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Hansraj Jeevandas Vs. Collector of Central Excise - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Tamil Nadu
Decided On
Reported in(1984)(16)ELT272Tri(Chennai)
AppellantHansraj Jeevandas
RespondentCollector of Central Excise
Excerpt:
.....of the collector of central excise, madras, the appellant filed a revision application, before the gold control administrator which stands transferred to the tribunal in terms of section 82 k of the act.4. the brief facts of the case are that on 2-4-80 on a search of the premises of the appellant hansraj jeevandas, primary gold weighing 482.900 gms. (consisting of gold bars 316.600 gms. and gold rods weighing 166.300 gms.) and gold coins weighing 1759.150 gms. were seized. the appellant explained that these items of gold belonged to his widowed sister goki behan who had been living with him for a long number of years; she passed away in the year 1971 at the age of 81; due to sentimental reasons he did not tamper with her articles which were kept in an almyrah in the room used by her. he.....
Judgment:
1. Appeal under Section 81 of the Gold (Control) Act, 1968, praying that in the circumstances stated therein, the Tribunal will be pleased to order cancellation of the fine of Rs. 10000 levied under Section 71 and penalty of Rs. 10,000 under Section 74 of the Act, pursuant to the Order C. No. XVII/8/59/80.GC. Adj., dated 14-11-80 of the Collector of Central Excise, Madras.

2. This appeal coming up for orders upon perusing the records and upon hearing the arguments of Shri T.K. Jayaraman, Advocate for the Appellate and upon hearing the arguments of Shri S.K. Chaudhury, Senior Departmental Representative for the respondent, the Tribunal makes the following order : 3. Aggrieved by the aforesaid order of the Collector of Central Excise, Madras, the appellant filed a revision application, before the Gold Control Administrator which stands transferred to the Tribunal in terms of Section 82 K of the Act.

4. The brief facts of the case are that on 2-4-80 on a search of the premises of the Appellant Hansraj Jeevandas, primary gold weighing 482.900 gms. (consisting of gold bars 316.600 gms. and gold rods weighing 166.300 gms.) and gold coins weighing 1759.150 gms. were seized. The appellant explained that these items of gold belonged to his widowed sister Goki Behan who had been living with him for a long number of years; she passed away in the year 1971 at the age of 81; due to sentimental reasons he did not tamper with her articles which were kept in an almyrah in the room used by her. He pleaded ignorance of their existence and sought to be excused for any offence under the Gold Control Rules. By his order referred to above, the Collector of Central Excise, Madras, confiscated the primary gold weighing 482.900 gms.

under Section 71 of the Act but fixed a fine in lieu of confiscation of Rs. 10,000, on a finding that there was a contravention of the provisions of Section 8(1) of the Act by the Appellant who had succeeded to the gold on the death of his sister. He also confiscated the gold coins weighing 1759.150 gms. on a finding that they formed part of the gold ornaments and articles held by the sister of the Appellant, Goki Bhen, whose total possession was 3,002.050 gms. at the time of her death; by her failure to give a declaration in regard to the gold and gold ornaments referred to, the goods have become liable for confiscation. As Goki Bhen herself was no longer alive, no action was taken against her; he, however, gave the appellant the option to redeem the gold coins on payment of fine of Rs. 10,000. Under Section 74 of the Act he also imposed a penalty of Rs. 10,000 on the appellant.

5. Before us, it is argued that in view of the peculiar circumstances under which the gold came to be in the possession of the appellant, no action should be taken against him in that he was not in conscious possession of the goods.

6. In so far as the primary gold is concerned, on the demise of Goki Bhen, the gold devolved on Hansraj Jeevandas the only surviving brother since 1971, almost nine years before the date of search. It is difficult to believe that for all these long years the almyrah belonging to Goki Bhen was not even looked into. In the circumstances of this case we hold that the primary gold was at the time of search in the control of Hansraj Jeevandas. Section 8 (1) prohibits the possession of any primary gold except as otherwise provided in the Act.

7. During the course of the hearing reference was made to Section 16 (5) of the Act, according to which no declaration, as required in Sub-section (1) or Sub-section (3) of Section 16 is required to be made. In respect of gold, declaration is required only in respect of quantity in excess of the quantity specified in Sub-section (5) of that section. Under Sub-section (5) (b) the limit for a family is 4000 gms.

