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Jhaveri Brothers, Jewellers Represented by Its Partner Himmathmal Vs. Union of India (Uoi) and ors. - Court Judgment

LegalCrystal Citation
SubjectCustoms
CourtAndhra Pradesh High Court
Decided On
Case NumberWrit Petition Nos. 733 and 811 of 1978
Judge
Reported in1983(12)ELT469(AP)
ActsCustoms Act, 1962 - Sections 2(8), 11, 111, 110(2), 112, 123, 124 and 124A; Foreign Exchange Regulations Act, 1947 - Sections 8(1); Gold (Control) Act, 1968 - Sections 71, 79, 116, 116(2), 117 and 117(1); Defence of India (Gold Control) Rules, 1963; Gold (Control) Ordinance, 1968; General Clauses Act, 1897 - Sections 6 and 6(1); Gold (Control) Act, 1965; Gold (Control) Act, 1963; Income Tax Act, 1961 - Sections 297(2); Gold (Control) Rules, 1962; Defence of India (4th Amendment) Rules, 1966 - Rules 126(1), 126(1)(10), 126(1)(16), 126A, 126G, 126H, 126H(2), 126L, 126L(16), 126M, 126M(1), 126N and 126N(1); Defence of India Rules, 1962; Gold (Control) Regulations; Constitution of India - Article 226
AppellantJhaveri Brothers, Jewellers Represented by Its Partner Himmathmal
RespondentUnion of India (Uoi) and ors.
DispositionPetition dismissed
Excerpt:
- maximssections 2(xv) & 3(1) & (3): [v.v.s. rao, n.v. ramana & p.s. narayana, jj] ghee as a live stock product held, [per v.v.s. rao & n.v. ramana, jj - majority] since ages, milk is preserved by souring with aid of lactic cultures. the first of such resultant products developed is curd or yogurt (dahi) obtained by fermenting milk. dahi when subjected to churning yields butter (makkhan) and buttermilk as by product. the shelf life of dahi is two days whereas that of butter is a week. by simmering unsalted butter in a pot until all water is boiled, ghee is obtained which has shelf life of more than a year in controlled conditions. ghee at least as of now is most synthesized, ghee is a natural product derived ultimately from milk. so to say, milk is converted to dahi, then butter......ordermadhava reddy, j.1. these two writ petitions by a firm carrying on the business of purchase and sale of jewellery at abid road, hyderabad call in question the order of the collector of customs and central excise, hyderabad confirmed on appeal by the gold control administrator and on revision by the government of india.2. i may first state the facts relating to writ petition no. 811/78 which raised two main questions of which one is common to this and the other writ petition no. 733/78.3. on 26-11-66 nine insured parcels sent from bombay by m/s. chandu-lal kushalchand were taken delivery of by the petitioner in the presence of the officials of the customs and central excise department. they were immediately opened and these parcels were found to contain bangles, kadas, kangan, gokuru.....
Judgment:
ORDER

Madhava Reddy, J.

1. These two writ petitions by a firm carrying on the business of purchase and sale of jewellery at Abid Road, Hyderabad call in question the order of the Collector of Customs and Central Excise, Hyderabad confirmed on appeal by the Gold Control Administrator and on revision by the Government of India.

2. I may first state the facts relating to writ petition No. 811/78 which raised two main questions of which one is common to this and the other writ petition No. 733/78.

3. On 26-11-66 nine insured parcels sent from Bombay by M/s. Chandu-lal Kushalchand were taken delivery of by the petitioner in the presence of the officials of the Customs and Central Excise Department. They were immediately opened and these parcels were found to contain bangles, kadas, kangan, gokuru and rings, in all 66 items all of gold weighing 4577.450 gms. The said officials held a panchanama, put the articles in a box and sealed the same. That panchanama was signed by Sarvasri Vinayachand Jain, Mokirey Narayan and Chintalacharuvu Brahmaiah and the officials of the Customs Department. In the panchanama it was stated that there was suspicion as to their source and hence they were sealed and left with the petitioner-firm for safe custody till the completion of the investigation. In the panchanama were listed 66 items. On 13-12-66 the said parcels were opened and inspected in the presence of panchas and after drawing up a mahazar were seized by the Customs and Central Excise Department. In the mahazar that was drawn up it was stated as follows :

'As the officers felt that the above said gold ornaments were not finished ornaments and also as they had reason to believe that the said gold ornaments were made out of foreign gold the said gold ornaments described above 66 in number weighing 4577-450 gms. were seized to the Government....

The seizure was effected as the officers were of the view that the provisions under the Customs Act, 1962 and the Defence of India (Gold Control) Rules, 1963 as amended were infringed.'

In the panchanama it was also noted that:

'the said ornaments are used old ornaments purchased from a licensed gold dealer of Bombay and that they are fully finished ornaments with 'Nakash' marks in them generally used by Rural ladies of Rajasthan and also that there is no reason to believe that the gold is of foreign origin.'

The mahazar also recorded the opinion of the panchayatdars to the following effect:

'The four panchayatdars to this mahazar also witnessed the proceedings and tested the gold on touch stone mentioned and opined to be 23-1/4 C.T. fineness and that they are fully finished ornaments and that they are old ornaments, in their opinion.'

