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Smt. Lilawati Chhawaghharia and Vs. Collector of Central Excise and - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Delhi
Decided On
Reported in(1983)LC1494DTri(Delhi)
AppellantSmt. Lilawati Chhawaghharia and
RespondentCollector of Central Excise and
Excerpt:
.....kumar chhowachharia (earlier minor but major at the time of seizure) seized 2,473.000 gms. of gold ornaments and 8 gold guinees weighing 66 gms. on the same day, from locker no. 381, standing in the name of master ajay kumar chhowachharia (earlier minor but major at the time of seizure) 2,483 gms. gold ornaments and 8 gold guinees weighing 64 gms, were seized. the officers also seized 463 gms. diamond studded jewellery, from locker no. 373 (118 gms.), locker no. 381 (166 gms.) and locker no. 383 [standing on the name of vijai kumar (179 gms)], respectively. the gold ornaments from the two lockers i.e. 373 & 381 worked out to 4956 gms. and 130 gms. gold guinees, which would thus total 5,086 gms. (there is discrepancy of 2 gms. in the weight of gold ornaments as set out in the.....
Judgment:
1. Shrimati Lilawati Chhawachharia (hereinafter called Smt. Lilawati) (appellant in appeal No. 18/78) and Shri Shankar Prasad Chhawachharia (hereinafter called Shri Shankar Prasad) (appellant in appeal No.19/78) filed appeals before the Gold Control Administrator, Ministry of Finance, Department of Revenue against the Order-in-Original No. 18/77 (Gold) & 19/77 (Gold) dated 17-12-77 passed by Shri P. Roy, Collector of Central Excise & Customs, Jaipur and these appeals stand transferred to this Tribunal under Section 82(K)(2) of the Gold (Control) Act, 1968 (hereinafter called Act) to be disposed of as if these were appeals presented before it. One common order is passed in the two appeals.

2. The appellants, Smt. Lilawati, is the daughter-in-law of appellant Shri Shankar Prasad. Shri Vijay Kumar is the husband of Mrs. Lilawati.

Shri Anupam Kumar and Shri Ajay Kumar are the sons of Shri Shankar Prasad. Mrs. Shakuntala Devi is the wife of Shri Shankar Prasad.

3. Gold Control Officers, acting on an information on 24-11-1975, sealed lockers Nos. 373, 380, 381 & 383 belonging to Chhawachharia family, in the United Commercial Bank, Purani Mandi, Ajmer. On 1-1-1976, from Locker No. 373, standing in the name of Master Anupam Kumar Chhowachharia (earlier minor but major at the time of seizure) seized 2,473.000 gms. of Gold ornaments and 8 gold guinees weighing 66 gms. On the same day, from Locker No. 381, standing in the name of Master Ajay Kumar Chhowachharia (earlier minor but major at the time of seizure) 2,483 gms. gold ornaments and 8 gold guinees weighing 64 gms, were seized. The officers also seized 463 gms. diamond studded jewellery, from Locker No. 373 (118 gms.), Locker No. 381 (166 gms.) and locker No. 383 [standing on the name of Vijai Kumar (179 gms)], respectively. The gold ornaments from the two lockers i.e. 373 & 381 worked out to 4956 gms. and 130 gms. gold guinees, which would thus total 5,086 gms. (there is discrepancy of 2 gms. in the weight of gold ornaments as set out in the order and 2 gms. in the weight of Gold guinees, which in the order is shown 128 gms.). These four lockers were hired some time in 1969 in the name of their sons by Shri Shankar Prasad and Smt. Shakuutala Devi. On 4-1-1976, from the residential premises of Shri Shankar Prasad, at Raniganj (West Bengal) authorities also seized, 70 Gold Sovereigns (weighing 555.500 gms.), silver slab weighing 935 gms. and two silver bars weighing 1037 gms., total silver thus weighing 1,972 gms. Further, on 19-1-77, then authorities also seized from Lockers No. 46, 62 & 77, standing in the name of Shri Shankar Prasad and family at State Bank of India, Asansol, 696.500 gms.

of gold ornaments, white metal ornaments weighing 150.700 gms. total being 847.200 gms.

