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Shri Rajabali HussaIn Merchant Vs. Gold Control Administrator - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Mumbai
Decided On
Judge
Reported in(1983)LC1201DTri(Mum.)bai
AppellantShri Rajabali HussaIn Merchant
RespondentGold Control Administrator
Excerpt:
.....gold totally weighing 5.6.7 grams valued at rs. 36,500/- in contravention of section 8(1) of the gold control act, 1968 and also that the appellant along with two other persons have dealt in gold without obtaining a licence and thereby contravened the provisions of section 27 of the gold (control) act, 1968. the said show cause notice was in respect of invoking of the provisions of section 71 of the gold control act, 1968 for confiscation and why penalty under section 74 should not be imposed on them. the adjudicating order was passed by mrs. vijay zutshi, deputy collector of customs & centra excise, ahmedabad vide order no.f-xvii/8-12/a//17 dated 7th july. 1980. the learned deputy collector had ordered absolute confiscation of four pieces of primary gold weighing 576.7 gms. valued.....
Judgment:
1. Shri Rajabali Hussain Merchant has filed an appeal being aggrieved from the Order passed by the Collector of Customs (Appeals; Bombay vide Order No. S/49-23/82 GC (Ahmedabad) dated 19.11.82, registered with the registry vide G.C. Bom) A. No. 15 of 1983. Shri Dinkarrai R. Dhorde had also filed an appeal before the Tribunal being aggrieved from the Order No. S/49-25,82 GC Ahmedabad) dated 9.11.82 passed by the Collector of Customs (Appeals), Bombay.

2. Briefly, the facts of the case are that on 24.10.1977, on the basis of an information, the officers of Customs Division, Bhavnagar had visited Room No. 304 of Shri Shakti Guest House, Mali Tehra, Bhavnagar and found S/Shri Rajabali Hussain Merchant and Dinkerrai Ramchhoddas Dhorde to be in occupancy of the said room and had conducted search in presence of three independent witnesses, as a result of which they recovered four pieces of primary gold weighing 576.-00 gms. of 23 carats of purity valued at Rs. i6,500/- secreted in a specially made jacket put on by Shri Rajabali Hussain Merchant of Bombay. As no satisfactory documents for legal possession and acquisition thereof we/e produced, the same was seized in the presence of independent ranch witnesses under the reasonable belief that the gold was liable to confiscation under the relevant provisions of Gold (Control) Act, 1968 and Customs Act, 1962. Statements of S/Shri R.H. Merchant and Dinkerrai R. Dhorne were recorded under Section 108 of the Customs Act 1962 on the 25th day of October, 1977. A show cause Notice No. XVI1/8-10/OA/77 dated 14.4.78 was issued to them desiring them to show cause, as they had bought, accepted, or otherwise received and acquired the ownership, possession, custody and/or control of 4 pieces of primary gold totally weighing 5.6.7 grams valued at Rs. 36,500/- in contravention of Section 8(1) of the Gold Control Act, 1968 and also that the appellant along with two other persons have dealt in gold without obtaining a licence and thereby contravened the provisions of Section 27 of the Gold (Control) Act, 1968. The said show cause notice was in respect of invoking of the provisions of Section 71 of the Gold Control Act, 1968 for confiscation and why penalty under Section 74 should not be imposed on them. The adjudicating order was passed by Mrs. Vijay Zutshi, Deputy Collector of Customs & Centra Excise, Ahmedabad vide Order No.F-XVII/8-12/A//17 dated 7th July. 1980. The learned Deputy Collector had ordered absolute confiscation of four pieces of primary gold weighing 576.7 gms. valued at Rs. 36,500/-under Section 71 of the Gold (Control) Act 1968 and had also imposed a personal penalty on Shri Rajabali Hussain Merchant at Rs. 35,000/- and on Shri Dinkerrai Ranchhoddas Dhorde at Rs. 10,0C0/-. The said order appears from page 9 to 16 of the Paper Book filed by the appellants. Being aggrieved from the aforesaid order the appellants had filed an appeal before the Collector of Customs (Appeals), Bombay appearing at pages 7 to 8 of the Paper Book of the appellant. Vide order No. S/49-185/80 GC/op. dated 23.12.80, the learned Appellate Collector of Customs had ordered for the release of gold on payment of redemption fine of Rs. 12,'00/- subject to the usual conditions of conversion into ornaments and the personal penalty was reduced to Rs. 6000/- from Rs. 35,000/-, in the case of Shri Rajabali H. Merchant, whereas in the case of Shri Dinkerrai R. Dhorde, the learned Collector of Customs (Appeals) had held that he was acting as a broker and penalty of Rs. 500/- was imposed. The Revenue being aggrieved from the abovesaid order, in the case of Shri R.H. Merchant, had filed an application for review proceedings before Government of India, Ministry of Finance, Department of Revenue, New Delhi and Shri Dhorde had also filed a revision application before Govt. of India for squashing the penalty of Rs. 500/-. The said applications were heard by Shri J. Datta, Additional Secretary to the Government of India who had set aside the orders passed by the Appellate Collector and had directed the Collector of Customs (Appeals) to reconsider both the appeals after giving them an opportunity of oral representation to the parties. As per the directions of the Government of India, Collector of Customs (Appeals) Bombay, had reheard both t e appellants and had confirmed the Order passed by the Deputy Collector of Customs & Central Excise, Ahmedabad.