4. The Collector, Customs and Central Excise, Hyderabad then issued a notice C. No. VIIl/10/18/67/Cus. dated 16th May, 1967 to the petitioner calling upon him to prove in terms of the provisions of Section 123 of the Customs Act, 1962 that the gold in respect of the so called ornaments seized from their possession was not smuggled and as to why for the contravention of the provisions enumerated in the said notice, the gold in the so called ornaments should not be confiscated to the Central Government and why a personal penalty on the persons concerned in the purchase of smuggled gold, should not be imposed. The petitioners were called upon to submit their written explanation and produce all evidence on which they intended to rely in support of their defence and also whether they wished to be heard in person. The petitioners were also intimated that in case no cause was shown against the action proposed to be taken within ten days from the date of the receipt of the notice and/or if they did not appear before the Adjudicating officer when the case was posted for hearing the case could be decided ex-parte. Identical notices were issued on 30-5-67 to M/s. Chandulal Kushalchand and to three others from whom the said 66 items of 'gold ornaments' were said to have been purchased by the petitioners. The action proposed to be taken against them was for the alleged contravention of the prohibition imposed under Section 11 of the Customs Act and under Section 8(1) of the Foreign Exchange Regulations Act, 1947 read with Notification No. 12/11/Fp. 4B, as amended rendering the gold liable for confiscation to the Central Government under Section 11(d) of the Customs Act, 1962 and rendering them personally liable for imposition of penalty. Upon the representation of the petitioners that the Collector, Customs and Central Excise, Hyderabad had already formed an opinion and that the enquiry should be done by another officer, the case was transferred to the Collector, Customs and Central Excise, Bangalore who was constituted as Collector, Customs and Central Excise, Hyderabad for the purpose of these cases. It may be noticed at this stage that the Gold (Control) Rules framed under the Defence of India Rules were repealed by the Gold (Control) Ordinance No. 6/68 which came into force on 29-6-78. The Gold (Control) Ordinance itself was repealed by the Gold (Control) Act 45 of 1968 with effect from 1-9-1968. The Collector, Customs and Central Excise, Hyderabad (of Bangalore) now for the first time in supersession of the two earlier notices referred to above issued a notice No. VIII/10/19/68/Cus. (O.R. 16/68) Bangalore dated 24-12-68 calling upon the petitioners and the aforesaid four firms who had purchased these 'gold ornaments' and sold the same to the petitioners to show cause :

'(i) Why the said 66 items of gold under seizure should not be confiscated to Government under Section 11(d) of Customs Act, 1962 and

(ii) Why penalty should not be imposed on them under Section 11(d) of Customs Act, 1962 for acquiring possession of and/or being concerned in transporting/depositing/concealing/harbouring/purchasing/selling or in any way dealing with the above said gold which they had reason to believe are liable to confiscation under Section 11(d) of Customs Act, 1962.

5. They were directed to produce evidence to prove as required by Section 123 of the Customs Act, 1962 that the gold in respect of the said 66 items under seizure is not smuggled gold. In the annexure to the said notice the facts leading to the issuance of the said notice were stated. It was alleged therein that 19 items contained in three parcels 'were found to be in polished condition, with ends closed and the remaining 47 items were found to be crude and unpolished with ends not joined and of a very high fineness.' It was further alleged that the petitioners had acquired possession and are concerned in purchasing the said 66 items of gold under seizure with the knowledge of their liability to confiscation and that they had purchased the same without verifying the source of their origin or their illicit import. An enquiry was held and the Collector of Customs, Hyderabad by his order dated 16-5-70 held that the goods under seizure were not smuggled and that there is no conclusive evidence to show that the goods under seizure are manufactured from smuggled goods and accordingly extending the benefit of doubt to all the parties concerned, dropped the proceedings against them under the Customs Act, 1962. However, the Collector, Customs, Hyderabad (Bangalore) had simultaneously issued another notice C. No. XVII/8/45/68 dated 24-12-1968 to the petitioner-firm and the aforesaid four firms of Bombay alleging that they had contravened Rule 126-H(2)(b) of the Defence of India (4th Amendment) Rules, 1966 in as much as they purchased or otherwise acquired gold, not being ornaments, from persons other than licensed dealers/ refiners and which has not been included in declaration made under Rule 126-1 of Defence of India Rules and thus having abetted the commission of the said offence had contravened Rule 126-L(16) of the Defence of India Rules. The petitioners were called upon to show cause why penalty should not be imposed on them under Rule 126-L(16) of the Defence of India (4th Amendment) Rules, 1966 and why for the contravention of the above Rules the said 16 items should not be confiscated under Rule 126-M(1) of the Defence of India (4th Amendment) Rules, 1966. The petitioners were called upon to submit their written statement and produce evidence in support of their defence, if any, within fifteen days. In their defence the petitioners pleaded that the issue of show cause notice under Gold (Control) Rules, 1962 was misconceived as no seizure had taken place under these Rules. The proceedings so far conducted were purely under the Customs Act, 1962 and the essential requirements of Rule 126-M viz., 'reasonable belief', not being existent, no further action could be taken under the Gold Control Rules. They also pleaded that what was seized were ornaments and not gold. They requested for personal hearing and cross examination of the officer who had effected the seizure. The four Bombay firms also submitted their written explanation and appeared through their counsel. A personal hearing was also granted. At the hearing, the Advocate stated that he did not want to cross-examine any of the mahazar witnesses or the officer effecting the seizure and that he would base his arguments on the evidence on record. The Collector by his order dated 16-5-1970, came to the conclusion that 19 items comprising of 8 kangans and 11 bangles were finished ornaments and accordingly ordered the release of the said items. But with respect to the remaining 47 items he opined that 'they cannot be considered as ornaments and they are nothing but primary gold' and as such the charge is proved. He accordingly directed the 47 items of gold weighing 3539.950 grams liable to confiscation under Rule 126-N(i) of the Defence of India (4th Amendment) Rules, 1966 and that the petitioners are also liable for penal action under Rule 126-LG6) of the Defence of India Rules. While ordering confiscation of the said 47 items of gold he also imposed a penalty of Rs. 2,000/- on the petitioners. Aggrieved by that order the petitioners and four others preferred appeals before the Gold Control Administrator, New Delhi. The Gold Control Administrator, confirmed the order of the Collector and rejected the appeals by his order dated 9th June, 1972. The petitioners carried the matter in revision to the Government of India. The Government of India by its order dated 7th October, 1977 did not find any justification to interfere with the order under appeal and accordingly rejected the same.

