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D.N. Arya of Trivoli Court Vs. Collector of Customs - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Calcutta
Decided On
Reported in(1984)(15)ELT271Tri(Kol.)kata
AppellantD.N. Arya of Trivoli Court
RespondentCollector of Customs
Excerpt:
.....of the tribunal, the said appeal stands transferred to the tribunal under section 82k of the gold control act, 1968.2. shri s.k. roy, bar-at-law the learned authorised representative has appeared on behalf of the appellant. he has stated that the order passed by the collector of customs is bad in the eyes of law as per provisions of section 73 of the gold control act. the collector has not given any option to redeem the gold after payment of fine. he has further submitted that three cut pieces of gold recovered from the appellant, were used as deities and smeared with sindhur. one side of the piece is polished. he has further pleaded that these gold pieces were brought by mrs. arya from her parents and it cannot be said that these pieces are broken pieces of ornaments. he has also.....
Judgment:
1. Shri D.N. Arya Trivoli Court 1A, Ballygunge Circular Road, Calcutta has filed a revision petition before the Secretary to the Government of India, New Delhi being aggrieved from Order Nos. 112 and 118 passed by the Gold Control Administrator, New Delhi vide order dated 4th December, 1976. After coming into existence of the Tribunal, the said appeal stands transferred to the Tribunal under Section 82K of the Gold Control Act, 1968.

2. Shri S.K. Roy, Bar-at-law the learned authorised representative has appeared on behalf of the appellant. He has stated that the order passed by the Collector of Customs is bad in the eyes of law as per provisions of Section 73 of the Gold Control Act. The Collector has not given any option to redeem the gold after payment of fine. He has further submitted that three cut pieces of gold recovered from the appellant, were used as deities and smeared with Sindhur. One side of the piece is polished. He has further pleaded that these gold pieces were brought by Mrs. Arya from her parents and it cannot be said that these pieces are broken pieces of ornaments. He has also submitted that the total value of gold as per Collector's order is Rs. 6,370 and weight of the 3 gold pieces comes to above 4 tolas and as per the valuation accepted by the revenue, the value of 4 tolas gold comes to Rs. 472. He has submitted that in view of the provisions of Section 73 of the Gold Control Act, 1968, the fine cannot exceed the value of the gold confiscated and as such, the maximum fine can be Rs. 472. He has also placed reliance on para No. 13 of the Collector of Customs, Calcutta's order. He has submitted that the Collector had accepted the factum that these were used as deities in view of the finding given in the para No. 13 of the order and factum of smearing of Sindhur has also been accepted by the Collector. He has also submitted that there is no evidence on record which clearly proves that it was primary gold. He has pleaded that these 3 pieces of yellow metal viz. "gold" are articles. The purity of gold is also low and the weight of these 3 pieces is less than 50 gms. and as such, the appellant was under no legal obligation to file any declaration under Section 16(5) of the Gold Control Act. Since the same was within the permissible limit, it cannot be confiscated. He has also relied on the two judgments in the case of Madras and Calcutta High Courts in the cases of J.A. Abdul Hamid v. Collector of Central Excise, Madras, 1973 M.L.J. (1) 311 and Jay Krishna Saha and Anr. v. D.N. Lal and Ors., Calcutta A.E.R. 1977, page 468. He has pleaded that since these three gold pieces were articles and as such no declaration was necessary and the same should be released. In the alternative, he has submitted that the penalty should be reduced from Rs. 3,000 to Rs. 472 in view of the provision of Section 73 that the penalty cannot exceed the value of the gold confiscated.

3. Shri B. Bhowmick, Junior Departmental Representative has appeared on behalf of the revenue and has submitted that revenue's case is covered by Section 74 of the Gold Control Act and as per Section 74, the penalty may be five times of the value of the gold or Rs. 1,000 whichever is more irrespective to its confiscation. He has also submitted that on page 9 of the order of the Collector, he has observed that these three cut pieces were primary gold and there is violation of the provision of Section 8(1) of the Gold Control Act. He has also stated that as per definition of Section 2(r) of the Gold Control Act, 'Primary Gold' means gold in any unfinished or semifinished form and includes ingots, bars, blocks, slabs, billets, shots, pellets, rods, sheets, foils and wires. He has also stated that at the time of Puja, ordinary silver or gold pieces are not worshipped. Generally coins are used to be worshipped. He has drawn attention to a book on coins by Parama Lal Gupta, 1979, Edition Plate VI Coin No. 56. It is a Laxmi coin. He has also shown one book named New Larousse Encyclopaedia of Mythology, page 564, which gives the image of Laxmi. Shri B. Bhowmick, Junior Departmental Representative has submitted that it is a primary gold in view of the definition of Section 2(r) of the Gold Control Act.

4. In reply, the learned authorised representative, Shri S.K. Roy has submitted that Section 74 deals with personal penalty and in the instant case, only section 73 can be invoked and the fine if levied cannot exceed the value of the gold confiscated. He has objected to the use of words of coin by learned J.D.R. and has stated that nowhere he claimed that these are coins. He reiterated that they are three gold pieces and are smeared with sindhur and this factum has been accepted by the revenue that when pieces are 'smeared with sindhur', these were used to worship Laxmi as per custom. These are not idols. He has prayed that since these are used for puja and is an article, appellant's appeal should be accepted. In the alternative, penalty should be reduced to Rs. 472.

5. After hearing both the sides, the point for consideration is whether the three yellow metal pieces recovered from the appellants are articles under Gold Control Act or not. The judgments quoted by the learned authorised representative do not help him as in those cases, gold coins were seized. But in these cases, three gold pieces were seized and they are not coins. The learned authorised representative's argument is that the order is bad as no option of fine in lieu of confiscation given to the appellant. In section 73, the word used is "may". The section 73 is reproduced as under :- 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." If the intention of the legislature had been that an option must be given to the appellant, the legislature would have used the word "shall". Revenue's contention that provisions of section 74 are applicable, are also not applicable in this case as section 74 deals with the personal penalty. The judgments quoted by the learned authorised representative in the cases of J.A. Abdul Hamid v. Collector of Central Excise, Madras, 1973 M.L.J.(l) 311 and Jay Krishna Saha and Anr. v. D.N. Lal and Ors., Calcutta, A.E.R. 1977, page 468, do not help him as in both the cases, gold coins were recovered and the Hon'ble High Court had held that the gold coins are articles. Both these judgments were followed by the Hon'ble Punjab & Haryana High Court in the cases of Sahab Dayal and Asha Rani v. Union of India reported in 1983 E.L.T. 75 (P & H) (not quoted by any party). In this case, Hon'ble Punjab & Haryana High Court had followed the Madras & Calcutta High Court judgments. Treating all these three gold pieces as articles means invoking the provisions of said Section 16(5) of the Gold Control Act.

Section 16(5) of the Gold Control Act is reproduced as under : "Section 16(5). No declaration referred to in Sub-section (1) or subsection (3) shall be required to be made : (a) in relation to article, 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 other 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." The word "article" has not been defined under the Gold Control Act.

As per Chambers 20th Dictionary, page 71, 1982 Edition, the "article" has been defined as under :- The shorter Oxford Dictionary on Historical Principles Vol. I (1.978 Edition) page 110 defines "articles" as "a commodity; a piece of goods or property etc." 6. After hearing both the sides and keeping in view the facts and circumstances of the case, I find that the judgments of Madras and Calcutta High Courts quoted by the appellant's learned counsel does not help him as in both the cases the Hon'ble High Courts had held 'sovereign coins' to be articles. In the instant case, the three gold pieces which are smeared with sindhur do not become an article.

Smearing with sindhur will not change the character of gold. The definition of primary gold as per provisions of section 2(r) of the Gold Control Act, 1968 is fully covered. I hold that the three pieces of gold are of primary gold and not articles and the appellant does not get the benefit of Section 16(5) of the Gold Control Act. Since it is primary gold, the provisions as to the declaration under the Gold Control Act are mandatory. I also hold that it is not mandatory for the lower authorities to give an option to pay fine in lieu of confiscation as the legislature has used the word 'may' in Section 73. Section 73 is reproduced as under : "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." So, it was the discretion of the officer passing the order to give the option or not. Of course, the discretion has to be exercised judicially. The Gold Control Administrator had exercised the discretion in favour of the appellant and had given an option to the appellant to pay a fine of Rs. 3000 in lieu of confiscation. However, the provisions as to the levy of fine in lieu of confiscation are mandatory viz., the fine cannot exceed the value of the thing. In the instant case, the Collector of Customs has mentioned that the value of the gold confiscated is Rs. 6370 approx. He has not mentioned whether it is the international price or domestic market price. As per the price mentioned in the order the value of the gold per tola works out to Rs. 118 approx. I, therefore, reduce the redemption fine to 100% of the value of the gold confiscated. Approximately 4 tolas of gold had been confiscated and its value is approx. Rs. 472. The Revenue is directed to refund the balance amount of fine if already paid by the appellant.

After getting delivery of the gold after payment of fine, the appellant is directed to get the gold converted into ornaments through a certified goldsmith or registered gold dealer within thirty days. This option should be exercised within one month of this order.


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