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Collector of Central Excise Vs. Hansraj Jeevandas - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Tamil Nadu
Decided On
Reported in(1986)(7)LC212Tri(Chennai)
AppellantCollector of Central Excise
RespondentHansraj Jeevandas
Excerpt:
.....482.900 gms (consisting of gold bars weighing 316.600 gms. and gold rods weighing 166.3 gms) and gold coins weighing 1759.150 gms. found in a steel almirah, were seized. hansraj explained that these goods belonged to his widowed sister gokhi behn who had been living with him for many years; she passed away in 1971 at the age of 81; due to sentimental reasons, he did not tamper with her articles which were kept in an almirah in the room used by her. he pleaded ignorance of their existence and sought to be excused for any offence under the gold control rules. by his order c.no. xvii/8/59/80-gc. adj. dated 14-11-1980 (annexure b), the collector of central excise, madras, confiscated the primary gold under section 71 of the gold (control) act 1968, (hereinafter referred to as "the act").....
Judgment:
1. On information from the Income-tax Department, Madras, a search of the residential premises of Hansraj Jeewandas was conducted by the Central Excise Officers on 2-4-80. Primary gold weighing 482.900 gms (consisting of gold bars weighing 316.600 gms. and gold rods weighing 166.3 gms) and gold coins weighing 1759.150 gms. found in a steel almirah, were seized. Hansraj explained that these goods belonged to his widowed sister Gokhi Behn who had been living with him for many years; she passed away in 1971 at the age of 81; due to sentimental reasons, he did not tamper with her articles which were kept in an almirah in the room used by her. He pleaded ignorance of their existence and sought to be excused for any offence under the Gold Control Rules. By his order C.No. XVII/8/59/80-GC. Adj. dated 14-11-1980 (Annexure B), the Collector of Central Excise, Madras, confiscated the primary gold under Section 71 of the Gold (Control) Act 1968, (hereinafter referred to as "the Act") but fixed a fine of Rs.10,000/-in lieu of confiscation on a finding that there was contravention of the provisions of Section 8(1) of the Act by Hansraj Jeewandas who had succeeded to the gold on the death of his sister. The Collector also confiscated the gold coins on the finding that they formed part of the gold ornaments and articles held by Goki Behn., whose total possession of 3002.050 gms. exceeded the limits laid down in the Act viz., 2000 gms. for an individual at the time of her death, and that her failure to give a declaration in regard to the gold and gold ornaments referred to, have rendered him liable to confiscation.

As Goki Behn herself was no longer alive, no action was taken against her. He however, gave Hansraj the option to redeem the gold coins on payment of a fine of Rs.10,000/-. Under Section 74 of the Act, he also imposed a penalty of Rs.10,000 on Hansraj Jeewandas.

2. The applicant herein filed an appeal to the Tribunal against the order of the Collector of Central Excise, Madras. By its order No.GC(T)(MAS) 35/81 dated 27-9-83, the Tribunal held that possession of primary gold in the circumstances of the case constituted an offence under Section 8(1) of the Act and its confiscation is maintainable in law. In so far as gold coins were concerned, it observed: "the charge is that Goki Behn was required to declare them in terms of the Act, she did not do so; therefore, the coins became liable to confiscation. A notice to show cause has been issued to Hansraj Jeewandas; he having come in such possession by succession in terms of the proviso to Section 71 of the Act. The coins would not be liable to confiscation in the hands of Hansraj Jeewandas for the omission by Goki Behn to declare these".

3. The Applicant has sought to refer the following questions said to be of law and arising from the order of the Tribunal to the Honourable High Court of Madras under Section 82B of the Act:- 1. "Whether in the facts and circumstances of the case, the Tribunal was right in setting aside the confiscation of gold coins by applying the proviso to Section 71(1) of the Gold Control Act, 1968 on the ground that the failure of late Smt. Goki Behn to file declaration in respect of ornaments and articles owned by her under Section 16 of the said Act will not make the gold liable to confiscation in the hands of Shri Hansraj Jeewandas to whom the gold passed on by succession after the death of Smt. Goki Behn.

2. Whether the condition of the proviso to Section 71(1) of the Gold Control Act 1968 namely, "such act or omission was without the knowledge or connivance" of Shri Hansraj Jeewandas was relevant when the gold became liable to confiscation while still belonging to late Smt. Goki Behn.

4. We have heard both the parties to the Reference Application. As a result of discussion, it has been decided to refer under Section 82 B of the Gold (Control) Act, 1968, the following single question of law arising from the order of the Tribunal to the Honourable High Court of Judicature, Madras:- "Whether in the facts and circumstances of the case, application of proviso to Section 71(1) of the Gold Control Act, 1968, is in order for deciding the liability of the undeclared Gold Coins to confiscation under Section 71(1) of the Act?"


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