6. The principal contentions raised in this writ petition are : (1) the finding of the Collector, Customs which is confirmed by the Gold Control Administrator on appeal and by the Government of India on revision that the 47 items of gold seized from the insured parcels were primary gold is. perverse and is not supported by any material whatsoever. (2) that the notice issued by the Collector, Customs on 24-12-68 under the Gold Control Rules is illegal and barred by time as it was issued beyond six months of the date of the seizure prescribed under Section 79 of the Gold Control Act.

7. The facts in writ petition No. 733 of 1978 are similar to those in writ petition No. 811/78. The petitioner-firm received three parcels of 'gold ornaments' weighing 1579.050 gms from M/s. Chandulal Kushalchand, Bombay, their commission agents. Those items were entered in the statutory registers maintained by the petitioners and were sold to other local licensed dealers in Secunderabad under proper bills. These transactions were entered in the statutory registers maintained by the petitioners. On 21-11-1966 the Central Excise Officers visited the premises of the petitioner-firm at 7.30 P.M. and enquired about the balance of stock of the jewels received in the said three parcels. The petitioner-firm produced the said jewellery consisting of one bungdi weighing 40.350 gms and four bangles popularly known as 'Almash Kadiayalu' and two bangles with 'Nakash' and two rings popularly known as 'Kamraki' rings in all weighing 688.1 gms as also the statutory registers showing the entries relating to these items. The customs officials put the said gold ornaments in a box and sealed them. On 13-12-1966 these gold ornaments were seized under two mahazars prepared and signed in the presence of some of the dealers in jewellery who were brought by the customs officials themselves. A show cause notice was issued by the Asstt. Collector, Central Excise, Hyderabad II Division on 10-5-68 which was served on the petitioners on 6-6-68 proposing to confiscate the jewellery seized under Rule 126 H for the alleged contravention of Rules 126-H (2) (b) and 126-G of the Gold Control Rules and also proposing to impose a penalty under Rule 126-L (16) of the said Rules. The petitioner submitted his objections. The Collector, Customs and Central Excise, by his order dated 21st July, 1969 held that what was seized was 'primary gold' which is in the shape of crude and semi finished kadiyas and 'anguthics, and confiscated absolutely to the Central Government and imposed a penalty of Rs. 2,000/-. The petitioners preferred an appeal before the Gold Control Administrator who by his order dated 12th June, 1972, confirmed the order of the Collector and rejected the appeal. The revision petition filed by the petitioners against the said order was also rejected by the Government of India on 12th March, 1977. The only point that arises in this writ petition which is common to the other petition as well is whether what was seized by the customs authorities on 13-12-66 was 'primary gold' or gold ornaments. I may first consider the common question arising in these writ petitions.

8. That 66 items of gold articles were purchased by the petitioner-firm from M/s. Chandulal Kushalchand Mumbadevi Road, Bombay is not in dispute. Some of these items were purchased directly by Chandulal Kushalchand themselves and the remaining were purchased by Chandulal Kushalchand from three other firms of Bombay, who in turn had purchased them from different individuals whose identify or whereabouts could not be established. So far as the petitioner is concerned, all the items were supplied to him by Chandulal Kushalchand of Bombay as their agent and were consigned to them under parcels by the said Chandulal Kushalchand. They are all supported by bills dated 18-11-1966. They are duly entered in the registers maintained by the said Chandulal Kushalchand and also by the petitioner. The description of the articles as given in the bills is either bangles, gokuri, kada, kangan or rings. The number of items and the net weight of each of them is also duly entered in the bills. Their value also is given in the bills. The fineness of the gold with which these 'gold ornaments' are made as opined by the panchas at the time of seizure on 13-12-66 is 23-1/4 C.T. fineness. While the petitioners contend that the said articles are 'gold ornaments' fully finished with 'Nakash' marks and that they are generally used by rural ladies of Rajasthan, the customs officials insist that they constitute primary gold. The four panchas who were called by the officials at the time of seizure and who witnessed the proceedings and examined the fineness of the articles were of the opinion that 'they were fully finished ornaments and that they are old ornaments'. The initial suspicion was that these articles were made of smuggled gold. The fineness of the gold was tested by the Mint Master who opined that on assay they were found to be 987.4 fineness. Simultaneously show cause notices were issued, one for the contravention of the provisions of the Customs Act and the other for the contravention of the Gold Control Rules. The proceedings under the Customs Act were dropped after enquiry upon a finding that there was no evidence that the gold was smuggled or that the articles under seizure were manufactured from smuggled gold. The proceedings initiated for the alleged contravention of Rules 126-H (2) (b) of the Defence of India (4th Amendment) Rules, 1966 [which will for the sake of brevity hereinafter be referred to as Gold (Control) Rules] were pursued on the basis of the opinion recorded with regard to the articles by the panchas as well as the Collector of Customs, the Gold Control Administrator and the revisional authority. It would appear that the 47 items and 'in a crude form with ends not joined and with sharp edges'. All these are unfinished form and not polished. They have been given a design to look like ornaments or given an impression that they are ornarnents, The. edges of the unjoined ends are also uneven. They do not appear to be old ornaments as claimed by the party but actually they appear to be newly made to look like old ornaments. In coming to that conclusion, the Collector of Customs took into account the fact that the mahazar witnesses and unanimously opined that they are finished and old ornaments. He also considered the petitioner's contention that similar ornaments are accepted by the Reserve Bank of India and that they have been paid the manufacturing charges also while; receiving as goods. The Collector of Customs observed that there is nothing on record to show that the articles or ornaments delivered by the parties to the Reserve Bank of India are identical to the articles now seized and which form the subject matter of that enquiry. With regard to the opinion of the panchas, he observed that as is clear from the certificate given by the Mint 'gold ornaments' of such fineness are not manufactured by the bullion manufacturers in India on commercial scale. Finally on a personal examination of all these items he opined that these 47 items cannot be considered as ornaments and that they are nothing but primary gold bent into crude round shape with-ou joints to give the general appearance of ornaments and transported from Botmbay to Hyderabad under the guise of ornaments to escape the clutches of law. Upon that finding, he directed their confiscation and imposed penalty. This is a finding of fact by a parson who, in the normal course of his official tuties, is required to examins primary gold and ornaments and arrive at a con-dlusion objectively with reference to the accepted norms for determining whe-cher a particular article is primary gold or ornament. The Supreme Court in Badri Prasad v. Collector Central Excise : (1) : AIR1971SC1170 while discussing what is an article and what is an ornament as envisaged by the Gold Control Act observed, rejecting the contention that the Act does not make a clear distinction between an article and an ornament that:

