1988 (10) TMI 210 - AT - Central Excise

Appeal Dismissed, Upholding Penalties for Unlicensed Gold Refinery Violations

The appeal was dismissed, affirming the lower authority's findings and penalties. The appellant was found guilty of operating an unlicensed gold refinery, ... Acquisition, possession and disposal of gold Issues Involved:1. Legitimacy of the appellant's business as a gold refiner.2. Ownership and nature of the seized gold.3. Validity of the appellant's confessional statement.4. Compliance with procedural requirements under the Gold (Control) Act.5. Appropriateness of the penalties imposed.Detailed Analysis:1. Legitimacy of the appellant's business as a gold refiner:The appellant was neither a certified Goldsmith nor a licensed Refiner, as admitted. The appellant claimed to be engaged in refining silver, not gold. However, the evidence, including the presence of refining equipment and the appellant's own admission, indicated that the appellant was operating a gold refinery without a license, contravening Sections 8(1), 11, and 17 of the Gold (Control) Act. The definition of 'refinery' under Section 2(t) includes places where gold is melted or refined, which applied to the appellant's premises.2. Ownership and nature of the seized gold:The seized gold, weighing 491.500 grams, was claimed by the appellant to belong to two certified Goldsmiths, Harish Chandra and Madan Lal. However, the court found no corroborative evidence from the Goldsmiths or their customers. The appellant failed to disclose the Goldsmiths' names during the initial inquiry, and no claims were lodged by the Goldsmiths or their customers. The court held that the gold belonged to the appellant, supported by the presumption under Section 99 of the Gold (Control) Act, which assumes ownership unless proven otherwise.3. Validity of the appellant's confessional statement:The appellant's confessional statement, recorded at the time of the raid, was challenged as being made under duress. However, the court found no evidence of retraction or any indication that the appellant was not in a fit state of mind. The statement was voluntarily made and corroborated by subsequent statements and evidence. The court upheld the validity of the confessional statement, which admitted the appellant's involvement in refining gold.4. Compliance with procedural requirements under the Gold (Control) Act:The appellant argued that the seized gold was an 'article' of gold, not 'primary gold,' and thus not subject to Section 8(1). The court noted that even if the gold were considered an 'article,' it would still fall under the restrictions of Section 8(3), which prohibits unlicensed possession of gold articles. The court found the appellant guilty of violating Section 8(1) for possessing primary gold and alternatively Section 8(3) for possessing gold articles without a license.5. Appropriateness of the penalties imposed:The court considered the penalties, including the absolute confiscation of the seized gold and the personal penalty of Rs. 1 lakh. Given the appellant's repeated offenses and the nature of the violations, the court found the penalties neither excessive nor harsh. The penalties were deemed appropriate to the severity of the infractions.Conclusion:The appeal was dismissed, affirming the lower authority's findings and penalties. The appellant was found guilty of operating an unlicensed gold refinery, possessing primary gold without authorization, and failing to prove the gold belonged to certified Goldsmiths. The penalties imposed were upheld as appropriate and justified.