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P.P. Chandrasekhara Pai and Sons Vs. Collector of Central Excise - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Tamil Nadu
Decided On
Reported in(1986)(6)LC577Tri(Chennai)
AppellantP.P. Chandrasekhara Pai and Sons
RespondentCollector of Central Excise
Excerpt:
.....constitute the firm under the name and style of m/s. p.p. chandrasekhara pai & sons, having a gold dealer's licence at ernakulam, cochin. on 8-2-1979, the assistant collector of central excise, ernakulam division made a surprise visit to the licensed premises of the appellants as well as to their residence and during the search in the residence of the appellants the authorities found 295.100 gms. of gold ornaments unaccounted and not declared in the statutory accounts of the firm. the ornaments were therefore, seized by the authorities as per law under mahazar attested by witnesses. on examination by the authorities, appellant chandrasekhara pai on 8-2-1979 gave a statement stating that the unaccounted ornaments under seizure were locally purchased by him from goldsmiths for purpose.....
Judgment:
1. This is an appeal against the order of the Appellate Collector of Customs, Madras, referred to supra, confirming the finding of the Deputy Collector of Central Excise, Cochin, in his Order C. No.XVII/8/5/79-G.C. Adj.; dated 8-8-1980 but modifying and reducing the redemption fine from Rs. 15,000/- to Rs. 10.000/- and confirming the individual penalties imposed on the appellants Chandrasekhara Pai and C. Ratnakara Pai in a sum of Rs. 1000/-Rs. 500/- and Rs. 1000/- each for contravention of Section 16 (1), 16 (7), 16 (10), 16 (11), Section 38 and Section 55 of the Act.

2. Appellant Chandrasekhara Pai is the father of appellant Ratnakara Pai and both of them constitute the firm under the name and style of M/s. P.P. Chandrasekhara Pai & Sons, having a gold dealer's licence at Ernakulam, Cochin. On 8-2-1979, the Assistant Collector of Central Excise, Ernakulam Division made a surprise visit to the licensed premises of the appellants as well as to their residence and during the search in the residence of the appellants the authorities found 295.100 gms. of gold ornaments unaccounted and not declared in the statutory accounts of the firm. The ornaments were therefore, seized by the authorities as per law under mahazar attested by witnesses. On examination by the authorities, appellant Chandrasekhara Pai on 8-2-1979 gave a statement stating that the unaccounted ornaments under seizure were locally purchased by him from goldsmiths for purpose of sale and they were not accounted for in the statutory accounts of the firm nor declared before the authorities as per law. It is in these circumstances after further investigation proceedings were instituted against the appellants which ultimately resulted in the impugned order now appealed against.

3. The learned counsel appearing for the appellants submitted that the statement recorded from appellant Chandrasekhara Pai, though inculpatory in nature was subsequently retracted on 19-3-1979 by his son Ratnakara Pai and as such much weight cannot be attached to the same. It was further urged that items 3, 3 and 8 listed in the mahazar and totally weighing 82.800 gms. belonged to appellant Ratnakara Pai's wife and given to her by her parents at the time of her marriage on 27-4-1978 and therefore, belonged to her individually. Since the same was not in any way connected or concerned with the business of the appellants, no declaration under law need be made. In respect of the ornaments listed as items 1, 10 and 14 in the mahazar and totally weighing 35.100 gms., it was urged that they belonged to a goldsmith by name Chellappan Achari who pledged the same with appellant Chandrasekhara Pai for purposes of raising a loan and this factor having found acceptance at the hands of the original adjudicating authority, the authorities, it was contended should have exonerated the appellant of the charges. Finally, the learned counsel submitted that even if the appellants are held to have contravened, the provisions of the Act, the contravention would only be technical in the circumstances of this case warranting a lenient view being taken with reference to the quantum of redemption fine as well as penalty.

4. The learned Departmental Representative submitted that the statement recorded from appellant Chandrasekhara Pai immediately on seizure on 8-2-1979 is clearly inculpatory in nature and confessional in character and the same was not resiled from till 16-8-1979 for a period of over six months and as such the statement is entitled to great credence and acceptability. He further submitted that filing of a declaration by a licensed dealer is mandatory under Section 16 (7) of the Act in respect of any gold owned, possessed, held or controlled by him in any capacity, either as a licensed dealer or otherwise. The appellant not having declared the gold ornaments under seizure the charges of contravention are clearly made out.

5. I have considered the submissions of the parties herein. As rightly contended by the learned Departmental Representative, appellant Chandrasekhara Pai has made an inculpatory statement at the earliest opportunity and immediately on seizure on 8-2-1979 confessing to the fact that the ornaments under seizure were purchased by him and kept undeclared and unaccounted in the statutory accounts and for purposes of sale. It should be noted in this context that this statement was not retracted for a long time till 16-8-1979 when the appellant chose to give a reply to the show cause notice. Apart from the fact this inculpatory statement was not retracted immediately, there is no explanation either, from the appellant for a belated retraction. I am not able to accede to the plea of the learned counsel that the retraction by the son, viz. appellant Ratnakara Pai on 19-3-1979 should be deemed to be one made on behalf of the father. Even here, one would find that there is no explanation for such a belated retraction even by the son. In the circumstances, I am inclined to hold that the statement recorded from appellant Chandrasekhara Pai and referred to supra is voluntary and true and is entitled to consideration and weight.

