Skip to content


Dwarka Prasad Gupta Vs. Collector of Central Excise - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Delhi
Decided On
Reported in(1985)(5)LC2503Tri(Delhi)
AppellantDwarka Prasad Gupta
RespondentCollector of Central Excise
Excerpt:
.....of the sections 8, 31, 33 and 55 of the gold (control) act, 1968 and rules 11 and 134 of the gold control (forms, fees and miscellaneous matters) rules, 1968. the appellate collector reduced the personal penalty from rs. 1500 to rs. 500. the appellant is a gold dealer, having his business under the name and style m/s. bharat jewellery house at 257, sabzi mandi, delhi. on 22.8.80 the appellant who is a partner in the firm was present when the gold control authorities checked the statutory returns of the firm. on verification, new gold ornaments weighing 34.800 grams and old gold ornaments weighing 28.800 grams were found in excess of the recorded balance in the statutory register. the said excess gold ornaments were seized on the ground that the appellant could not satisfactorily.....
Judgment:
1. This is a revision petition filed before the Government of India which on transfer is being treated as an appeal. The appeal is directed against the orders dated 3.4.82 of the Appellate Collector, New Delhi.

2. The Assistant Collector of Customs, New Delhi by his order dated 29.4.81 confiscated 63.600 grams of gold under Section 71 of the Gold (Control) Act 1968, with an option to M/s. Bharat Jewellery House to redeem the same on payment of redemption fine of Rs. 1,500. A personal penalty of Rs. 1,500 was imposed on the appellant for contravention of the Sections 8, 31, 33 and 55 of the Gold (Control) Act, 1968 and Rules 11 and 134 of the Gold Control (Forms, Fees and Miscellaneous Matters) Rules, 1968. The Appellate Collector reduced the personal penalty from Rs. 1500 to Rs. 500.

The appellant is a gold dealer, having his business under the name and style M/s. Bharat Jewellery House at 257, Sabzi Mandi, Delhi. On 22.8.80 the appellant who is a partner in the firm was present when the Gold control authorities checked the statutory returns of the firm. On verification, new gold ornaments weighing 34.800 grams and old gold ornaments weighing 28.800 grams were found in excess of the recorded balance in the statutory register. The said excess gold ornaments were seized on the ground that the appellant could not satisfactorily explain their lawful possession. An enguiry followed.

In his statement the appellant admitted the excess stock but he explained that the new ornaments were given to his son in his absence by some goldsmith for being shown as samples to customers.

In respect of the old gold ornaments, he had stated that they belonged to his acguain-tance and that he did not enter the same in the register because he was busy. A show cause notice was issued as to why the ornaments should not be confiscated and a personal penalty levied. The appellant in his reply re-iterated that the new gold ornaments belonged to one Shri Satish Kumar and that they were retained by him as samples of the manufacture. With regard to the old gold ornaments he contended that they belonged to S/Shri Nanak Chand Gupta and B.B. Gupta who had given them to the appellant for necessary repairs. As the appellant had no facility for effecting the repair, he retained the ornaments only to return them to the owners. It must be mentioned that Shri Satish Kumar also sent a letter claiming the new gold ornaments and pointed out that necessary entries had been made in his register for the same. Shri Bodh Raj (B.B. Gupta) gave a statement that the old gold ornaments belonged to him and that the same were given to the appellant for repairs. Since the wages could not be settled, the ornaments remained with the appellant. The Assistant Collector held that the explanation offered by the appellant could not be accepted and imposed a personal penalty as pointed out above. The Appellate Collector confirmed the findings but reduced the penalty.

