Gold confiscation requires proof of contravention; penalty fails where the alleged stock discrepancy is not established.

Gold ornaments could be confiscated only if the Department proved that they were dealt with in contravention of the Gold (Control) Act or the Rules. On the facts recorded, the seizure was not linked to gold shown to be liable for confiscation, and the alleged stock discrepancies were not satisfactorily established. The appellate authority's reasons for accepting the explanation regarding old ornaments were upheld, so the foundation for a personal penalty also failed. The confiscation and penalty were therefore set aside, and the order in favour of the gold dealer was affirmed.

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Issues: Whether the confiscation of gold ornaments and the personal penalty could be sustained when the seizure was not of gold shown to be in contravention of the Gold (Control) Act and the Department failed to prove the alleged discrepancies.

Analysis: The seized articles had to be linked to a contravention of the Gold (Control) Act or the Rules before they could be confiscated. On the facts found, the seizure did not relate to gold proved to be liable for confiscation, and the appellate authority had given cogent reasons for rejecting the Department's case on the alleged excess stock and on the explanation regarding old ornaments. Since the charges were not satisfactorily established, the basis for penalty also disappeared.

Conclusion: The confiscation and penalty could not be sustained, and the appellate order setting them aside was .

Final Conclusion: The appeal was rejected and the order in favour of the gold dealer was affirmed.

Ratio Decidendi: Only gold proved to have been dealt with in contravention of the governing control law can be seized and confiscated, and a personal penalty cannot stand unless the charge is satisfactorily proved.

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