1. This is a transferred appeal under Section 82-K of the Gold (Control) Act and is directed against Order No. VIII (Cus.) 110-1/77 Adj 834, dated 21-4-79 passed by the Collector of Central Excise & Customs Pune. By that order the Collector had ordered confiscation of six bars of primary gold weighing 1870 gms and 96 gold coins weighing 768 gms. under Section 71(1) of the Gold (Control) Act, 1968, The confiscated goods had been allowed to be redeemed on payment of Rs. 31,000-and subject to further conditions regarding conversion after redemption. A penalty of Rs. 5000/- had also been imposed on the Appellant under Section 74 of the Act.
2. The brief facts of the case are that Income-tax authorities searched the premises of the Appellant at Shahapur. Among other things, they found 6 gold chips and 96 gold coins referred to above. All the items except 6 gold coins were found concealed in a wall inside the Ganesh cupboard and 6 gold coins were found in the cupboard itself. The appellant denied knowledge of the existence of the 6 gold chips and 90 gold coins dug out of the wall and stated that the other 6 gold coin were used for Pooja purposes. It was claimed that the gold coins and chips of gold had perhaps been secreted by the father of the Appellant who died in 1940 when the Appellant was only 15 years of age. His mother followed in 1959. When he was asked to explain the possession of the gold, the Appellant produced certain books of accounts wherein some entries had been made regarding the purchase of primary gold.3. Before us, the Advocate for the Appellant urged that the applicant was not in conscious possession of the gold and the gold coins dug from out of the wall. This would be clear from the fact that even the Income-tax authorities had to dig a number of places before they stumbled on the hidden gold. Hence it cannot be accepted, as indicated by the Collector that they had precise information. He further urged that the Appellant is the Kartha of the Hindu Undivided Family consisting of three brothers; one out of the three brothers having since died. He urged that limit for possession of gold articles/ornaments for such group of families is 12000 gms.
4. Shri Shah then went on to some legal aspects such as definition of primary gold, whether gold coins recovered from the appellant are covered by the term Primary gold (he urged that they were not) and how Section 8(1) would not apply to the circumstances of the case. He also referred to Section 16, Sub-sections (5) and (6) of the Act and claimed that as there was more than one family residing in the premises from which the gold and gold ornaments were seized, the limit for non-declaration is 12,000 gms. (3x4000 gms.) He also referred to the following decisions of Courts in support of his stand regarding declaration : (i) the case of Asstt. Collector of Central Excise v, Rikabdas Tejumal Shah, page 427 Cencus Manual of Gold Control, 1982 Edition ; (ii) J.A. Abdul Hamid v. Collector of Central Excise, Madras, page 343 ibid ; (In the last case it was held that a Kartha of a HUF had no liability under the Act for declaration).
5. The Senior Departmental Representative started by referring to the circumstances of seizure, the production of account books by the Appellant in support of the claim that the goods had been secreted by his father who died in 1940 and how it is unnatural that the father would not have been able to pass on the information to someone of the family. In view of our conclusion which was indicated in the Court itself, we did not call upon the SDR to meet the legal points made by the Counsel for the Appellant.
6. We have considered the agruments on both sides. We noted that unearthing of gold chips and gold coins was not by digging at one point but the result of a number of abortive diggings. Hence, one cannot say that the information was under possession of the Income-tax authorities was a precise one. We also noted that the Appellant and his brothers are agriculturists and the business of money-lending had been stopped with the demise of his father. It is noted from the order of the Income-tax Officer under Section 132 (5) of the Income-tax Act that they possess about 270 acres of agricultural lands. We also observed from the same order the safe contained such items as old copper coins of one paise, quarter anna coin, white 2 anna coins and 4 anna coins, totally valued at Rs. 1215.30. It looks as if his family is keen on holding on to such old coins though they have been ceased to be in legal tender. Perhaps, hoarding is in the blood of the family. The Appellant was hardly 15 years old at the time of death of his father. A good part of the coins seized shows the year of manufacture as 1925 and 1926. Their seems to be old fashioned, conservative agriculturists family dabbling in money-lending during the life time of the father of the Appellant. Considering the evidence on record as a whole, we hold that a case of conscious possession of gold and gold coins has not been established and they are not actionable under Section 8(1) and/or Section. 16 of the Act. Accordingly, we set aside the order of the Collector and order release of the gold chips and gold coins with proviso that within one month from the date of release they shall be disposed of by sale to or by conversion into ornaments through a licensed gold dealer. The penalty imposed on the Appellant is also remitted.