Judgment:
1. This appeal of Shri A. Krishnan arises from Order-in-Appeal dated 08.02.88 passed by Collector (Appeals) confirming penalty of Rs. 5,000/- imposed under Section 74 of the Gold (Control) Act and also upholding absolute confiscation of 166 gms of gold belonging to the appellant which was seized from the goldsmith Shri N. Gangadharan's premises in terms of the Order-in-Original passed by the Deputy Collector No. 48/87 dated 11.06.87.
2. Learned Advocate Shri Gopalkrishnan Poti appearing for the appellant submits that the Order-in-Appeal disposed of three appeals which arises from the Order-in-Original imposing penalties and confiscating gold seized from the premises of the goldsmith Shri Gangadharan and also imposing penalty on the goldsmith Shri N. Gangadharan, on the appellant and another person Shn T. Rajan. He submits that this appeal is restricted to the seizure of four pieces of gold in the form of wire weighing 166.00 gms which has been absolutely confiscated and penalty of Rs. 5,000/- on the appellant which has been confirmed in the Order-in-Original. The other two persons Shri N. Gangadharan and Shri T. Rajan have not appealed in respect of their cases and in respect of three pieces of gold seized from the premises of the goldsmith Shri N.Gangadharan.
3. For the purpose of this case, the facts are that the premises of the goldsmith Shri N. Gangadharan was searched and besides three pieces of gold weighing 36.350 gms which is not the subject matter of this appeal, there was a seizure of 166.00 gms of gold in the form of four pieces of gold wire. Shri Gangadharan in his statement disclosed that these four pieces were brought to him on 16.05.86 by one Shri Koran who used to come to his shop for making ornaments who told him that these were sent by one Shri A. Krishnan, the owner of Shyamala Jewellery, the appellant herein, who had told him to give them to Shri Gangadharan to make ornaments. Shri Gangadharan has made entries in his GS13 Book for converting these wires into bangles. Statement of Shri A. Krishnan was also recorded on 15.05.86 who admitted that the gold was sent by him through Rajan. He also submitted in his statement that he has not entered the gold ornaments received by him in his account and he has instructed likewise to Gangadharan to enter in somebody else's name.
The appellant had claimed the ownership and had stated that the gold was given to him by his brother-in-law Shri K. Ramachandran @ Chandran to convert the old ornaments into gold bangles. He had mutilated it and made into wires and had sent to Gangadharan to make it into bangles. He submits that as the gold belonged to his close relative he did not enter it in his register.
4. The counsel submits that there is no dispute about Shri Gangadharan having received the gold and entered in his register. There is also no doubt about the appellant having converted the jewellery into wires as the same is reflected in his initial statement. There is also no dispute about his having sent them to making bangles. Therefore, he submits that the conclusion by the Deputy Collector in his Order-in-Original that this item of seized gold would have been of illicit origin is only a conjuncture as the words in the Order-in-Original itself are in these lines "all these evidence on record and the facts and circumstances reflected by them strongly support the view that gold of illicit origin was sent by Shri A.Krishnan to Shri N. Gangadharan and for the reason did neither Shri A.Krishnan keep any record in his register nor could he disclose any genuine owner's name nor could give satisfactory explanation for sending the gold in the form of four pieces of wire".
5. Learned Counsel submits that the statement of Shri K. Ramachandran @ Chandran who is the owner of the jewelleries given to the appellant was also recorded and Shri Ramachandran had clearly admitted that the gold jewellery belonged to him and that he had given it to the appellant for conversion. Therefore, he submits that this finding of the Deputy Collector that the gold could be of illicit origin is not supported by any evidence and. therefore the version of the appellant supported by Gangadharan's statement and Ramachandran @ Chandran's statement should have been accepted. He submits that only a minor violation has been committed by the appellant in not recording in his register as it belonged to his close relative. He submits that there cannot be an absolute confiscation in the matter as there is no violation committed by Shri Gangadharan as he has entered the details in his GS13 register and the fact of its receipt has been reflected in the order. Therefore, he submits that the penalty and absolute confiscation of 166.00 gms. be set aside in the matter.