'The Explanation to Section 2(8) shows that nothing made of gold which resembles an ornament will be deemed to be an ornament unless the thing (having regard to its purity, size, weight, description or workmanships is such as is commonly used as ornament in any state. Clearly it is a question of proof as to whether the thing passes as an article or as ornament in a particular state and the difference is the treatment of these two substances in certain provisions of the Act does not fall to be considered.'

9. It is these tests that have been applied by the Collector in coming to the conclusion that the 47 articles seized were primary gold and not ornaments. The mere fact that similar articles have been released in other cases is no ground for holding that the articles now in question are also ornaments and not primary gold. For one thing it is not a single factor like purity, size, rate, description or workmanship but the cumulative effect of all these factors objectively considered by the independent authority that result is arriving at a finding as to whether a particular article is a primary gold or an ornament. This finding of the Collector was closely examined by the revisional authority. Before the revisional authority also it was contended that the panchas of the seizure had opined that they were ornaments, that similar ornaments were released by the Department in other cases and that the fineness of the gold used for these articles was not relevant for holding that they are primary gold. The revisional authority also examined all these circumstances and found the articles to be soft, highly malleable and drawn in the firm of rods having cut and sharp ends and some how given a circular shape to resemble ornaments. Some of the items have some sort of designs at the ends but these items are also in the form of crudely drawn rods, just given a circular shape. The revisional authority also, on a consideration of the material on record and its own examination of the articles came to the conclusion that what was seized add Ordered to be. confiscated was primary gold and not ornaments much less old ornaments. It also dealt with the contention that even crude jewellery is jewellery and held that although there is no restriction on the purity of the gold content of an ornament that was a factor which did give an indication as to whether it was intended to be used as ornament or merely to be held as primary gold.

10. In the other writ petition 733 of 1978 also the finding of the Collector, Central Excise was reached after personally examining the items seized. He found that none of the items were in a finished form and that they cannot be readily worn for personal adornment. He accordingly confiscated the same. These items were of 99 touch fineness. The Gold Control Administrator who disposed of the appeal also found that the weight of these items was abnormal, that they were of crude finish and were unfit for personal adornment and that they were not ornaments at all much less old ornaments. Even the entry made by the petitioner in the statutory Register was not under any specified items of rings or bangles. They were entered under a combined entry relating to rings and bangles. He confirmed the order of the Collector.

11. The Government of India, which had revisional power, also confirmed the findings of the two subordinate authorities and held that what was seized was primary gold and not ornaments and accordingly rejected it. The findings arrived at by the two appellate and revisional authorities that what was seized was primary gold and not ornaments, is a finding of fact. That finding is arrived at after applying the tests as to purity, size, weight description and workmanship. In arriving at that finding all the contentions raised by the petitioner were taken into account by the said authorities. They took note of the fact that the panchas have found that they were old ornaments. They also took note of the fact that the gold was of 99 touch fineness. They also considered the contention that the articles which were in unfinished form were released in other cases. They also duly took into account the contention that gold ornaments were accepted by the Reserve Bank and even manufacturing charges were paid. In the light of the entire record and the contention of the parties the Collector, Customs, the appellate authority as well as the revisional authority examined the articles in question and arrived at the finding that they are not ornaments but primary gold. Although it is contended that the purity of the gold is not a factor to be taken into account in deciding an ornament or primary gold, that factor is only relevant for determining whether it is smuggled gold or indigenous gold, I do not think such a contention can be upheld. When it is the common practice in this country for mixing gold with copper or other metals for the purpose of preparing ornaments, as the gold is very malleable and would be worn out and would not take sufficient polish if not reduced in fineness by mixture of other metals, the fact that the articles in question are of 99 touch fineness, if certainly a relevant factor even for determining whether that article is an ornament or not. Though that by itself would not be conclusive it is certainly a relevant factor even as observed by the Supreme Court in Badri Prasad v. Collector Central Excise (1) : AIR1971SC1170 . In the absence of any proof that these articles were identical to those now in question, the Gold Control Authorities have rightly rejected the contention that similar articles were accepted by the Reserve Bank and the manufacturing charges were paid and that similar articles were released earlier by the authorities. In my view the authorities are not precluded from determining whether a particular article is primary gold or an ornament merely because at the time of the seizure independent panchas brought by the departmental officers had witnessed the seizure and had opined that they were fully finished ornaments. It would be seen even from the panchanama that these articles were noted as 23-1/4 C.T fineness. While the panchas opined that they are fully finished ornaments and the petitioner claimed that they are old ornaments with ,'NAKASH' marks in them generally used by rural ladies of Rajasthan, they did not note in detail the other factors which throw a light on the question whether they are primary gold or finished ornaments. That, the Collector of Customs has noted. He found that the ends of these 47 items are not joined, that they have sharp edges, that they are in an. unfinished form and not polished and that they are in a crude form. Even the unjoined ends are uneven. They have been given a design to look like ornaments, but they are not ornaments. Rule 126-A (c) of the Gold Control Rules defines the 'ornaments' as follows :