6. Regarding the plea of the learned counsel that items 1, 3 and 8 listed in the mahazar and weighing 83.800 gms., belonged to the wife of appellant Ratnakara Pai, no evidence has been adduced to substantiate the same except a mere assertion on the part of the appellant. In the absence of any materials on record to prove the same, I am not inclined to accept such a plea. The learned counsel's argument that items 2, 10 and 14 listed in the mahazar, totally weighing 35.100 gms. belonged to one goldsmith Chalappan Asari and were pledged with appellant Chandrasekhara Pai for purposes of raising a loan would not in any way help the appellant in respect of the charge levelled against him. As rightly contended by the learned Departmental Representative, Section 16 (7) enjoins on a licensed dealer to make a declaration as per law of the gold owned, possessed, held or controlled by a licensed dealer. The fact that in respect of the gold ornaments under seizure, no declaration as per law was made is not disputed before me. When this was pointed out to the learned counsel, he in all fairness, conceding the charge submitted that in the circumstances and factual background of this case, the contravention must be considered to be technical in nature and the breach venial in character meriting a lenient view being taken.

7. The learned counsel submitted that the charges under Sections 38 and 55 cannot be invoked and in expatiating on this plea urged that under Section 38, no licensed dealer shall in his capacity, as such dealer either own or have in his capacity as such dealer either own or have in his possession, custody or control any gold which has not been included in such return. It was urged that the ornaments under seizure having been recovered from the house of the appellants, it cannot be contended that they were in possession, custody or control of the appellants in their capacity as dealers within the meaning of Section 38. I am not able to accept this contention of the learned counsel because Section 38 has to be read in conjunction with Section 56 and under Section 56 every licensed dealer shall furnish to the Administrator a return containing particulars of gold owned, possessed, held or controlled by him with reference to the quantity, description and other particulars and every such return shall be made in triplicate, of which one copy shall be authenticated and signed by the Gold Control Officer and thereafter returned to the dealer and the copy so returned shall be retained by the dealer as evidence of the return made by him under Section 56. Section 38 stipulates that except in the case of any quantity of gold acquired, accepted or received after the date of making of any return referred to under Section 56, no licensed dealer shall in his capacity of such dealer either own, have in his possession, custody or control any gold which has not been included in such return, provided that any gold acquired or received after the date of making such return shall be included in the next succeeding return.

In the instant case, the appellants being admittedly gold dealers have not filed any such return as enjoined on them under Section 56 and therefore, the charge of contravention of Section 38 is clearly made out against the appellants. The plea of the learned counsel with reference to the applicability of Section 55 is also devoid of substance because under Section 55 (3) of the Act no licensed dealer shall in his capacity as licensed dealer either own or have in his possession, custody or control any gold which has not been included in the accounts referred to in Section 55 (1) of the Act. Here in the present case, the ornaments under seizure, according to the statement of the appellant Chandrasekhara Pal himself, having been purchased from goldsmiths, were kept for purposes of sale. In such a situation, ornaments purchased for purposes of sale by a licensed dealer is obviously in his capacity as a licensed dealer and non-accountal of the same as per law would clearly make for infraction of Section 55 of the Act.

8. I therefore find that the charges of contravention levelled against the appellants have been clearly brought home and made out by the evidence on record, So far as the quantum of redemption fine and the penalty is concerned, it was urged that the appellant has never come in for adverse notice either before or after and appellant Chandrasekhara Pal has been in the business for over 50 years enjoying high reputation. The purity of the ornaments under seizure as evidenced by the mahazar is only 20 carat. Taking the purity of the ornaments under seizure and the value of the ornaments fixed at Rs. 24,000/- by the adjudicating authority and keeping in mind the clean antecedents of the appellants and their long number of years in gold business without any contravention, I feel interests of justice call for reduction in the quantum of redemption fine as well as penalty. Accordingly, I order :- (1) Fine in lieu of confiscation be reduced from Rs. 10,000/- to Rs. 5,000/-(Rupees five thousand only); (2) Penalty of Rs. 1000/- be reduced to Rs. 500/- (Rupees five hundred only) each for contravention of Section 16 (1), (7), (10) and (11) of the Gold (Control) Act, 1968; (3) Penalty of Rs. 1000/- be reduced to Rs. 250/- (Rupees two hundred and fifty only) each for contravention of Section 55 of the Act; and (4) Penalty of Rs. 500/- be reduced to Rs. 75/- (Rupees seventy five only) each for contravention of Section 38 of the Act.

9. The learned counsel for the appellants drew my attention at this stage that the appellants had remitted a sum of Rs. 15,000/- pursuant to the original order on 26-11-1980 and still the ornaments have not been restored to the appellants. The authorities are directed to verify this fact and restore the ornaments without further delay to the appellants on such verification of the payment of the redemption fine.

In respect of the excess redemption fine paid by the appellants over and above the quantum fixed herein, the same shall be returned to the appellants. The appellants are also entitled to the refund of excess amount of penalty paid by them in terms of this order.

10. Except for the above modifications, the appeals are otherwise dismissed.


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