It was sought to be argued that as the total gold under the control of Hansraj Jeevandas did not exceed 4000 gms., there is no violation of Section 8(1) of the Act. This argument is without substance. Section 16 deals with a situation in which a declaration has to be made in respect of any article or ornaments of gold. Making a declaration or the need not to make a declaration, does not by itself confer a right to hold primary gold in the teeth of the provisions of Section 8. No doubt Sub-section (3) of Section 16 refers to the quantity of "gold" in excess of the quantities specified in Sub-section (5) and "gold" has been defined in Section 2(j) to include "primary gold, article and ornament"; but the exception to the making of a declaration under Section 16 (1), as referred to in Sub-section (5) relates only to ornaments or articles or both and not gold per se. Hence the definition of goid, as inclusive of primary gold, will have no relevance in the context of making a declaration. That being the position, the provisions of Sub-section (3) of Section 16 would not be relevant in considering the possession of primary gold. As we have already indicated earlier, Section 8 prohibits one from possessing gold by persons except as otherwise provided in the Act. Those provisions refer to the possession of primary gold by certified goldsmiths and dealers in the course of business of manufacture of gold ornaments. The advocate for the appellant urged that in terms of Section 16 (3) of the Act read with Sections 16(5) and 16(11), possession of gold which will include primary gold not exceeding 4000 gms. (in the case of a family as in the present case itself) will not be an offence under Section 8(1) of the Act in view of the provisions of Section 16, sub-clauses (3), (5) and (11) of the Act. In support, he relied on a judgment in Criminal Appeal No. 273 of 1976 in the case of Assistant Collector of Central Excise, Pondicherry v. T.K. Ethirajalu Naidtt, D. Muthu, decided by His Lordship Hon'ble Mr. Suryamurthy of the Madras High Court in a judgment dated 13-10-1977, and the judgment of a Division Bench of the Gauhati High Court consisting of their Lordships the Chief Justice, Shri Goswami, and Justice Shri M.C. Pathak in the case of Ganpatrai, Dhanuka v. A.K. Bcmdyopadhyay (AIR 1973 Gauhati 8).

8. In the case dealt with by the Madras High Court the point before the Court was whether the provisions of Section 16(1) would be applicable in the case of primary gold keeping in view that the term "gold" has been defined in Section 2 (j) as including "primary gold, article and ornament". The accused in those proceedings was a licensed dealer. It may be noted that in terms of Section 32 of the Act possession of primary gold by a dealer is permitted in certain circumstances, a factor which is recognised in the opening words of Section 8 (1) itself which reads "Save as otherwise provided in this Act..." Section 32 is one such provision made otherwise. Section 32, along with Section 42 which relates to certified goldsmiths, are sections-which permit the possession of primary gold by gold dealers and certified goldsmiths under certain conditions. As the point directly in issue was whether the gold dealer could have had a period of one month from the date of acquisition of the primary gold for the purpose declaration, the Court found for the accused. The case is thus distinguishable from the one before us in that we are dealing with an individual member of a family.

9. In the judgment of the Gauhati High Court the contention of the Senior Government Advocate that Section 16 is confined to only articles of gold and gold ornaments was repelled, again keeping in view the definition of the term "gold" in Section 2 (j). Here too, the facts and circumstances of the case would seem to be different from the ones we have before us. Section 8(1) categorically provides that "no person shall own or have in his possession, custody or control...any primary gold, save as otherwise provided in this Act". As we have noticed earlier, Section 32 provides for the possession of primary gold by a licensed dealer subject to certain conditions. Section 42 of the Act provides similarly for the possession of primary gold by a certified goldsmith under specified conditions. But for the exceptions contained in Sections 32 and 42, there is no direct provision dealing with the possession of primary gold by any person. Section 16 deals with situations where a declaration has to be made in regard to the possession, among other things, of articles or ornaments. Sub-section (5) of Section 16 deals with declaration in respect of articles or ornaments of gold or both and not of primary gold. Sub-section (3) provides the action to be taken by any persons who did not own, possess or hold or control gold before the commencement of the Act (in excess of the quantity specified in Sub-section (5) to acquire after such commencement. The requirement is that he shall make a declaration within thirty days of such acquisition). Even if we accept for purposes of argument that the term 'gold' used in this Sub-section would include primary gold, it can at best mean that acquisition of primary gold need not be declared for a period of thirty days (or such further period, as the Administrator may allow). Sub-section (11) provides that a person shall not own or have in his possession, custody or control of any quantity of gold (which in the light of the definition of the term 'gold' in section 2 (j) may be taken to include primary gold) which is required to be included in the declaration unless it has been so included. This would mean that if a declaration has to be given in respect of gold (including primary gold) and such a declaration is not given, possession ipso facto becomes an offence. This Sub-section does not however authorise the possession of primary gold. If the possession of primary gold is an offence in terms of any other provisions of the Act, it would no doubt continue to constitute one despite the further provision in this Sub-section that what has to be declared, being not declared, becomes an offending article. We find that this differentiation between the provisions regarding declaration and possession of primary gold itself, has not been placed before the Gauhati High Court.

10. In the circumstances, we find that the possession of primary gold by Hansraj Jeevandas even after the expiry of thirty days from the date when he came into possession thereof, by succession on the death of his sister, a few years before the date of search, does constitute an offence under Section 8 (1) of the Act and the confiscation of primary gold in the hands of the appellant, Hansraj Jeevandas, for violation of Section 8 (1) of the Act, is maintainable in Jaw.

11. In so far as the gold coins are concerned, the charge is that Goki Bhen was required to declare it in terms of the Act ; she did not do so ; therefore, the coins became liable to confiscation. A notice to show cause has been issued to Hansraj Jeevandas; the articles were seized from his possession ; he having come in such possession by succession in terms of the proviso to Section 71 of the Act, the coins would not be liable to confiscation in the hands of Hansraj Jeevandas for the omission by Goki Bhen to declare these. So the confiscation of the gold coins is set aside.

12. In the unusual circumstances under which the appellant came to be in possession of the primary gold without declaration, we reduce the penalty imposed on him to Rs. 5,000 (Rupees five thousand only).


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