' 'Ornaments' means any article in a finished form, meant for personal adornment or for the adornment of any idol, deity or any other object of religious worship, made of, or manufactured from gold, whether or not set with stones or gems, real or artificial, or with pearls, real, cultured or imitation or with all or any of them and includes parts, pendants or broken pieces of ornaments.'

'Primary gold' is defined under Rule 126-A (f) of the Gold Control Rules as follows :

' 'Primary gold' means gold in any unfinished form and includes all ingots, bars, blocks, slabs, billets, shots pelletes, rods, and wires.'

It would be seen that before any article made of gold could be passed off as ornament, it must be in a finished form and that article must be for personal adornment or for the adornment of an idol, deity or other object of religious worship. These factors after having been duly considered by all the authorities, the Authorities having jurisdiction to arrive at finding of fact rejected the petitioner's contention. They have found that these articles are in unfinished form and that they are not polished. Even if as contended by the petitioner some people prefer to wear unpolished ornaments, still such ornaments, if not in a finished form, cannot be deemed to be ornaments within the meaning of the Act. All the three authorities have unanimously held that the articles in question are not in a finished form. They have also notified that not only the edges are not joined but that they are uneven and that they have sharp edges. Whether any article is finished or not and whether it is an ornament worn or meant to be worn it obviously cannot have sharp edges. All these factors which are relevant have been taken into account by the authorities having jurisdiction in this matter which authorities have also examined the articles in question before recording a finding that they are primary gold and not ornaments and with which opinion the appellate authority and the revisional authority have concurred upon a sound reasoning. It is not for this Court under Article 226 of the Constitution of India to substitute its own finding in this behalf and issue a writ.

12. In fact in Zora Singh v. J.M. Tandon (2) : AIR1971SC1537 ; the Supreme Court laid down as follows :-

'The principle, that the decision of a Tribunal would be vitiated if the reasons relied on by it for its conclusions turn out to be extraneous or otherwise unsustainable, applies to cases in which the conclusion is arrived at on subjective satisfaction. For, in such cases it would be difficult for superior court to find out which of the reasons brought about such satisfaction. But in a case where the conclusion is based on objective facts and evidence, if it is found that there was legal evidence before the Tribunal, even if some of it was irrelevant, a Superior Court would not interfere if the finding can be sustained on the rest of the evidence, The reason is that in writ petition for certiorari the superior court does not sit in appeal, but exercises only supervisory jurisdiction and therefore does not enter into question of sufficiency of evidence.'

Even if some of the reasons given by the Collector of Customs the Appellate authority and the revisional authority are not wholly correct still in as much as the conclusion reached by them is based not on subjective satisfaction but with reference to the record and on an objective appreciation of the same it cannot be disturbed in the exercise of the extraordinary jurisdiction of this court under Article 226 of the Constitution of India. This conclusion is sufficient to dispose of writ petition 733 of 1978 in which no other point is urged.

13. The only other question that remains to be considered in W.P. No. 811/78 is whether the notice issued by the Collector of Customs on 24-12-1968 for the contravention of the Gold (Control) Rules after a period of six months from the date of seizure is illegal and without jurisdiction. The seizure of the articles in question in this case was effected on 13-12-66 at a time when the Gold (Control) Rules framed under the Defence of India Rules were in force. The Gold (Control) Rules were repealed by the Gold (Control) Ordinance 6/68 on 29-6-1968. The Gold (Control) Ordinance itself was repealed by the Gold (Control) Act 45 of 1968 on 1-9-68. Notice to show cause why the petitioners should not be held liable for the contravention of the provisions of the Gold (Control) Rules was issued for the first time on 24-12-1968. It was for the first time in this notice alleged that the petitioners have contravened Rule 126-H (2) (b) of the Defence of India (4th Amendment) Rules, 1966 and was called upon to show cause why penalty under Rule 126-L(16) of the said Rules should not be imposed and why the 66 items of gold should not be confiscated under Rule 126-M (1) of the said Rules. It is contended by Mr. D.V. Sastry, the learned counsel for the petitioners that having regard to Section 79 of the Gold Control Act, no order of adjudication of confiscation or penalty could be made unless a notice was given within a period of six months from the date of the seizure of the gold. In as much as the notice given to the petitioners is admittedly beyond the period of six months from 13-12-1966 the order of adjudication of confiscation and penalty is illegal and without jurisdiction. On the other hand it is contended by Mr. Subrahmanya Reddy, the learned standing counsel for the Central Government tha the contravention complained of is that of the Gold (Control) Rules and for ordering confiscation and imposing penalty for the said contravention no period of limitation is prescribed under the Gold (Control) Rules and notwithstanding the repeal of the said rules the liability incurred by the petitioners in contravening the said Rules subsists and the respondents are empowered to make the order of adjudication of confiscation and penalty.

