1989 (4) TMI 217 - AT - Central Excise

Tribunal partially allows appeals, exonerates appellants from certain charges under Gold Act, upholds confiscation, reduces penalties.

The appeals were partially allowed by the Tribunal. The appellants were exonerated from charges under Sections 27(7)(b) and 36 of the Gold (Control) Act, ... Transaction of business outside licensed premises allowed by High Court Issues Involved:1. Contravention under Section 27(7)(b) of the Gold (Control) Act, 1968.2. Contravention under Section 36 of the Gold (Control) Act, 1968.3. Contravention under Section 55(2) of the Gold (Control) Act, 1968.4. Possession of primary gold in contravention of Section 8(1) of the Gold (Control) Act, 1968.5. Quantum of fine and penalty imposed.Issue-wise Detailed Analysis:1. Contravention under Section 27(7)(b) of the Gold (Control) Act, 1968:The adjudicating authority imposed a fine and penalty on the appellants for allegedly violating Section 27(7)(b) by conducting business outside their licensed premises. However, the appellants argued that they were permitted by an Andhra Pradesh High Court order to transact business outside their licensed premises. The Tribunal referred to a similar case, Lalith Kumar and Others v. Collector of Customs, Cochin, where it was held that a party with a High Court order allowing business outside licensed premises could not be penalized for contravention under Section 27(7)(b). Consequently, the Tribunal exonerated the appellants from this charge.2. Contravention under Section 36 of the Gold (Control) Act, 1968:The authorities seized the G.S. 12 Register of appellant J.J. Jewellers and verified that the entries in the register matched the seized ornaments. The adjudicating authority did not find the G.S. 12 Register to be incorrect or unacceptable. Therefore, the Tribunal concluded that the charge of contravention under Section 36 of the Act failed.3. Contravention under Section 55(2) of the Gold (Control) Act, 1968:The subsidiary G.S. 12 Register carried by the travelling salesman did not contain entries for the ornaments weighing 1133.100 gms., and the salesman did not possess the voucher at the time of seizure. The Tribunal noted that the primary G.S. 12 Register at the shop had the necessary entries and that the breach was technical and venial. The Tribunal referred to a Trade Notice that suggested non-accountal could be condoned if bona fides were established, and concluded that the breach under Section 55(2) was technical in nature.4. Possession of primary gold in contravention of Section 8(1) of the Gold (Control) Act, 1968:The appellants did not contest the charge of possessing primary gold, and the purity was determined to be 24 carats. The Tribunal upheld the adjudicating authority's decision to confiscate the primary gold absolutely and found the appellants guilty of contravention under Section 8(1).5. Quantum of fine and penalty imposed:The original fine of Rs. 2,00,000/- was based on the non-accountal of 2243.900 gms. of gold ornaments. Since the Tribunal exonerated the appellants of charges under Section 27(7)(b) and Section 36, and considered the breach under Section 55(2) as technical, the fine was reduced to Rs. 35,000/-. The penalty on appellant J.J. Jewellers was reduced to Rs. 7,000/-, and the penalty on appellant Praveen Kumar Jain was reduced to Rs. 4,000/-.Conclusion:The appeals were partially allowed, leading to a reduction in the quantum of fine and penalties. The Tribunal exonerated the appellants of charges under Sections 27(7)(b) and 36, found the breach under Section 55(2) to be technical, and upheld the confiscation of primary gold under Section 8(1).