1. These are transferred cases in terms of Section 82K of the Gold (Control) Act, 1968 hereinafter referred to as the Act.
2. As the facts leading to these appeals are common and arise out of a common order, they are being disposed of by a single order. The brief facts of the case are : 3. On 24-2-1977, based on information, the Preventive Officers of Central Excise, Calicut, located one P.V. Raikar (appellant in 64/82) at M/s. Shoba Jewellery and along with him they went to his place of temporary stay at room No. 45, Srihari Lodge, M.P. Road, Calicut and searched the same. From his suit-case gold ornaments, old and new, weighing in all 5317 gms. were found. According to the subsidiary G.S.12 produced by P.V. Raikar. P.V. Raikar was a licensee under the Act holding licence No. 46/63 at Karwar which at the relevant time was valid upto 1966-he had a stock of only 3169.250 gms. of new ornaments.
The excess quantity of 1775 gms. of old ornaments and 372.750 gms. of new ornaments were seized for action under the Act and Rules thereunder.
4. In a statement dated 24-2-1977, P.V. Raikar stated that the new gold ornaments had been brought by his brother V.V. Raikar from Karwar at 8 P.M. the previous day; he did not have any voucher for the same; these were to be delivered to M/s. Bhima & Bros., Jewellers, Kottayam, who had sent 400 gms. of standard gold bars by post to M/s. Raikar Jewellers at Karwar. The old ornaments, he claimed, had been given to him three days earlier by one Ramakrishna Rao, proprietor of Geetha Hotel, Ernakulam and brother of Shri P.N. Ramachandra Rao, proprietor of Woodlands Hotel, Ernakulam, appellant in No. 62/82 for making new ornaments. He did not enter them either in G.S. 12 or G.S. 11 register.
On 19-3-1977, 25 days after the seizure, M/s. P.V. Raikar Jewellery, by the hand of P.V. Raikar, addressed a letter to the Collector of Customs and Central Excise, Cochin, stating inter alia, that 1775 gms. of old ornaments were received by them from the following persons :1. M.J. Clietus (husband of appellant in No. 58/82, 375.000 gms.
Smt. M.J. Clietus Legal Representative of it was also claimed that simple acknowledgements on typed papers had been issued for the receipt of the old ornaments copies of which were with Raikar. The persons who were said to have given the old ornaments to Raikar were examined by officers of the Department and formal statements recorded from them on 5-4-1977. It was then elicited that information regarding the seizure was known to all the four persons, except P.N. Ramachandra Rao, though of a letter sent by Raikar in late February 1977 to V.T. Jacob (M.J. Lawrence, V.T. Jacob and M.J. Clietus are brothers-in-law and Francis is the brother of Jacob. Each of them was not aware of the details of ornaments entrusted to Raikar, or of the new ornaments to be made for them. Similar statement was recorded from Ramachandra Rao except for the difference that he claimed to have known about the seizure of gold ornaments about five days after the f incident. Each of the five persons also surrendered the typed receipt said to have been given by Raikar at the time of taking over of the old ornaments. In due course these claims were followed by formal representation dated 18-4-1977 from each of the claimants addressed to the Collector of Customs and Central Excise, Cochin.
5. After analysing the evidence on record, the Collector of Customs and Central Excise, Cochin held that the claim of the five individuals that some part of the old gold ornaments seized from Raikar belonged to each one of them could not be believed; the ornaments seized were held to be those of P.V. Raikar himself. Raikar had contravened Section 55 of the Act in that no entries were made for these ornaments in the relevant subsidiary register with him. He also disbelieved the story that 372.750 gms. of new ornaments were intended to be delivered to Bhima & Bros., Kottayam, as claimed and here too, no entry had been made in the subsidiary G.S. 12 register. Raikar has thus contravened Section 55 of the Act. He ordered confiscation of the said unaccounted old and new gold ornaments under Section 71 but permitted them to be redeemed on payment of a fine of Rs. 50,000/- in lieu of confiscation. He also imposed a penalty of Rs. 10.000/- on P.V. Raikar under Section 74 of the Act. P.V. Raikar and all the claimants appealed to the Gold Control Administrator against this order of the Collector. The Administrator also held that the claim that the old ornaments belonged to the five individuals was not tenable. It was also not possible to identify or co-relate all gold ornaments entered in the register with those seized.
He also did not accept the story regarding new ornaments having been made from out of 400 gms. of standard gold bars supplied by Bhima & Bros, to Raikar for manufacture of new ornaments and brought by V.V.Raikar, brother of P.V. Raikar from Karwar to Calicut on 23-2-1977 and left with P.V. Raikar for onward carriage to Kottayam. He upheld the order of confiscation and imposition of penalty passed by the Collector but reduced the fine in lieu of confiscation to Rs. 20,000/- and the penalty to Rs. 5,000/-.