14. In support of his contention Mr. Sastry learned counsel for the petitioner relies upon the judgment of the Supreme Court in Assistant Collector, Customs, v. Malhotra (3) : 1973ECR1(SC) . That was a case in which the question that arose for consideration of the Supreme Court was whether sufficient cause was shown for not giving the notice within the period and whether there was ground for extending the period to give notice under Sec 124-A of the Customs Act and if sufficient cause was not shown for the extension of the period whether any right is created, Section 124 of the Customs Act provides that no order confiscating any goods or imposing any penalty on any person shall be made unless the owner of the goods or such person is given a notice in writing informing him of the grounds on which it is proposed to confiscate the goods or to, impose a penalty, This section does not lay down any period within which the notice required by it has to be given. The Supreme Court, therefore, held that the period laid down in Section 11(d) of the Customs Act affects only the seizure of the goods and not the validity of the notice. In that case when the imported watches were seized on 19th March, 1963 and no notice was issued within a period of six months the petitioner claimed that he was entitled to return of the watches in view of Section 11(d). The Assistant Collector, Customs however, had applied for extension of the period by four months and the same was granted on 19th September, 1963 under the proviso to the said section. The extended period of four months expired on 19th January, 1964 and a further extension of two months was applied for on 3rd Jan, 1964. But the Collector passed his order granting further extension only on 20th February, 1964 i.e., about a month after the first extending period had expired. The Court in this context observed that the power conferred under the proviso is not to be exercised without an opportunity of being heard is given to the person from whom the goods are seized and one of the reasons for so holding was that:

'There was a civil right involved .... But in the present case also,

the right to restoration of the seized goods is a civil right which accrues on the expiry of the initial six months and which is defeated on an extension being granted, even though such extension is possible within a year from the date of the seizure. Since the Collector has on facts to decide on the existence of a sufficient cause, although his decision as to sufficiency of materials before him may be within his exclusive jurisdiction, it is nonetheless difficult to comprehend how he can come to his determination unless, as the Division Bench of the High Court has said, he has before him the pros and cons of the question. As ex parte determination by the one sided and perhaps one based on an incorrect statement of facts.'

15. The question to be considered in this writ petition is not whether a civil right has accrued to the petitioner by afflux of 6 months. If as contended by Mr. Sastry, the period of limitation of six months prescribed by Section 79 applies to the facts of this case, then perhaps as contended by him, since no notice was issued within that period the petitioners would have acquired a civil right to the return of the goods even though the seizure itself may be valid either under the Customs Act or under the Gold (Control) Rules. But before it could be held that such a civil right has accrued to the petitioner it must be first determined whether the period of limitation prescribed under Section 79 at all is attracted. Admittedly no period of limitation is prescribed for issuing a notice under the Gold (Control) Rules themselves. It cannot also be denied that if the petitioners were in possession of primary gold, as alleged by the respondents, in as much as they have no licence to deal in primary gold and have also not made the necessary entries they were guilty of contravention of Rule 126-N(1) and that gold is liable for confiscation under Rule 126-M(1) and also liable for penal action under Rule 126-L(16). I have already found that the conclusion arrived at by the Collector of Customs and confirmed on appeal and revision that the petitioners were in possession of primary gold and had contravened the said rule. That being so the only question would be whether on account of the repeal of the Gold (Control) Rules the respondents are precluded from proceeding against the petitioners unless they give notice within a period of six months from the date of the seizure, Obviously the respondents could not have given notice within a period of six rnonths under the Gold (Control) Ordinance or Gold (Control) Act for, the Ordinance came into force for the first time on 29-6-1968 and the Act on 1-9-1968. So, notice of six months as contemplated by Section 79 could not have been given in respect of the seizure of the gold from the possession of the petitioners. If the contention of Mr. D.V. Sastry, the learned counsel for the petitioners is accepted in respect of all seizures of gold for contravention of the Gold (Control) rules made more than six months prior to the commencement of the Gold (Control) Ordinance no action could be taken. According to him if no action was initiated under Gold (Control) Rules, then more than six months after the seizure, no action could be initiated either under the Gold (Control) Ordinance or the Gold (Control) Act which substituted the Ordinance. Section 117 of the Gold Control Ordinance which repealed the provisions of Part XII-A of the Defence of India Rules, 1962 which contained the Gold Control Rules is in the following words :

'(1) As from the commencement of this Ordinance, the provisions of Part XII-A of the Defence of India Rules, 1962 shall stand repealed and upon such repeal Section 6 of the General Clauses Act, 1897, shall apply as if the said Part were a Central Act.

(2) Notwithstanding the repeal made by Sub-section (1) but without prejudice to the application of Section 6 of the General Clauses Act, 1897 any notification, order, direction, appointment or declaration made or any notice, licence or certificate issued or permission, authorisation or exemption granted or any confiscation adjudged or penalty or fine imposed or any forfeiture ordered or any other thing done or any other action taken under or in pursuance of the provisions of Part XII-A of the Defence of India Rules, 1962, so far as it is not inconsistent with the provisions of this Ordinance be deemed to have been made, issued, granted, adjudged, imposed, ordered, done or taken under the corresponding provisions of this Ordinance.'

In view of this repeal Section 6 of the General Clauses Act is attracted which reads as follows :-

'6. Effect-of repeal. Where this Act, or any Central Act or Regulation made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made then, unlesss a different intention appears, the repeal shall not :-

(a) revive anything not in force or existing at the time at which the repeal takes effect; or

(b) affect the previous operation of any enactment so repealed or anything duly done or suffered thereunder ; or

(c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed ; or

(d) affect any penalty, forfeiture or punishment incurred in respect of any offence committed against any enactment so repealed ; or

(e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture, or punishment as aforesaid ;

and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such penalty, forfeiture or punishment may be imposed as if the repealing Act or Regulation had not been passed.'