Being aggrieved from the aforesaid order, both the appellants have corne in appeal before us. Both the appeals arise from the same order and for the sake of convenience we are disposing of both the appeals by a consolidated order.

3. Shri D.H. Shah, Advocate has appeared on behalf of Shri Rajabali H.Merchant and Shri Haresh Mehta has appeared on behalf of Shri Dinkerrai R. Dhorde.

4. Shri D.H. Shah, the learned Advocate for the appellant has submitted before us that the alleged offence was committed at Bhavnagar on 24.10.77 and 4 pieces of gold weighing 576.700 grams having a purity of 23 carats with worth Rs. 36,400/- was seized. He has submitted that he does not dispute the purity and value of the gold. He has further submitted that the appellant was in jail for 9 days. He has also submitted that simultaneously there were proceedings under the Customs Act. The said proceedings were dropped by Revenue vide Order No.VIII/0-3/DG/78 dated the 7th July, 1980 which appears at pages 17 to 22 of the Paper Book filed by the appellant and the adjudicating authority under the Gold Control Act as well as Customs Act was the same.

Aggrieved by the aforesaid order, the appellant had filed an appeal before the Collector of Customs (Appeals) Bombay and the said appeal was partly accepted. He has further submitted that the appellant has never disputed the confiscation of gold and has submitted that ipso facto it is contravention of Section 8 of the Gold Control Act and lenient view should be taken. The learned Advocate has submitted before us that the appellant is also facing criminal prosecution and in this long period of 6 years, the appellant had to attend the Court as many as 42 times at Bombay as well as Bhavnagar. The appellant's age is 68.

At this age it is very difficult for the appellant to have so much strain, especially when he has undergone detention in jail for 9 days The learned Counsel has submitted that the appellant's statements were recorded under coercion and that he had already undergone too much strain and stress. The learned Counsel for the appellant has pleaded for mercy and lenient view. The learned Counsel has placed reliance on a Supreme Court Judgment in the case of Arvind Mohan Smha v. Amulya Kumar Biiwas and Ors. reported in 1974 Criminal Law Journal 885 : 1975 Cen-Cus 87(D). In the said judgment the Hon. Supreme Court had held that "every contravention of the Customs Act or the Gold Control Rules cannot, without more, be assumed to be fraught with consequences of national dimensions. The broad principle that punishment must be proportioned to the offence is or ought to be of universal application save where the statute bars the exercise of judicial discretion either in awarding punishment or releasing an offender on probation in lieu of sentencing him forthwith. It was also held by the Hon. Supreme Court that under the definition contained in Rule 126-A(d)''gold, means, gold" and no rule of statutory construction can permit the definition to be altered materially so as to read "Gold, means gold but shall, not include smuggled gold". It is therefore erroneous To say that person was not liable to make under Rule 126-1 a declaration as to the gold in his possession. Shri Shah has further submitted that panchanama etc, were under the Gold Control Act and not under the Customs Act, 1962. In the Review proceedings, Govt. of India had considered the appellant's plea that the Appellant Collector had not referred to Section 71 and it was not correct to rely on the previous convict tion in the case of R.H. Merchant as it was not cited in the show cause notice. The inconsistency in the statements of R.H. Merchant on the one hand and his wife on the other, is also not a fact which could invalidate the Appellate Collector's orders altogether for being silent on that aspect. The learned Advocate has also submitted that there no dispute as to the nature of the gold, i.e. it is of high purity and not of foreign origin The learned Deputy Collector had held that the gold is not of foreign origin in the absence of any corroborated evidence and she has given the benefit of doubt to the appellant and the relevant portion of the order is at page 15 of the Paper Book of the appellant.

He had also pleaded before us that under Section 73 of the Gold Control Act, the learned Deputy Collector while passing the order as to the confiscation of gold, should have given an option to pay fine in lieu of confiscation. He has emphasised the word 'may' in Section 73 ; "whenever any confiscation is authorised by this Act, the officer adjudging it may, subject to such conditions as may be specified in the order adjudging the confiscation, give to the owner thereof an option to pay in lieu of confiscation such fine, not exceeding the value of the thing in respect of which confiscation is authorised, as the said officer thinks fit." He has pleaded before us that the word "may" gives a discretion to the adjudging authority but this discretion has to be exercised judicially and this discretion is coupled with duty. He has further pleaded that neither the lowci authority nor the appellate authority has given reason why this discretion has not been exercised in'favour of the appellant. He has pleaded before us that in view of the facts and legal position stated above, the appellant's appeal should be accepted or in the alternative a lenient view should be taken and appellant's gold weighing 576.700 grams, which is his life time savings, should be released with an option to redeem the gold on payment of fine. He has also pleaded for mercy.