4. Shri P. Roy, Collector of Central Excise, Jaipur, issued a Notice to the appellants and other concerned persons, Shri Anupam Kumar and Shri Ajay Kumar to show cause against confiscation. The Appellant Shri Shankar Prasad inter alia contended that the gold ornaments seized from the lockers belong to his family, family of his son and two major sons, Shri Anupam Kumar and Ajay Kumar. He also contended that he could control, own and possess gold ornaments and gold articles to the extent of 8 thousand gms. i.e. 4,000 gms. husband & wife and 2,000 gms. each two major sons. About the 70 gold sovereigns seized from the residential premises at Raniganj, he submitted that 30 gold sovereigns (weighing 240 gms.) belonged to him while 40 gold sovereigns (weighing 320 gms.) belonged to Smt. Lilawati, wife of Shri Vijai Kumar. He further stated that the aforesaid goods were disclosed in the Voluntary disclosure of Income and Wealth (Amendment) Ordinance, 1975. No explanation as to ownership of 16 sovereigns recovered from lockers operated at Ajmer appears to have been given. It also appears that no notice to show cause in respect of 696.500 gms. gold ornaments seized on 19-1-1977 from Asansol lockers had been given by the authorities.

There also appears some discrepancy about the weight of these ornaments (may be 14 carats white metal ornaments weighing 150.700 have been included). From sub-para 2 of para 32 of the Collectors' order weight would appear to be 847.200 gms.

5. The Collector of Central Excise, Jaipur, accepted appellant Shri Shankar Prasad's, explanation that he, his two sons Anupam Kumar and Ajay Kumar, could possess and own gold ornaments to the extent of 8,000 gms. and gold ornaments seized at Ajmer and Asansol were below the permissible limit. The Collector found that Section 16(1) of the Gold (Control) Act, 1968 had not been contravened in respect of these ornaments. He also found in the appellants favour with respect to 847.200 gms of gold ornaments (also described as 696.500 gms. at some places) seized at Asansol on 19-1-1977.

6. The Collector, therefore, ordered return of the gold ornaments to the appellant. With respect to 86 gold sovereigns weighing in all 683.500 gms., the Collector held that these were liable to be declared as they were clearly in excess of the permissible limit. He found violation of Section 16(1) of the Gold (Control) Act, 1968 proved. He ordered confiscation of 86 gold sovereigns under Section 71 of the Act with an option to redeem the same under Section 73 of the Act on payment of redemption fine of Rs. 12.000/- and levied a personal penalty of Rs. 500/- each on Smt. Lilawati and Shri Shankar Prasad under Section 74 of the Gold (Control) Act, 1968.

7. Aggrieved with the order of the Collector of Central Excise, Jaipur, the appellants filed appeals to the Gold Control Administrator which as already pointed out above, stand transferred to the Tribunal.

8. At the hearing of the appeals Shri G.K. Rana, Advocate represented the appellants. Shri Y.R. Gupta, Sr. Departmental Representative represented the Respondent Collector. They were heard.

9. Shri Rana submitted that the limitation of weight of articles owned, possessed, held or controlled envisaged in Clause (a) of Sub-section (5) of Section 16 was not applicable to limit of possession prescribed in Clause (b) of Sub-section (5) of Section 16 and Sub-clause (i) of Clause (b) of the sub-section and an individual, who is a member of a family, could possess both articles and ornaments upto 2,000 gms. and family could similarly possess articles and ornaments not exceeding 4,000 gms. Thus viewed, the gold ornaments and articles i.e. gold sovereigns did not exceed the permissible limit which was, in the case of appellant and his two sons Shri Anupam Kumar and Shri Ajay Kumar, upto 8000 gms.

10. Shri Rana, in support of his arguments, relied on : J.A. Abdul Hamid v. The Collector of Central Excise, Madras, 1973 M.L.J. (1) 311 and (2) Jay Krishna Saha and Anr. v. D.N. Lal and Ors., A.I.R. 1977 Cal. 468. He also submitted that these precedents had been cited before the Collector of Central Excise, Jaipur, but the learned Collector, without assigning any reason, ignored these precedents and orally stated that these rulings were not applicable in Rajasthan.

11. On behalf of the Department, Sh. Y.R. Gupta requested for some time to verify the figures. The Counsel for the appellants had come from Jaipur and it was felt that Shri Y.R. Gupta had sufficient time to go through the papers and figures and check the same and for this reason adjournment should not be granted. Adjournment was, therefore refused, though Shri Gupta was allowed time to go through the paper and then reply. Shri Gupta thereafter, after going through the papers admitted that 86 gold sovereigns in question were articles of gold and not of primary gold. He also admitted that a person can own, possess, hold or control these articles within the limit prescribed by Clause (a) of Sub-section (5) of Section 16 of the Act without any declaration being filed. His contention further was that even when a person possessed both articles and ornaments, he could not possess gold articles in excess of the limits prescribed by Clause (a) of Sub-section (5) of Section 16 of the Act. He submitted that the limitation on weight of articles owned, possessed, held or controlled by a person, specified in Sub-clause (a) was the limit which would also govern possession of both ornaments and articles covered by Clause (b). In possessing articles and ornaments, a person could not contravene the limits prescribed by Sub-clause (a). According to Shri Gupta, the appellants possessed gold articles above the prescribed limit and as such, order of confiscation for gold sovereigns, redemption fine and the personal penalty was, therefore, justified and called for no interference.