As a result of the application of Section 6 of the General Clauses Act, notwithstanding the repeal of the Gold (Control) Rules the previous operation of the said Rules is not affected nor anything suffered thereunder is affected, nor is any liability incurred under the said Rules affected and any legal proceedings in respect thereof may be instituted or enforced and any such penalty, forfeiture or punishment may be imposed as if the repealing Act or Regulation had not been passed. Section 6 was expressly made applicable by Section 117 evidently because by its wording it may not apply to an Ordinance. Hence in view of this express saving clause contained in Section 117(1) in respect of the liability which the petitioners had incurred as a result of the contravention of the Gold (Control) Rules committed by them, a legal proceeding could be instituted and any penalty or forfeiture could be enforced as if the Gold (Control) Rules were still in force. The application of Section 6 of the General Clauses Act creates a fiction so as to continue the effect of the repealed Ordinance, to enable the liability incurred, to be enforced by a legal proceeding notwithstanding its express repeal under Section 117(1) of the Act. The Gold Control Act which repeals the Ordinance contains the follow-ng repeal and saving provision in Section 116 : -

'The Gold (Control) Act, 1965 (18 of 1965), and the Gold (Control) Ordinance 1968 (6 of 1968), are hereby repealed.

(2) Notwithstanding such repeal, anything done or any action taken, including any notification, order or appointment made, direction given, notice, licence or certificate issued, permission, authorisation or exemption granted, confiscation adjudged, penalty or fine imposed or forfeiture ordered whether under the Gold (Control) Ordinance, 1968 (6 of 1968) or part XII-A of the Defence of India Rules 1962, shall, in so far as it is not inconsistent with the provisions of this Act, be deemed to have been done, taken, made, given, issued, granted, adjudged, imposed or ordered, as the case may be, under the corresponding provision of this Act, as if this Act had commenced on the 29th day of June, 1968.

Thus the effect of repeal of the Gold (Control) Ordinance, 1968 is nullified by the saving clause. So much so, the liability incurred by a person by the contravention of any of the provision of the Gold (Control) Rules and which liability was continued and any legal proceeding which could be taken under the Gold (Control) Ordinance in respect of the same could be taken even after the enforcement of the Gold Control Act.

17. In Jayantilaly. Union of India (4) 0043/1971 : AIR1971SC1193 ; Supreme Court dealt expressly with Sub-section 2 of Section 116 of the Gold (Control) Act, in that case on November 18, 1964, a squad of Income-Tax officers commenced searching the premises of the appellant. The search continued upto November 21, 1964. On November, 20, 1964 the search party discovered huge amount of gold kept buried in one of the rooms of the appellant. The discovered gold was kept in the safe deposit vault of a Bank and later on December, 17, 1964, the same was seized by the Deputy Superintendent of Central Excise, Ahmeda-bad. Thereafter the Asstt. Collector, Central Excise, Baroda issued a notice to the appellant on June 5, 1965, requiring the appellant to show cause why the gold under seizure should not be confiscated under Rule 126-M of the Gold (Control) Rules and why penalty under Sections 126-1(16) of the said rules should not be imposed on him. In that context a contention was raised tha. the notice issued on 5th June, 1965 was without jurisdiction and the Court held that there are no provisions in the Gold Control Act, 1968 which are inconsistent with Rules 126 (1) (10) of the Gold (Control) Rules. That being so, action taken under that rule must be deemed to be continuing in view of Section 6 of the General Clauses Act, 1897. It is true that Gold (Control) Act, 1963 does not purport to incorporate into that Act the provisions of Section 6 of the General Clauses Act. But the provisions therein are not inconsistent with the provisions in Section 6 of the General Clauses Act. Hence the provisions of Section 6 of the General Clauses Act are attracted in view of the repeal of the Gold (Control) Ordinance, 1968. As the Gold (Control) Act does not disclose a different or contrary intention, liability incurred or proceedings initiated under the repealed law must be held to continue. In this context the Supreme Court laid down the principle that for ascertaining whether there is a contrary intention, one has to look to the provisions of the Gold (Control) Act, 1068. In order to see whether the rights and liabilities under the repealed law have been put an and to by the new enactment, the proper approach is not to acquire if the new enactment has by its new provisions kept alive the rights and liabilities under the repealed law but whether it has extinguished or taken away these rights and liabilities. The absence of a saving clause in a new enactment preserving the rights and liabilities under the repealed law is neither material nor decisive of the question. It therefore held that the proceedings under the Gold (Control) Act could properly be taken and continued notwithstanding the repeal of the Gold (Control) Rules. There is no provision under the Gold (Control) Act which expressly excludes the application of Section 6 of the General Clauses Act. There is also no provision under the Gold (Control) Act which expressly prohibits initiation of action for the liabilities incurred under the Gold (Control) Rules. Merely because the Gold (Control) Rules are repealed by the Gold (Control) Ordinance and the same is continued by the Gold (Control) Act it cannot be implied that the liability incurred under the Gold (Control) Rules is erased and the authorities are precluded from taking action under the said rules, on the expiry of the period of six months prescribed under Section 79 of the Gold (Control) Act. It must be remembered that Section 79 which provides for adjudication of confiscation or penalty in respect of gold, primarily deals with seizure and confiscation under the Gold (Control) Act and not under the Gold (Control) Rules. Any period of limitation prescribed therein must necessarily relate to the action taken under the said Act not any action proposed to be taken under the Gold (Control) Rules. For any action proposed to be taken under the Gold (Control) Rules, what has to be looked into is whether any period of limitation is prescribed under the said rules, and whether the power to take action under the said rules is taken away by any provision of the Ordinance under the Gold (Control) Act. Since there is no such provision, the action under the Gold (Control) Rules is not illegal or without jurisdiction merely because the Gold (Control) Ordinance and Act have subsequently been enacted.

