by the registered dealers outside the licensed premises. Section 109 empowered the Central Government to exempt any dealer from any of the provisions of the Act. Therefore, the circular issued by the Central Excise could be considered as a circular in exercise of the power conferred under Section 109. Though, in the show cause notice, it was alleged that the appellants have contravened the Government of India's circular, no such finding had been recorded by the Learned Collector. Having regard to the Government of India's letter dated 30th July, 1980 addressed to the President, All India Sarafa Association, the Trade Notice No. 3/1980 issued by the Central Excise Collectorate, Chandigarh and the letter dated 24th April, 1973 addressed to the President, All India Sarafa Association, the Collector in my opinion was not correct in holding that the appellant M/s. Om Prakash Jewellers have contravened the provisions of Section 26(7)(b) of the Act. Therefore, the order of confiscation and the fine imposed in lieu of confiscation cannot stand.

Further, the imposition of penalty of Rs. 1000/-also cannot be justified in the absence of finding that the appellants had contravened the provisions of Sections 36 and 55 and 11 and 13 of the Rules. I, therefore, allow the appeal No. 7/80 and set aside the order of confiscation of the gold ornaments weighing 4087.900 gms. and also set aside the penalty of Rs. 1000/- on M/s. Om Prakash Jewellers. I further direct that the ornaments if not redeemed be returned to M/s. Om Prakash Jewellers. If redeemed, the amount of fine paid, by them and also the penalty if paid shall be refunded to them.

21. The charges levelled against M/s. Rattanlal Krishanlal the appellants in Appeal No. 8/80 as could be seen from the show cause notice are that they contravened the provisions of Sections 36 and 55 of the Act as well as Rules 11(1) and 13(2)(e) of the Rules in respect of gold ornaments weighing 125.800 gms. in that they failed to give correct net weight in the voucher and also failed to show the description of the gold ornaments in the said vouchers.

The charge against the firm M/s. Kartar Singh Amrik Singh the appellants in Appeal No. 9/80 as could be gathered from the show cause notice is that they have contravened the provisions of Section 36 and 55 of the Act and Rules 11(1) and 13(2)(e) of the Rules in as much as they have not shown the description of the ornaments covered by the vouchers No. 94, 97 and 98 and further the said vouchers were not entered in GS-12 tour register. The finding of the Learned Collector in so far as the charge levelled against M/s. Rattanlal Krishanlal was that the ornaments were studded with stones. Therefore, the net weight and gross weight cannot be the same and as such they had contravened the provisions of Section 36 read with Rule 13(2)(e). Because of this finding, the learned Collector ordered confiscation of the gold ornaments but allowed redemption on payment of fine of Rs. 500/- but did not impose any personal penalty. The question for consideration is whether the Learned Collector was justified in ordering confiscation of the gold ornaments just because in, the voucher the appellants showed the gross weight and the net weight as the same. It cannot be disputed that Rule 13(2)(e) of the Rules required the appellants to give the descriptions of each of the ornaments, its gross weight and net weight, purity etc. The voucher is not in conformity With the Rule 13(2)(e) but then there was no discrepancy as to the number of gold ornaments or the total weight found. There was no allegation that there was substitution of the ornaments by the travelling representative. The contravention is of a minor nature which do not call for ordering confiscation of the gold ornaments recovered from the travelling salesmen. As a matter of fact, the Government of India had issued circular instructions to the Collectors not to book minor offences of technical nature unless some malafides are involved or a dealer is guilty of committing the offence repeatedly. Having regard to the circular instructions and considering the fact that there was no allegation of malafide and that the total number of gold ornaments and the total weight tallied with the total number and total weight entered in the voucher. I hold that the Learned Collector was unjustified in ordering confiscation of the gold ornaments. Accordingly, I set aside his order and direct the release of gold if not already released and if released to refund the fine if paid.

22. In so far as the appellants in Appeal No. 9/80 are concerned the finding of the Learned Collector was that the appellants contravened Section 36 and Rule 13(2)(e) as they had mentioned the gross weight and net weight in the voucher as the same. I had already dealt with this aspect while considering the charge levelled against the appellants in Appeal No. 8/80. For the very same reason, I set aside the order of confiscation of the gold ornaments.

23. In addition to his finding that the appellants had contravened Section 36 and Rule 13(2)(e), the Learned Collector had recorded a finding that the appellants had contravened Section 55 of the Act. This contravention according to the show cause notice was that the GS-12 tour register did not contain the entries of the vouchers. Now, the Act or the Rules do not contemplate or maintenance of GS-12 tour register.

The Department had not brought to my notice that the Government of India's instructions required carrying of duplicate GS-12 tour register by the travelling salesmen. In the circumstances, the finding of the Learned Collector that the appellants M/s. Kartar Singh Amrik Singh contravened Section 55 for not entering the vouchers in the GS-12 tour register is not in accordance with law. I, therefore, set aside the said finding.

The order of confiscation of the gold ornaments and the imposition of penalty of Rs. 500/- are also set aside.

24. In the result all the three appeals are allowed. The order of confiscation of gold ornaments in all the three cases are set aside. If the gold ornaments had not been released to the respective appellants they may be released and if released the fine amount paid by each of the appellants shall be refunded to them.

The personal penalty imposed on the appellants M/s. Om Prakash Jewellers and M/s. Kartar Singh Amrik Singh are also set aside. The penalties paid shall be refunded to them.


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