TaxTMI 
TaxTMI 
1997 (1) TMI 86
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....ntral Excise Collectorate, Delhi were called at about 1.00 p.m. and were associated with the exercise undertaken by the Income Tax Authorities. N.K. Zaveri, partner of the appellant firm who was present at the relevant point of time informed the authorities that the transactions reflected under Voucher No. 7489 to 7496 and 7507 to 7511 as well as Receipt (Purchase) Vouchers 1439, 1922 and 1923 had not been entered in the GS-11 and GS-12 accounts. The authorities took this fact into consideration and thereafter reduced the shortage which would have worked out to 5446.217 gms. to 5014.170 gms. The appellant contends that its partner had raised a protest during the search and had followed it up by a letter dated 6-11-1982. In the letter of protest, it was mentioned that the officers had taken down the weights on the tags to the ornaments without correlating them to entries in the books and the weights were recorded without a meticulous co- relation with the relevant entries. It is not necessary to indicate in detail the nature of the protest. But suffice it to say that the weight, as mentioned, was not accurate. On 21-1-1983., the Assistant Collector of Customs and Gold, Central Excis....
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....ts in the amended forms GS-11 and GS-12. An attempt was made by the learned Additional Solicitor General to contend that if the account was not maintained at all in GS-11 and GS-12 forms, the dealer could be excused but not in cases where the account is maintained in those two forms and is found to be reflecting shortage of gold . We find it difficult to accept this contention for the simple reason that if the two forms do not reflect the true and correct account of the gold owned or possessed or held or controlled by the dealer, the mere fact that the dealer in obedience to law maintains the accounts in those forms, can not put him in a disadvantageous position when compared to a situation where he totally omits to maintain the accounts in those two forms. It may also be mentioned that the appellants, in reply to the show cause notice, challenged the correctness of the shortfall worked out from the entries in GS-11 and GS-12 in the show cause notice and contended that the account in Annexure B to the show cause notice did not represent proper weighment at all and that it would be a travesty to rely on such a document. Proceeding further, referring to the search list prepared, it w....
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....o a conclusion that there has or has not been any contravention." 4. After the matter went back to the Tribunal, the Tribunal by the impugned judgment concluded as under : That according to their own admission, certain vouchers"(i) were not entered in the appellant's account and the transactions covered by these purchase and Receipt vouchers were not entered in the accounts maintained under Section 55 of the Gold (Control) Act, 1968 and, therefore, the appellant clearly committed breach of Section 55 of the Act. This breach arises without reference to the defective Form GS-11 and GS-12. (ii) That there was a shortage and consequently a contravention of Section 36 and 55 of the Gold (Control) Act." 5.Dealing with the question regarding the contravention of Sections 36 and 55 of the Act, the Tribunal come to the conclusion that even without reference to the defective forms GS-11 and GS-12, there was sufficient independent material to hold that there was a shortage and consequently contravention of Sections 36 and 55 of the Act. The Tribunal, however, reduced the penalty from Rupees Five Lakhs to Rupees Two Lakhs. 6.After the aforesaid impugned order was passed, the app....
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.... accounts in the said two forms should be initiated for levy of penalty and the authority should consider removing the defects at an early date. To put it tersely, GS-11, and GS-12 were found to be forms containing accounts which did not properly reflect the gold in possession or control of the dealer at the material date. If, therefore, the decision is based on the entries in the said two forms, it could well be argued that penalty levied on the basis of defective forms cannot be sustained as the shortage reflected in the accounts therein would not correctly reflect the actual shortage. The Tribunal concluded that according to the admission of the appellants, certain vouchers were not entered in the accounts and the transactions covered by these purchase and receipt vouchers were not entered in the accounts which would go to show that there was a clear breach of Section 55 of the Act. The Tribunal then proceeds to add that this breach arises without reference to the defective forms GS-11 and GS-12. The Tribunal has clearly fallen into an error. The show cause notice itself shows that the authorities, when informed by N.K. Zaveri that GS-11 and Gs-12 were not complete in that entri....