1987 (8) TMI 252 - AT - Customs

Tribunal upholds penalties under Customs Act & Gold (Control) Act for contraband possession. Appellant exonerated on specific charges.

The tribunal confirmed penalties imposed under the Customs Act, 1962, and the Gold (Control) Act, 1968, against the appellant for possession and knowledge ... Penalty - Contraband gold Issues Involved:1. Possession and knowledge of contraband gold under the Customs Act, 1962.2. Contravention of Sections 8(1), 11(1), and 17(1) of the Gold (Control) Act, 1968.3. Quantum of penalty imposed under the Gold (Control) Act, 1968.4. Appeal by the Department for enhancement of the penalty.Detailed Analysis:1. Possession and Knowledge of Contraband Gold under the Customs Act, 1962:The primary issue was whether the appellant, Gurunath, had acquired possession or was concerned in keeping contraband gold, thereby entailing penal consequences under Section 112 of the Customs Act, 1962. The appellant's premises were found with five gold biscuits of foreign origin, weighing 500 grams and valued at Rs. 1,08,000/-. The appellant claimed ignorance of the contents of the paper packet containing the gold biscuits. However, his statement recorded on 1-2-1986 indicated a past association with a Muslim individual for whom he had previously melted gold, which is an offense under the Gold (Control) Act. The appellant did not disclose the identity of this individual, which the tribunal found incredible and unacceptable. The tribunal concluded that the appellant had knowledge of the contraband gold, thereby confirming the charge under Section 112(b) of the Customs Act, 1962, and upheld the penalty imposed by the adjudicating authority.2. Contravention of Sections 8(1), 11(1), and 17(1) of the Gold (Control) Act, 1968:The tribunal examined whether the appellant contravened Sections 8(1), 11(1), and 17(1) of the Gold (Control) Act, 1968. The possession of primary gold by the appellant, who was neither a dealer nor a certified goldsmith, was established, thus violating Section 8(1) of the Act. However, for Sections 11(1) and 17(1), the tribunal noted that these sections pertain to the making, manufacturing, or processing of gold. Since the gold biscuits were found in possession but not melted or processed, the tribunal held that the charges under Sections 11(1) and 17(1) were not substantiated. The tribunal exonerated the appellant of these charges.3. Quantum of Penalty Imposed under the Gold (Control) Act, 1968:The appellant argued for a reduction in the penalty, given that the charges under Sections 11(1) and 17(1) were not proven. However, the tribunal noted that the imposition of penalty is discretionary and based on the facts and circumstances, including the appellant's past conduct. The tribunal found no reason to reduce the penalty, confirming the quantum imposed by the adjudicating authority.4. Appeal by the Department for Enhancement of the Penalty:The Department appealed for an enhancement of the penalty under the Gold (Control) Act, 1968. The tribunal dismissed this appeal, noting that the only remaining charge against the appellant was under Section 8(1) of the Act. The tribunal emphasized that the primary gold's foreign origin was irrelevant to the charge under Section 8(1). The Department's failure to trace the actual depositor of the gold biscuits and the lack of an appeal for penalty enhancement under the Customs Act, 1962, further justified dismissing the Department's appeal.Conclusion:The tribunal confirmed the penalties imposed under the Customs Act, 1962, and the Gold (Control) Act, 1968, while exonerating the appellant of charges under Sections 11(1) and 17(1) of the Gold (Control) Act. The Department's appeal for penalty enhancement was dismissed. The appeals were disposed of accordingly.