12. Gold ornaments seized from the appellants have already been held to be within the permissible limit and released to the appellants. The issue before the Tribunal now is regarding confiscation of 86 sovereigns, redemption fine of Rs. 12,000/- and Personal Penalty of Rs. 500/- against each of the appellants.

13. Under Sub-section (1) of Section 16 of the Gold (Control) Act, 1968 'every person who owns, or is in possession, custody or control of, any article or ornaments is required to make, a declaration in prescribed form as to the quantity, description and other prescribed particulars of any article, or ornament or both, owned, possessed, held or controlled by him' Sub-section (3) makes a similar provision in respect of article or ornaments subsequently acquired if by such acquisition permissible limits are exceeded.

"that no declaration referred to Sub-section (1) or Sub-section (3), shall be required to be made- if the articles or ornaments, as the case may be, are within the specified limits." Sub-section (6) defines a family, these two sub-sections are material for the present appeal and for ease of reference are extracted below : 16. (5) No declaration referred to in Sub-section (1) or Sub-section (3), shall be required to be made- (a) in relation to articles, unless the total weight of articles owned, possessed, held or controlled by - (i) a minor, who is not a member of a family, exceeds twenty grammes ; (ii) an individual (other than a minor), who is not a member of a family exceeds fifty grammes, (iv) any person referred to in Clauses (b) to (f) and (h) to (m) of Sub-section (2), exceeds fifty grammes ; (b) in relation to any ornaments, or both articles and ornaments, where both articles and ornaments are owned, possessed, held or controlled, unless the total weight of such ornaments or both articles and ornaments, as the case may be, owned, possessed, held or controlled by - (i) an individual who is not a member of a family exceeds two thousand grammes, (c) in relation to any ornaments, or both articles and ornaments, owned, possessed, held or controlled by any person referred to in Clauses (b) to (f) and (h) to (m) of Sub-section (2), unless the total weight of such ornaments, or both articles and ornaments, exceeds two thousand grammes.

16. (6) For the purpose of this Section 'family' shall be deemed to consist of- 14. Undoubtedly and admitttedly, Shri Shankar Prasad and his wife Mrs.

Shakuntala Devi constitute a family. S/Shri Anupam Kumar and Ajay Kumar, who were major at the time of seizure and not minor could not be within the definition members of this family. They were individuals and could own or possess articles and ornaments in their own right. Smt.

Lila-wati and her husband Shri Vijay Kumar would constitute another family. It was not disputed that the Gold sovereigns were articles.

15. In the instant case both gold ornaments and articles were seized.

The provision applicable, therefore, would be Clause (b) of Sub-section (5). Shri Shankar Prasad and Mrs. Lilawati could own, possess and control both articles and ornaments not exceeding 4,000 gms. each S/Shri Anupam Kumar and Ajay Kumar could each similarly own, possess and control under Sub-section (5) (b) (i) gold ornaments and articles not exceeding 2,000 gms. We will at this stage not consider the case of Sh. Vijay Kumar and Smt. Lilawati. That would be considered at appropriate stage. The learned Collector found that S/Shri Shankar Prasad, Anupam Kumar and Ajay Kumar could own, possess, hold or control oranments not exceeding 8,000 gms. He, therefore, held that 5981.20 gms. of gold ornaments seized were were within the permissible limit.

16. The learned Collector in para 31 of the order said that 86 gold sovereigns weighing 683.500 gms. were required to be declared by Shri Shankar Prasad and Ors. as the same were clearly in excess of the permissible limit. He added that he found violation of Section 16(1) had been committed. He did not clearly discuss whether he considered the case relating to gold sovereigns independently only in the light of Section 16(5)(a) or considering ornaments and articles taken together applying section 16(5)(b).