6. Learned Advocate further submits that Gold (Control) Act has since been abolished and a lenient view could be taken. He submits that now even under Customs Act smuggled gold for violation under Customs Act absolute confiscation has been set aside and 5 Kg. of gold has been directed to be released on payment of fine of Rs. 12,000/- as in the case of Keerti Kumar v. CC . He further relies on large number of judgments to show that the Tribunal in similar circumstances directed release of gold. He also further submits that the gold was only of 20 CT and did not have the purity of 22 or 24 CT and, therefore, cannot be presumed that it was of foreign origin and that finding has been accepted by the Deputy Collector in para 12 of the order. He also pointed out in that order of the Collector in holding in para 10 that it is of illicit origin. The finding given in para 12 that it is not of foreign origin holding: I however find that the evidence on record is not strong enough us to prove with reasonable force and justification that 166.00 gms of gold wire of 20 CT. purity was of foreign origin and smuggled. The benefit of doubt is extended to it and its liability to confiscation under Section 111(d) of Customs Act. 1962 is not held to be fully established.
Learned Advocate points out having held so. he orders for absolute confiscation under Section 71 of Gold (Control) Act 1968, read with Section 41(b) as well as Section 55 of the Act which is not sustainable, therefore, seeked for release of the gold.7. Learned DR Shri S. Kannan reiterated the findings in the order and supported the order.
8. On a careful consideration of the submissions, 1 notice that the Deputy Collector in the Order-in-Original has clearly given a finding in para 12 that the seized 166.00 gms of gold were of 20 CT. purity was not of foreign origin and not smuggled as there is no strong evidence and in that view has granted benefit of doubt and has not ordered for confiscation under Section 111(d) of the Customs Act. However, he has proceeded to order confiscation under the provisions of Gold (Control) Act. I notice that Shri Gangadharan, who is the goldsmith has entered in his registers about the receipt of this quantity of gold through Shri Koran from Shri A. Krishnan in his GS13 Book, the only violation is in respect of the appellant who is a gold dealer in not making entry in his register as he had received it from his brother-in-law viz., Shri K. Ramachandran @ Chandran. This is a minor violation and for such a violation absolute confiscation is not justified which calls for granting of option to redeem the same on payment of fine of Rs. 5,000/-. This view is supported by the judgment of Calcutta High Court in the case of Narayan Prasad Dutta v. CCE (Gold) Cell . wherein, the Calcutta High Court has held that the order of absolute confiscation under Gold (Control) Act is not justified and the power to release the confiscated gold on payment of fine is a power coupled with duty and should be exercised reasonably and not arbitrarily or capriciously, therefore, directed for release of gold on redemption fine. It is also seen that in the case of Vasant Anant Yeolekar, Pune v. CCE . the Tribunal ordered for release of absolutely confiscated gold weighing 116.300 gms on payment of fine of Rs. 5,815/-. Likewise in the case of Ramesh Chand and Anr. v. CC primary gold weighing 391.700 gms with purity 231/2 CTs was ordered to be released on payment of fine of Rs. 25,000/-.
9. In that view of the matter the impugned order in so far as ordering absolute confiscation of 4 pieces of gold in the form of wire totally weighing 166.00 gms under Section 71 of the Gold (Control) Act is modified and the same is ordered to be released on payment of fine of Rs. 5.000/-. As regards the penalty imposed on the appellant under Section 74 of the Gold (Control) Act. there is only bona fide lapse on the part of the appellant in not entering in the register as the gold jewellery had been given by his own brother-in-law for making bangles, the circumstantial evidence clearly established the same. The Deputy Collector has also not confiscated the gold under question holding it not of foreign origin and not smuggled. The gold is only of 20 CT purity, therefore, for this minor violation the penalty of Rs. 5,000/- is harsh and the same is reduced to Rs. 1,000/- (Rupees One Thousand).
10. With the above modification, this appeal so far as this appellant is disposed of in the above terms.