1. By order No. 4/84 dated 31-3-1984 the Collector of Central Excise and Customs, Guntur, had ordered confiscation of gold ornaments weighing 1151.000 gms. valued at Rs. 1,21,550/-, said to have been received by way of pledge by the appellants from various persons under Section 71 of the Gold (Control) Act, 1968 for violation of Section 6(2) thereof. He further fixed a fine in lieu of confiscation of Rs. 15,000/-in respect of these ornaments. 30.700 gms. of primary gold of 20 ct. purity valued at Rs. 3,700/- had also been seized from the premises of the appellants; the appellants claimed that this was the resultant of the melting of his brother's (Kanakarathnam's) wife's mangalsutra; because the goldsmith to whom it was given did not take on the work quickly enough, he got back the melted gold. The Collector has ordered confiscation of this gold also under Section 71 of the Act. He has also imposed a penalty of Rs. 5,000/- each on the appellants herein. The two appellants are partners in a firm dealing with medicines and kirana, who engaged in pawn broking on the side.
2. Before us the consultant for the appellants pointed out that confis cation of the ornaments belonging to third parties for an offence committed by the appellants is bad in law, as an act of commission or omission on the part of the appellants was not with the knowledge of the individual owners of the pledged ornaments. In respect of the primary gold he pleaded for leniency considering that it represented the resultant of melting down the mangalsutra of Kanakarathnam's wife.
3. The Senior Departmental Representative, on the other hand, referred to the findings of the Collector set out in paras 8, 9 and 10 of the order and supported the Collector's findings.
4. We note that the pledged ornaments bear the names of the parties, the amount given to them, the date of pledge, the weight of the ornaments and their purity. In other cases we have been informed that this is the type of marking of pledged ornaments for the purpose of accountal under the State Regulations which are normally accepted for purposes of the Gold (Control) Act. In view of this fact we accept the plea on behalf of the appellants that the pledged ornaments are not liable to confiscation though the appellants are liable to a penalty under Section 74 of the Act.
5. We also take note that the primary gold weighing only 30.700 gms. is the resultant of the melting down of the mangalsutra of the wife of one of the partners. However, possession of primary gold is a violation of Section 8(1) of the Act. We think that the interests of justice will be met if we, (a) order the release of the confiscated gold ornaments weighing 1151.000 gms; (b) order the release of the primarylgold weighing 30.700 gms. on pay ment of a fine in lieu of confiscation of Rs. 1,200/- (Rs. one thousand and two hundred only) ; and (c) reduce the personal penalty imposed on the appellants to Rs. 2,500/ each (Rs. two thousand and five hundred only).
Note.-On release of the primary gold wg. 30.700 gms. the same will be either converted into ornaments or sold to an authorised gold dealer in accordance with law, within one month from the date of release of the primary gold.