5. The learned Departmental Representative on the other hand has submitted that the plea as to the redeeming of gold en payment of fine has not been pleaded by the appellant neither before3 the Deputy Collector nor before the Collector of Customs (Appeals) and even there is no direction from the Government of India to the Collector (Appeals) for the release of gold on payment of fine. The learned Departmental representative has relied on para 15 of the Order passed by the Dy.

Collector of Customs & Excise, page 12 of the Paper Book of the appellant had has stated that there was no coercion. He has also submitted that the statement of Smt. Daulatkhana R. Soldier at page 58 of the Paper Book filed by the Revenue is worth perusal. She has stated in her statement that her husband had collected Rs. 40,000/- from her for business Whereas, Mr. Merchant in his statement has stated that he had purchased the gold for the marriage of his daughters which is at page 10 of the Paper Book filed by the Revenue. He has further stated that he had stayed in the hotel room under a false name. The learned Departmental Representative has prayed for the dismissal of the appeal.

6. In reply, the learned Advocate for the appellant has submitted the real fact that the appellant had stayed under a false name in the hotel room should not lead to any adverse inference. In the panchnama the appellant had written his name correctly and had fully rectified the mistake of giving a wrong name. He has again prayed before us that in view of the provisions of Section 73 of the Gold (Conti of) Act, the geld should be released to the appellant on payment of fine in lieu of confiscation, as mis gold represents the life time savings of the appellant.

7. Shri Harish Mehta, the learned Counsel for Shri D.R. Dhorde, has submitted before Us that there is no offence of abetment and in the show cause notice there is no charge as~ to abetment or as to acting as a broker. He has slated that facts and legal position have already been explained by Shri D.H. Shah, the learned Counsel for the appellant Shri Merchant. He has drawn our attention to Exhibit C, page 4, para 5 of the Paper Bock which is Govt. of Indians Order. He has submitted that since the charge is not specific and observaiions of the Govt. of India are in favour of the appellant, the appellant's appeal should be accepted.

8. The learned Depaitmertal Representative on the other hand has relied on the Order passed by the Deputy Collector of Customs and Excise.

Ahmedabad and has submitted that the appeal filed could be dismissed, 9. We have heard both the sides. We feel that Shri Rajabali H. Merchant has already suffered a lot. He has spent 9 days in jail and has gone to the criminal Court for facing prosecution at the age of 68, 42 times, as has been stated by Shri D.H. Shah, learned Counsel for the appellant. Since the learned Counsel for the appellant has accepted the purity and confiscation of gold and has accepted the contravention of Section 8 of the Gold Control Act and has pleaded for mercy and keeping in view of the Supreme Court Judgment cited by the learned Counsel in the case of Arvind Mohan Sinha v. Amulya Kumar Biswas and Ors. we very respect-l fully follow the findings of the Supreme Court laying down the broad principles as to the proportion of punishment. The Hon.

Supreme Court has held that every contravention of the Customs Act or the Gold Control Rules cannot, without more, be assumed to be fraught with consequences of national dimensions. The broad principle that punishment must be proportioned to the offence is or ought to be of universal application save where the statute bats the exercise of judicial discretion either in awarding punishment or releasing an offender on probation in lieu of sentencing him forthwith. Since the learned Counsel for the appellant has nowhere' disputed the purity of gold as that of 23 cts and the appellant has not disputed the confiscation of gold and had ipso facto accepted the contravention of Section 8 of the Gold Control Act and has pleaded for merey, we feel that it is a fit case where the discretion, while passing the order as to confiscation an option to redeem the gold on payment of fine should have been given to the appellant. Keeping in view the facts and circumstances of the case, we hereby direct the Revenue to release the gold on payment of redemption fine of Rs. 10,000/- (Rupees ten thousand only) within one month from the date of the communication of this order to the appellant. We further reduce the personal penalty imposed on the appellant at Rs. 35,000/- to Rs. 5,000/-(Rupees five thousand only).

The penalty in excess of Rs. 50,000- paid by the appellant, if any, should be refunded to him. Except for this modification, The order passed by the lower authorities is confirmed and for statistical purpose, the appeal G.C. (Bom.) No. 15/83 is rejected.

10. After hearing both sides for appellant Shri D.R, Dhorde, appeal No.GC (Bom.) 14/83, we find that there is no charge of abetment or of working as a broker. The evidence of Shri R.H. Merchant as a co-accused is not sufficient enough to justify the imposition of fine. We hereby set aside the order of imposition of penalty of Rs. 10,000/- against the appellant Shri Dinkerrai R. Dhorde. In the result Appeal No. 14/83 is accepted.


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