17. From the orders of the learned Collector, it appears that his understanding was that in case of both articles and ornaments limit on weight of articles owned and possessed held or controlled fixed by Section 16(5)(a) could not be exceeded. This must be the reason why he found a declaration in respect of articles necessary and violation of Section 16(1) of the Act, when he had found that S/Shri Shankar Prasad, Anupam Kumar and Ajay Kumar could own, possess, hold or control ornaments not exceeding 8,000 gms. The findings of the learned Collector are against judicial precedent in Sahib Dayal and Asha Rani v. Union of India and Ors., 1983 ELT 75 (P & H) (not cited by the learned Counsel for the appellants). The ruling refers to the two cases relied on before us by the learned Counsel for the appellants. The decision of the Punjab & Haryana High Court is extracted below : "This very provision came up for consideration before a Division Bench of the Madras High Court in J.A. Abdul Hamid v. The Collector of Central Excise, Madras, 1973 M.L.J(l) 311 wherein it was held that when both articles and ornaments are owned, possessed, held or controlled by an individual or family then the provisions which will be attracted would be of Clause (b) of Section 16(5) of the Act and that there is no justification for the construction that the limit placed by Section 16(5)(a) should be imported into Clause (b). A similar view was taken by a single Bench of the Calcutta High Court in Jay Krishna Saha and Anr. v. D.N. Lal and Ors., AIR 1977 Cal 468 wherein it was ruled that there is no warrant for breaking up of this total holding of 4000 gms. of both articles and ornaments into any particular ratio or proporation in a case where Clause (b) of Section 16(5) of the Act is attracted. Respectfully agreeing with the ratio of these two decisions. I also hold that when the provisions of Section 16(5)(b) are attracted, the limit on the weight of the gold articles provided in Section 16(5)(a) would not be applicable." 18. In view of the foregoing rulings, there can be no doubt that when provision of Section I6(5)(,b) are attracted, the limit on the weight of gold articles provided under Section 16(5)(a) would not be attracted. In this case, as already pointed out above, the Collector found that S/Shri Shankar Prasad, Ajay Kumar and Anupam Kumar could own or possess upto 8000 gms of gold ornaments and released 5981.20 gms. If 683.500 gms. weight of articles is added to this quantity, the total is much less than 8,000 gms. which would be within the permissible limit.

Section 16(1) could not, therefore, have been contravened. Out of 86 sovereigns, 30 sovereigns were claimed by Mrs. Lila-wati and remaining 56 by S/Shri Shankar Prasad, Anupam Kumar and Ajay Kumar (40 f 8 + 8).

Undoubtedly, in view of the foregoing reasoning these 56 sovereigns weighing 443.500 gms. would also be within the permissible limit.

19. It has been stated that if Shri Shankar Prasad possessed more than 4,000 gms. of gold ornaments and articles which included ornaments and articles belonging to his two major sons he ought to have given declaration. The Collector found 8,000 gms. to be permissible limit with respect to these three persons. That finding of the Collector has now become final and there is no challenge to the same by the Department. Sitting in appeal we cannot disturb that finding. The accountability of the appellants with respect to possession of gold articles could not be judged by treating 4,000 gms only as the permissible limit.

20. It may be stated that the learned Collector did not discuss the case of Sh. Shanker Prasad, Anupam Kumar and Ajay Kumar or Smt.

Lilawati separately and record separate finding with respect of gold ornaments and articles possessed by them. In the instant case, Mrs.

Lilawati stated that she owned 30 sovereigns weighing 240 gms. It is not clear whether she possessed any gold ornaments also so as to attract Section 16(5)(b) of the Act. The Collector mainly found Shri Shankar Prasad liable and determined the limits of possession with reference to him. If these sovereigns are held belonging to Shri Shankar Prasad and his two major sons, as already pointed out above, they are within the permissible limit. If these 30 sovereigns, as claimed, are held to belong to Mrs. Lilawati, can she be held to have exceeded the limit prescribed by Section 16(5)(a) and whether in her case Section 16(5)(b) would not be attracted Again Sahib Dayal and Asha Rani's case is one in point. In that case only gold sovereigns were seized. The Punjab & Haryana Court held that there was absolutely no material on the record on the basis of which a finding could be recorded that the petitioners were not in possession of any gold ornaments alongwith the disputed sovereigns. Though only sovereigns were seized in that case, the Court held that provision of Section 16(5)(b) are attracted and the limit on weight of gold articles provided in Section 16(5)(a) would not be applicable. In view of this judgment even if we consider case of Smt. Lilawati and 30 sovereigns in isolation she cannot be said to have contravened Section 16(5)(a).

Benefit of Section 16(5)(b) of the Act, even considering her case singly in view of High Court judgment, would have to be given to her.

21. As a result appeals are allowed and the orders passed by the Collector of Central Excise, Jaipur set aside.


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