4. Shri Daya Sagar, Consultant appeared for the appellant while Shri J.P. Anand, JDR for the department.

5. Shri Daya Sagar mainly pointed out that no show cause notice was issued to Shri Nanak Chand or Shri Bodh Raj Gupta or Shri Satish Kumar as required under Section 79 of the Gold (Control) Act. He argued that Shri Satish Kumar produced a G.S. 13 register which corroborated his statement regarding the ownership of the new gold ornaments. Shri B.B.Gupta and Shri Nanak Chand claimed the old gold ornaments. Their statement was confirmed by the engraving of the name of Smt. Maya Devi, wife of Shri Nanak Chand on one of the gold rings. The learned Consultant also relied on the decision reported in 1983 ELT 687 (Sushil Kumar and others v. Collector of Central Excise and others), 1985 (19) ELT 200 (Tribunal) (Hazari Lal Gauri Shankar Badaun v. Collector of Central Excise, Kanpur) and 1983 ELT 1760 (SC) (Shanti Lal Mehta v.Union of India and Ors.) in support of his contention. The ruling 1978 ELT 159 (Hindustan Steel Ltd. v. the State of Orissa) was cited to support the proposition that no penalty should be imposed for technical or trivial breach of legal provisions.

6. Shri J.P. Anand, JDR contended that the explanation offered by the appellant should not be accepted because the Register of repair did not contain any entries. He urged that the version of Shri Satish Kumar should not be accepted as it was an after thought.

7. We have carefully considered the contentions raised by both the parties. It is common case that on 22.8.80 there was a search of appellant's premises and 34.800 grams of new gold ornaments and 28.800 grams of old gold ornaments were seized from the premises. In regard to these ornaments, the Appellate Collector has mainly relied on the presumption contained under Section 33 of the Gold (Control) Act.

According to that section, no licensed dealer shall keep in the premises where he carries on business, as such a dealer, any primary gold, article, or ornament which is not a part of his stock-in-trade.

There is also a presumption that the primary gold or ornament shall be deemed to be part of the stock of such dealer. This section has to be applied in the light of the explanation offered by the appellant regarding the possession of the ornaments. In the absence of any acceptable or reasonable explanation, the authorities can act on the presumption that the offending ornaments formed part of the stock-in trade. In this case the appellant has offered an explanation in regard to the ornaments. We have, therefore, to test this statement in the light of the other evidence adduced by him. In respect of the new gold ornaments his case from the earliest stage was that they belonged to Shri Satish Kumar and that they were given to him as samples of the workmanship. Shri Satish Kumar is admittedly a certified goldsmith. He has given a statement that 7 pairs of Balis and 5 pairs of tops were given by him to the son of the appellant as samples of his workmanship.

Shri Satish Kumar has written a letter even on 22.8.80 (the date of seizure) requesting the department to return the articles seized. The learned JDR contended that the explanation offered by the appellant is a deliberate after thought. But we are of the view that the statement of Shri Satish Kumar is confirmed by the entries in his register regarding the ownership of these items and should be approved.

8. Regarding the old gold ornaments we have the statements of Shri Bodh Raj Gupta and Shri Nanak Chand Gupta stating that they had left these ornaments for repair and polishing. Of course, the appellant has not made entries in his register regarding their receipt. But we have his explanation that the goldsmith to whom they used to give the repair, work had closed his workshop and hence the ornaments had to be returned to the owners. It is significant to note that in' one of the rings, we find the name of the wife of Shri Nanak Chand Gupta engraved, thereby affirming the version given by the appellant.

9. There is yet another infirmity in the department's case. Section 79 of the Gold (Control) Act provides that no order of adjudication or confiscation or penalty shall be made unless the owner of the gold is given a notice in writing informing him of the grounds on which it was proposed to confiscate the gold and giving him a reasonable opportunity of making a representation in writing. If it is so desired, he should be heard in the matter. Admittedly no notice was issued to Shri Satish Kumar, Shri Nanak Chand Gupta or Shri Bodhraj Gupta. The ruling reported in 1983 ELT 687 cited by the learned Consultant holds that if no such notice was given within six months from the date of seizure, the gold seized was liable to be returned to the person from whose possession it was seized. The learned Consultant also produced before us a copy of the ruling of the High Court of Kerala in O.P. 3113 of 69 wherein it was held that notice under Section 79 of the Gold (Control) Act should be given. The recent decision of CEGAT reported in 1984 ECR 1620 also supports our view. Hence having regard to the facts and circumstances of the case, we are of the view that the orders of the lower authorities cannot be sustained. The impugned order is therefore set aside and the appeal is allowed with consequential relief.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //