Finished gold coins treated as articles, foreign marked gold confiscated, and primary Rawa gold upheld with redemption fine.

Fully finished gold Mohurs and Habib coins bearing designs and inscriptions were treated as articles, not primary gold, under the Gold Control Act, so confiscation and penalty could not be sustained. Foreign marked gold attracted the customs presumption of unlawful import, and because the possessor did not discharge the burden of lawful possession, confiscation and penalty were upheld. Primary Rawa gold was treated as primary gold and remained liable to confiscation, though release was allowed on payment of redemption fine. The result was partial relief, limited to the Mohurs and Habib coins.

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Issues: (i) Whether gold Mohurs and Habib coins were primary gold or articles under the Gold Control Act, 1968, and consequently liable to confiscation and penalty; (ii) Whether the confiscation and penalty relating to the foreign marked gold under the Customs Act, 1962 were sustainable; (iii) Whether the primary Rawa gold could be retained in confiscation with an option of redemption fine.

Issue (i): Whether gold Mohurs and Habib coins were primary gold or articles under the Gold Control Act, 1968, and consequently liable to confiscation and penalty.

Analysis: The definition of article excludes primary gold, while primary gold covers unfinished or semi-finished forms such as ingots, bars, blocks, slabs, billets, shots, pellets, rods, sheets, foils and wires. The disputed Mohurs and Habib coins were found to be circular, fully finished, and bearing designs and inscriptions on both sides. They were not issued as sovereign coinage, nor were they shown to be slabs or unfinished forms of gold. On the statutory scheme, tariff distinction, and commercial understanding, they were not primary gold.

Conclusion: The Mohurs and Habib coins were articles and not primary gold. Their release was justified, and the confiscation against the assessee could not be sustained.

Issue (ii): Whether the confiscation and penalty relating to the foreign marked gold under the Customs Act, 1962 were sustainable.

Analysis: Foreign marked gold recovered from the premises attracted the presumption under the Customs law, and the burden to prove lawful import or absence of smuggling lay on the possessor. That burden was not discharged. The recovery circumstances supported knowledge and possession, and penal liability followed from such possession.

Conclusion: The confiscation and penalty in respect of the foreign marked gold were sustained against the assessee.

Issue (iii): Whether the primary Rawa gold could be retained in confiscation with an option of redemption fine.

Analysis: The Rawa gold was treated as primary gold, possession of which was prohibited under the Gold Control Act, 1968. At the same time, the assessee's claim that it represented melted ornaments was accepted to the extent that redemption could be granted on payment of fine.

Conclusion: Confiscation of the Rawa gold was upheld, but release was permitted on payment of redemption fine.

Final Conclusion: The order was sustained in respect of the foreign marked gold and the primary Rawa gold, while the release of the Mohurs and Habib coins was upheld, resulting in partial relief to the assessee.

Ratio Decidendi: A fully finished gold piece bearing designs or inscriptions, not issued as sovereign coinage and not falling within the specific forms constituting primary gold, is an article and not primary gold under the Gold Control Act; for foreign marked gold, the statutory burden on the possessor must be discharged to avoid confiscation.

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