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S.P.A.M. Krishnan Chettiar Vs. Collector of Customs and Central - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Tamil Nadu
Decided On
Reported in(1985)(5)LC2152Tri(Chennai)
AppellantS.P.A.M. Krishnan Chettiar
RespondentCollector of Customs and Central
Excerpt:
.....for the respondent, the tribunal makes the following order : 3. the appeal filed before the gold control administrator against the order of the collector of central excise and customs, madurai, referred to supra, has been transferred to the tribunal in terms of section 82k of the gold (control) act, 1968 for being disposed of as an appeal.4. this is an appeal against the order of the collector of central excise and customs, madurai, imposing a redemption fine of rs. 40,000/- under section 73 in lieu of confiscation of 2513.550 gms. of primary gold, and gold ornaments new and old, besides imposition of a penalty of rs. 10,000/- on the appellant under section 74 of the act. the brief facts relating to the appeal are as under.-on 9-2-80, the central excise officers, on information,.....
Judgment:
1. Appeal under Section 81 of the Gold (Control) Act, 1968 praying that in the circumstances stated therein, the Tribunal will be pleased to set aside the order of the Collector of Central Excise and Customs, Madurai, dated 29-10-1980 in C. No. XVII/8/10/80 GC. 2.

2. This appeal coming up for orders upon perusing the records and upon hearing the arguments of Shri K. A. Jabbar, Advocate, for the appellant and upon hearing the arguments of Shri J.M.K. Sekhar, Senior Departmental Representative for the respondent, the Tribunal makes the following Order : 3. The appeal filed before the Gold Control Administrator against the order of the Collector of Central Excise and Customs, Madurai, referred to supra, has been transferred to the Tribunal in terms of Section 82K of the Gold (Control) Act, 1968 for being disposed of as an appeal.

4. This is an appeal against the order of the Collector of Central Excise and Customs, Madurai, imposing a redemption fine of Rs. 40,000/- under Section 73 in lieu of confiscation of 2513.550 gms. of primary gold, and gold ornaments new and old, besides imposition of a penalty of Rs. 10,000/- on the appellant under Section 74 of the Act. The brief facts relating to the appeal are as under.-On 9-2-80, the Central Excise officers, on information, visited the licensed premises of the appellant, M/s. Paripoorna Abarna Maligai at Madurai. Both the partners of the firm. S.P.A.M. Krishnan Chettiar and his son, K. Murugesan, were present in the shop. The officers searched a room behind the show room and recoverd some paper packets and carton boxes, kept concealed on the top of an iron girder in the room, which, on examination, were found to contain primary gold weighing 607.5 gms., new gold ornaments 347.3 gms.

and old gold ornaments weighing 1558.250 gms. and 18 chits containing weighment particulars issued by authorised assayers. Since the above gold and gold ornaments were not accounted for, they were seized under mahazar as per law. A statement was recorded from the appellant on 10-2-80 wherein he confessed that the items under seizure were not accounted for and were purchased from various individuals and were kept concealed with a view to evade the provisions of law. A statement was also recorded from Murugesan, son of the appellant on 13-2-80 which was also inculpatory in nature corroborating the statement of the appellant in respect of the gold and gold ornaments under seizure. It is in these circumstances proceedings were instituted against the appellant which ultimately culminated in the impugned order now appealed against.

(1) Notwithstanding the fact that the appellant is found to have contravened verious provisions of law such as Section 8(1), 31, 33, 36 and 55, the appellant being a licensed dealer, the quintessence of the accusation and the gravamen of the charge would boil down to an alleged violation of Section 55 of the Act, viz. non-accountal, and on facts and under law the appellant cannot be proceeded against for contravention of non-accounting under Section 55. It was urged that the accounts prescribed under Section 55 will have to be according to the prescribed forms under GS 11 and GS 12 which do not deal with a situation where the gold and gold ornaments are not kept for sale. The plea of the appellant being that the gold and gold ornaments under seizure are not "stock-in-trade" and are the personal household jewelleries of his co-brother and brother kept for making marriage jewelleries for them, Section 55 will not at all apply. The learned Counsel for the appellant also relied upon a ruline in this regard reported in AIR 1984 SC 1249 in the case of Manick Chand Paul and Ors. v. Union of India.

