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Collector of Central Excise Vs. S. Uthamchand Jain - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Tamil Nadu
Decided On
Reported in(1986)(6)LC486Tri(Chennai)
AppellantCollector of Central Excise
RespondentS. Uthamchand Jain
Excerpt:
.....to the effect that even honorary employment would suffice as employment for the purpose of rule 2(f) proviso (f). but it should be noted that the said order of the government of india referred to continuous employment for over 5 years under a single dealer, unlike the case of the present respondent who claims to have been employed under two different persons-in an honorary capacity under one and as a paid employee under the other. "a person who was employed in the shop of a licensed dealer (hereinafter referred to as the said dealer) and who is found by the administrator after making such inquiry as he may consider necessary, to possess experience in dealing in, or making, manufacturing, preparing or repairing of,...for a period of not less than five years, if such application is.....
Judgment:
1. An application of Shri S. Uthamchand Jain, respondent herein, for issue of a gold dealer licence, was rejected by the Deputy Collector of Central Excise (Gold), Madras, under order dated 11-8-83 in C. No.XVII/7/41/83 GC. On appeal therefrom the Collector (Appeals) under order dated 25-2-84 set aside the said order and directed that the respondent be issued a licence, if his application is otherwise in order. It is against this order that the Department has preferred the present appeal.

2. We have heard Shri V. Ramachandran, SDR for the Department and Shri P.R. Krishnan for the respondent.

3. The Deputy Collector had rejected the application on the ground that the number of dealers had been increasing from 294 in 1980 to 301 in 1981 and 322 in 1982 as against the turnover of 2674 gms., 2147 gms.

and 2178 gms. in the said years respectively and therefore, grant of licence would not be justified and further that the respondent does not satisfy the provisions of proviso (f) to Rule 2(f) of the Gold Control (Licensing of Dealers) Rules, 1969, hereinafter referred to as the Licensing Rules. The Collector (Appeals) agreed with the finding of the Deputy Collector that there was no need to increase the number of dealers in Madras city having regard to the figures mentioned earlier.

But he differed from the Deputy Collector on the other finding and held that the respondent satisfied the provisions of proviso (f) to Rule 2(f).

4. The SDR contended that the provision in proviso (f) to Rule 2(f) was not satisfied by the respondent since he had not been an employee under a licensed dealer for the period of five years stipulated in that proviso. Shri Krishnan, on the other hand, contended that in view of the certificate dated 16-10-1978 produced by the respondent which established that the respondent had been an honorary employee in Ramesh Jewellery for the period 1-1-77 to 15-10-73 and the further proof produced, including the certificate dated 1-2-83 and the books of account of Tej Jewellery, the employment of the respondent under Tej Jewellery for the period 16-10-78 to 31-1-83 is fully established and hence the respondent has proved his employment as well as his experience during a period of five years; therefore he is entitled to the benefit of proviso (f) to Rule 2(f). Shri Krishnan referred us to a decision of the Government of India in F. No. 115/109/78 G.C.I., dated 17-5-1979 to the effect that even honorary employment would suffice as employment for the purpose of Rule 2(f) proviso (f). But it should be noted that the said order of the Government of India referred to continuous employment for over 5 years under a single dealer, unlike the case of the present respondent who claims to have been employed under two different persons-in an honorary capacity under one and as a paid employee under the other.

"a person who was employed in the shop of a licensed dealer (hereinafter referred to as the said dealer) and who is found by the Administrator after making such inquiry as he may consider necessary, to possess experience in dealing in, or making, manufacturing, preparing or repairing of,...for a period of not less than five years, if such application is made within a period of sixty days of his leaving such employment...." Having regard to the words used it appears clear that proviso (f) contemplated a case of employment under a single deabr and experience in that capacity for a period of not less than five years. This will be clear if we look into the context under which relief under proviso (f) to Rule 2(f) was being granted. Rule 2(b) referred to the experience of the applicant with regard to dealing in, or making, manufacturing, preparing, repairing or polishing of ornaments. This did not stipulate any minimum period of that experience. The remaining Sub-clauses laid down the other conditions to be looked into in the grant of licence.

Sub-clause (f) referred to the need to increase the number of licensed dealers. But under the proviso thereto it was made clear that this particular condition (need to increase the number of licensed dealers) need not be considered in circumstances detailed in the provisos (a) to (f) of that Sub-clause. Proviso (f) dealt with a person who had been employed under a licensed dealer and who on termination of such employment was making his own application for issue of licence. It was evidently to provide against the contingency of such persons being left without employment that this proviso was incorporated. In this connection proviso (e) would also be relevant. That dealt with cases of persons who had been partners for a period of not less than five years in any licensed firm and who made an application for grant of licence within a period of 60 days of their leaving such a firm. Therefore, even in the case of partners (who would have had direct experience in making, manufacturing, preparing, repairing etc. of gold ornaments) the necessary condition laid down for benefit under proviso (e) was that they should have been partners of a firm for not less than five years and should make an application within 60 days of their leaving the said partnership. When this period of five years continuously as a partner in a single firm is stipulated in case of partners themselves, it is hard to accept the contention that in respect of employees-claiming benefit under proviso (f)-who had to be provided for on the termination of their employment, they need not have been employed in a single firm for the requisite period of five years but could spread it over several firms. Further, the acceptance of the argument of the learned consultant for the respondent would give rise to situations where the employment under different firms need not even be continuous and may be spread over a large number of years with breaks of indeterminable periods, the last spell being even a very short period. Such a view would also result in making the condition regarding application being made within 60 days of leaving a job easy to evade-by taking a job for a few days with a last employer,' after a discontinuation for any length of time, and apply thereafter. In view of the provisions of Rule 2(b) and proviso (e) to Rule 2(f), we are satisfied that the provisions of proviso (f) to Rule 2(f) would come into operation only in respect of persons who had been continuously in employment for over a period of five years in a shop of a licensed dealer and not in several shops of several licensed dealers.

6. In view of this conclusion, it is not necessary to go into the further question whether the period of work in Ramesh Jewellery in a honorary capacity on the part of the respondent would be employment as mentioned in proviso (f) to Rule 2(f).

7. Since we hold that the respondent was not entitled to the benefit of proviso (f) to Rule 2(f), his application ought to be considered under Rule 2(a) to (f) without benefit of the proviso (f) to Rule 2(f). As earlier mentioned, the number of licensed dealers had continuously increased from 1980 to 1982 without any proportionate increase in the total turnover, to justify the grant of further licences, this is what has been held by the Deputy Collector and upheld by the Collector (Appeals) also. We, therefore, hold that the respondent was not entitled to grant of the licence applied for. Accordingly, the appeal is allowed and the order of the Collector (Appeals) is set aside, restoring the order of the Deputy Collector referred to supra.


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