Verified vouchers and delayed account entry: confiscation of genuinely received gold ornaments was partly set aside, with fine revised.

Ornaments received under verified, genuine vouchers could not be confiscated merely because statutory accounts were entered late, and the omission to consider that material contention was a rectifiable mistake apparent from the record. On that basis, the Tribunal held that rectification jurisdiction could be used without amounting to a review on merits, and set aside confiscation of the 254 gms and 438.300 gms consignments. Confiscation of the remaining 33 gms was maintained, but the redemption fine was revised to Rs. 5,000. Liability for personal penalty for non-accountal was left unaffected.

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Issues: (i) whether the Tribunal could rectify an apparent mistake in its earlier order by reconsidering confiscation of gold ornaments received under verified vouchers; (ii) whether the confiscation of ornaments weighing 254 gms and 438.300 gms was sustainable despite genuine vouchers and delayed statutory entry; and (iii) whether the confiscation and redemption fine relating to 13 gms of ornaments and 20 gms of suhan should be modified.

Issue (i): whether the Tribunal could rectify an apparent mistake in its earlier order by reconsidering confiscation of gold ornaments received under verified vouchers

Analysis: The rectification application was maintainable where the earlier order had omitted to consider a material contention already raised, namely that ornaments covered by valid vouchers could not be confiscated merely because they were not immediately entered in the statutory records. Such omission amounted to a mistake apparent from the record and the requested correction did not amount to a review on merits.

Conclusion: The Tribunal could rectify the apparent mistake in exercise of its rectification jurisdiction.

Issue (ii): whether the confiscation of ornaments weighing 254 gms and 438.300 gms was sustainable despite genuine vouchers and delayed statutory entry

Analysis: The vouchers relating to the two consignments had been verified by the department and found genuine. The ornaments had been received under valid vouchers and were searched on the same day in the evening. In these circumstances, non-entry in the statutory accounts immediately on receipt did not justify confiscation, though liability for personal penalty for non-accountal remained unaffected. The confiscation of these quantities therefore could not stand.

Conclusion: The confiscation of 254 gms and 438.300 gms of gold ornaments was set aside in favour of the assessee.

Issue (iii): whether the confiscation and redemption fine relating to 13 gms of ornaments and 20 gms of suhan should be modified

Analysis: The order of confiscation for the balance quantity of 33 gms was maintained for the reasons already recorded, but the redemption amount required adjustment in the rectification order. The Tribunal fixed the fine in lieu of confiscation for this quantity at Rs. 5,000.

Conclusion: The confiscation of 33 gms was maintained, and the redemption fine was refixed at Rs. 5,000.

Final Conclusion: The rectification application succeeded in part: the two larger consignments were released from confiscation, while confiscation of the remaining 33 gms was sustained with a revised redemption fine.

Ratio Decidendi: Where ornaments are received under valid vouchers and the vouchers are verified as genuine, mere delayed entry in the statutory accounts does not justify confiscation, and omission to consider such a material contention constitutes a rectifiable mistake apparent from the record.

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