(2) The eighteen receipts under seizure did not relate to the seized gold and gold ornaments at all and reference to the same connecting them to seizure in the mahazar as well as in the statement recorded from the appellant would render both false anil unreliable.

(3) Under Section 63 of the Act the authorities cannot record a statement after office hours and so the statements are vitiated and cannot be relied upon.

(4) The statements of the appellant and his son, though inculpatory in nature have been subsequently retracted and the belated retraction cannot be a circumstance against the appellant, as the appellant was suffering from serious ailment.

(5) The acceptance of the appellant's plea by the Income-Tax and Sales-Tax authorities and the additional evidence tendered by the appellant in this regard should be accepted under law and acted upon, Rule 33 of the Customs, Excise and Gold (Control) Appellate Tribunal (Procedure) Rules, 1982, notwithstanding.

6. The learned SDR submitted that the gold and gold ornaments under seizure have not been accounted for and were recovered from the licensed premises of the appellant. Apart from it, the statement recorded after seizure from the appellant is inculpatory and the appellant's son has also corroborated the same. The statement was retracted on 14-3-80 after a considerable length of time and no satisfactory explanation is given for such belated retraction. Recovery of 18 chits relating the transactions of gold is a circumstance against the appellant irrespective of the fact whether they relate to the gold and ornaments under seizure or not. The gold and gold ornaments under seizure having been recovered from the appellant's licensed premises, there is a statutory presumption of ownership against the appellant which has not been satisfactorily rebutted.

7. I have carefully considered the submissions of the parties herein. I should note in this context that neither the learned Counsel for the appellants nor the appellant was present on 31-12-84 when the appeal was posted for further proceedings but had sent in a petition stating "we do not want any further hearing". Therefore, the above submissions of the learned SDR were heard on 31-12-84 and orders passed.

8. The contention of the appellant that the quintessence of the charge against him would primarily crystallise into one under Section 55 of the Act for non-accountal is without substance. The appellant being a gold dealer should account for all the gold and gold ornaments found in his licensed premises. Admittedly, they were not accounted for. The reference to G.S. 11 and G.S. 12 forms prescribed under Section 55 is also equally irrelevant, particularly in the context of the case where the gold and gold ornaments under seizure were kept in the licensed premises for purposes of sale. In this context, the inculpatory statements recorded from the appellant and his son would assume considerable importance. If really the gold and ornaments under seizure belonged to the appellant's co-brother and brother and were kept for purposes of making marriage jewellery for them, it passes one's comprehension as to why this fact was not brought to the notice of the authorities either at the time of seizure or immediately thereafter. On the other hand, the appellant and his son have given statements which are inculpatory in nature and confessional in character admitting the contravention of the provisions of law and praying for a lenient view being taken. If really the appellant's brother and co-brother were the owners of the gold and gold ornaments, it equally does not stand to reason as to why they never made a claim for a considerable length of time and the explanation offered in this context is too artificial and puerilet pass muster with this Tribunal. 1 have gone through the statements recorded from the appellant and his son and I am satisfied that they are true and voluntary. The ratio in the Supreme Court ruling reported in AIR 1984 SC 1249 in the case of Manik Chand Paul and Ors.

v. Union of India is not applicable to the facts and circumstances of this case. The case before the Supreme Court was with reference to the constitutional validity of the various provisions of the Gold (Control) Act and in that context a grievance was expressed by the writ petitioners against the amended prescribed forms viz. GS 11 and GS 12 required to be maintained under Section 55 of the Act read with Rule 11 of the Gold Control (Forms, Fees and Miscellaneous Matters) Rules, 1968. It was contended that the old form GS 10 contained a comprehensive column No. 2 which required the dealer to indicate "name and address of the person from whom gold was received or to whom gold was sold" and that form under the amended Rule has been deleted. While the amended GS 11 requires a licensed dealer to indicate in column No.3 only two categories of persons from whom gold is received namely (a) seller's name and full address or (b) dealers' name and licence number, there is no provision in the form to account for receipt of gold by a licensed dealer from artisans or certified goldsmiths. In the instant case, gold and ornaments were admittedly recovered from the appellant's licensed premises, and they were admittedly not accounted for. As referred to" earlier, under Section 99 of the Act there is a presumption that the person who has in his possession or custody or control any primary gold or ornament, shall be presumed owner thereof unless contrary is proved. The appellant has given a statement on 9/10-2-80 that the unaccounted gold and ornaments under seizure were purchased from various persons. Therefore, the appellant should have entered the Jiames of the parties from whom he purchased under the relevant columns in the aforesaid forms as per law. The plea of the appellant that the gold and ornaments under seizure were entrusted to him by his brother and co-brother has not been accepted. So the Ruling relied on by the appellants is not applicable to the facts and circumstances of this case.