18. In Baliah v. Rangachari (5) : [1969]72ITR787(SC) , the Supreme Court dealing with the question whether the right to institute a prosecution in respect of the proceedings which are pending at the commencement of the new Income-Tax Act (1961) and whether Section 297 (2) of the 1961 Act took away such a right, observed as follows :

'Whenever there is a repeal of an enactment the consequences laid down in Section 6 of the General Clauses Act will follow unless, as the section itself says, a different intention appears in the repealing statute. In the case of a simple repeal there is scarcely any room for expression of a contrary opinion. But when the repeal is followed by fresh legislation on the same subject the Court would undoubtedly have to look to the provisions of the new Act, but only for the purpose of determining whether they indicate a different intention. The question is not whether the new Act expressly keeps alive old rights and liabilities but whether it manifests an intention to destroy them. Section 6 of the General Clauses Act therefore will be applicable unless the new legislation manifests an intention incompatible with or contrary to the provisions of the section. Such incompatibility would have to be ascertained from a consideration of all the relevant provisions of the new statute and the mere absence of a saving clause is by itself not material.'

19. Mr. D.V. Sastry, the learned counsel for the petitioners however, relied upon a decision of the Jammu and Kashmir High Court in Romesh Chander v. Superintendent, Customs (6) : 1975 Crl. LJ. 739 : That Court held that 'there is nothing in Section 116 (2) of the Gold (Control) Act which can be said to have saved the liabilities incurred under the Defence of India Rules, 1962, which were repealed by the Gold (Control) Rules, 1962, which were repealed by the Gold (Control) Ordinance of 1968'. The Court held that no action could be taken under the Gold (Control) Act, for, that Act was not in force when the alleged contravention was committed by the petitioners and it further held that action under the Gold (Control) Rules could not be taken because Section 6 of the General Clauses Act could not be invoked as the entire provisions of that section have not been incorporated under Section 116 (2) of the Gold (Control) Act, 1968. To import Section 6 of the General Clauses Act would be tantamount to importing something in the Gold (Control) Act, which is inconsistent with Section 116 (2) thereof. In this judgment reference was made to the judgment of the supreme Court in Jayantilal v. Union of India (4) 0043/1971 : AIR1971SC1193 ; and was sought to be distinguished on the ground that it related to a case in which the notice was issued on June 5, 1965 while the Gold (Control) Rules were in force and in that context it was observed that Section 116 (2) of the Gold (Control) Act merely saved actions taken or made and not the liabilities incurred before passing of the Act. I must express my respectful disagreement with the decision, inasmuch as the said decision ignored the principle laid down by the Supreme Court viz., that unless Section 6 of the General Clauses Act is excluded it must be deemed to apply in cases of all repeals of enactment and further what has to be looked into is 'In order to see whether the rights and liabilities under the repealed law have been put an end to by the new enactment, the proper approach is not to enquire if the new enactment has by its new provisions kept alive the rights and liabilities under the repealed law but whether it has taken away those rights and liabilities. The absence of a saving clause in a new enactment preserving the rights and liabilities under the repealed law is neither material nor decisive of the question.' Thus the principle laid down by the Supreme Court in Jayantilal v. Union of India, 0043/1971 : AIR1971SC1193 has been missed. Reliance was placed by Mr. D.V. Sastry, learned Counsel for the petitioner upon the decision of the Calcutta High Court reported in B. Karmakar v. Union of India (7) LXXXI Calcutta Weekly Notes 159. That was a case in which on 6th May, 1968, when the Defence of India Rules, 1962, containing part XII-A (Gold Control Rules) were in operation, a certain quantity of Gold and gold ornaments were seized from the shop of the petitioner and a proceeding under Rule 126-L of the said Rules was initiated against him on 13th May, 1968. A notice was issued on the petitioner on 13th December, 1968, to show cause why the gold and the gold ornaments seized should not be confiscated under Section 71 read with Section 116 of the Gold Control Act, 1968. The Court held that 'in view of Section 116 (2) of the Gold (Control) Act, 1968, read with Section 6 of the General Clauses Act, 1897, the action taken under the Defence of India Rules, 1962, must be deemed to be continuing as none of the provisions of the Gold (Control) Act, 1968, are inconsistent with any of the provisions of the said Rules and the Collector had jurisdiction to issue the impugned notice.' It however held that 'the order of confiscation not having been within six months of the seizure of the gold and gold ornaments or any extended time was bad and must be set aside.' It would be seen that the question whether proceedings under the Gold (Control) Rules themselves could have been taken and confiscation ordered and penalty imposed was not considered and the action taken under the Gold (Control) Act alone was held to be bad. The Court also held that the Rule absolute issued therein does not prevent the authorities from taking any action, if under the provisions of any other law these books are required. For these reasons I am unable to agree with the contention of the learned counsel for the petitioners that the liability, if any, incurred by the petitioners for the contravention of the Gold (Control) Rules, no action could be taken after the repeal of the said Rules under the Gold (Control) Ordinance and the enforcement of the Gold (Control) Act by issuing a notice for the first time after the expiry of six months of the seizure. The liability incurred is not extinguished and is saved by Section 6 of the General Clauses Act and there being nothing inconsistent in the Gold (Control) Act, the order of the confiscation and imposition of penalty under Gold (Control) Rules is neither illegal nor vitiated. In this view of the matter no question of any civil right accruing to the petitioners by the afflux of period of six months from the date of seizure arises so as to entitle him to the return of the seized articles of gold.

20. In the result, these two writ petitions fail and are accordingly dismissed with costs. Advocate's fee Rs 500/- in each.


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