9. The theory of illness pleaded by the appellant also does not stand a moment's scrutiny. The appellant has filed a medical certificate issued by one Dr. S.V.P.S. Dhanasekaran, Balaji Clinic, dated 18-1-83 wherein it is stated that the appellant had an attack of paralysis on 10-1-80 and "it was impossible for him to attend his business" and that "he had been to Kottakkal for further treatment" and that "he was again confined to bed from 11-2-80 to 25-2-80." It should be noted that the search and seizure in the case was on 9-2-80. Therefore, the presence of the appellant in the shop on the date of seizure would only show that he was fit enough to attend business. To a query from the Bench as to why subsequent to 25-2-80 there was no retraction till after 14-3-80, the learned Counsel for the appellant was not able to explain it, nor could the appellant explain why a Medical Certificate should see the light of day only in January, 1983 in respect of an ailment in January, 1980 well nigh after 3 long years.

10. The argument of the learned Counsel that the 18 chits recovered have no correlation with the seizure and therefore reference to the same in the mahazar as well as in the statement of the appellant in an incriminating way would render the mahazar and the statement unreliable is also without substance. The eighteen chits recovered from the appellant's shop evidenced transactions relating to gold ornaments and this is a circumstance which should be convincingly explained by the appellant. The chits were recovered from a place of concealment from a room inside the shop and even if they do not relate to the gold and gold ornaments under seizure in the instant case, the recovery of the chits would only indicate that the appellant had been transacting in gold without bringing the same into account. An adverse inference can certainly be drawn from this circumstance against the appellant and this circumstance has not been explained by the appellant at all.

11. The contention of the learned Counsel for the appellant that the authorities are not competent to record the statement after office hours has got to be mentioned to be rejected as) utterly devoid of merit. Such a conten-tion would lead to very anomalous and absurd situation, particularly if a person were to be in possession of unaccounted gold and ornaments after office hours, the authorities would have to remain pathetic spectators in the teeth of the commission of an offence by a person. Such a construction or interpretation has no legal basis in law nor any judicial sanction by way of precedent.

12. Rule 23 of the Customs, Excise and Gold (Control) Appellate Tribunal (Procedure) Rules, 1982 precludes a person from tendering additional evidence at the appeal stage even though the Tribunal would have jurisdiction suo motu to direct a party to produce additional evidence, if such evidence is just and necessary in the interests of justice. The additional evidence, in my opinion, is not entitled to any credence and the acceptance of the plea of the appellant in this regard by the Sales-tax and Income-tax authorities is also not relevant in relation to the consideration of the issue relating to the contravention of the provisions of the Gold (Control) Act by a licensed dealer in the instant case. It should not be difficult for one to set up ownership in others after seizure and in the instant case, such a plea coming as it does from a licensed dealer after a long lapse of time without any satisfactory acceptable convincing explanation for such a belated explanation, coupled with the improbable nature of the explanation itself, would render it unacceptable.

13. In conclusion, for the reasons stated above, the impugned order appealed against is clearly maintainable in law and the appeal is devoid of merits. But, taking into consideration the facts and circumstances of the case, and keeping in mind the past clean record of the appellant, and also having regard to the purity of the gold as well as the gold ornaments under seizure, 1 reduce the fine in lieu of confiscation to Rs. 35,000/- (Rupees thirty-five thousand only) and the penalty to Rs. 5,000/- (Rupees five thousand only). Except for the above modifications, the appeal is otherwise dismissed.


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