6. Before us the representative of P.V. Raikar briefly went over the circumstances leading to the seizure and confiscation and claimed that the provisions of Section 55 have not been contravened in respect of either the new or the old ornaments. Each of the claimants has given the approximate quantity of old ornaments entrusted to Raikar in terms of sovereigns. He urged that the old ornaments had indeed been given by the five persons to P.V. Raikar for manufacture of new ornaments but later did not indicate the same at the time of making a statement on 24-2-1977 due to nervousness. He further urged that there was no reason to disbelieve the claim of the five individuals, which was backed by regular vouchers, or the statement that the new ornaments had been brought by V.V. Raikar to his brother P.V. Raikar at Calicut for onward carriage and delivery to Bhima Bros, at Kottayam, during the course of his visit to South. He submitted that entry in G.S. 12 register kept at Karwar had been made in respect of the new ornament ; hence non-entry in the subsidiary G.S. 12 with P.V. Raikar at Calicut would not result in a violation of Section 55, the new ornaments having been duly accounted for in the records of the gold dealer at Karwar, his normal place of business. In regard to the old ornaments, non-entry in the G.S. 12 register was accepted but in view of the existence of typed vouchers, accountal should be deemed to have been made. In any case, the offence should not be treated so seriously as to warrant the subsisting fine and penalty.
7. The authorised representative for the other appellants adopted the arguments of the representative for Raikar.
8. The SDR in reply stressed that in the statement recorded immediately after the seizure, P.V. Raikar claimed to have obtained all the old ornaments from Ramachandran Rao of Geetha Hotel, Ernakulam. When contacted next day itself, Ramachandran Rao denied having given any old ornaments whatsoever to Raikar. The first claim that the ornaments had been received from five other different individuals was made only in a letter written to the Collector 25 days after the event. Again, the individuals themselves made claims of their own only on 18-4-1977 though they accepted having known about the seizure of the ornaments in late February itself. Raikar's subsequent claim that he had issued typed vouchers on plain paper to each of the five claimants and kept a copy with him for each transaction runs contrary to his statement made at the time of seizure that he had no documents in respect of the old ornaments. The plea that he was in a confused state of mind could not be accepted as the statement is a fairly lengthy one giving details of transactions including earlier ones with M/s. Parambi Jewellery, Alleppey. Even if details might not be known, the fact that he was holding duplicate copies of typed vouchers relating to the transactions with each of the individuals is too obvious to have been forgotten or not brought to the notice of the officers at the time of seizure. In these circumstances he urged that the finding of the Collector that the old ornaments seized could not have belonged to any one of the five claimants should be accepted.
9. In regard to the new ornaments, the SDR pointed out that they consisted of 4 bangles, 30 studs, 8 necklaces and 1.0 rings. The standard gold bar was received at Karwar on the 19th and the entry regarding the issue of new ornaments in the GS 12 register at Karwar has been made on 21-2-1977. Considering the weight and variety of new ornaments, he submitted that they could not have been made in the course of just three days. Again, if the job was so urgent, that the ornaments were made in three days, it is incongruous that they were taken to P.V. Raikar at Calicut by his brother V.V. Raikar and left with P.V. Raikar, instead of taking them direct to Kottayam. He also urged that in spite of the entry in the register at Karwar, it is accepted that there was no entry in the subsidiary G.S. 12 register with P.V. Raikar at Calicut. Hence the offence is established.
10. We have considered the arguments of both sides. As rightly pointed out by the SDR the story of P.V. Raikar regarding the old ornaments does not hang together. For one thing, he claimed to have received 1775 gms. of old gold ornaments from P.N. Ramakrishna Rao of Geetha Lodge who promptly denied any such transaction. Eventually Rao's brother claimed a mere 76 gms. out of the total seized quantity. The other four claimants have stated that they gave old ornaments to P.V. Raikar but are unable to give details of the same nor were they willing or ready to identify their ornaments from out of the seized lot. They also professed innocence regarding the number, design etc. of the new ornaments to be made. The claim by the five individuals is also a belated one. Even the retraction of the first statement by P.V. Raikar is after 25 days. In these circumstances, we find that the Collector has correctly held that the old ornaments under seizure do not belong in part or whole to any one of the five claimants herein.
11. We also note that the new ornaments had not been entered in the subsidiary G.S. 12 register with Raikar at Calicut. The story of manufacture of variety of new ornaments numbering 52 and weighing 372.750 gms. in just three days on account of Bhima & Bros, of Kottayam is also not a believable one. We agree with the findings of the Collector that the new ornaments under seizure are not relatable to the standard gold bars sent by Bhima & Bros, to Raikar at Karwar.
12. Section 55 of the Act provides that "every licensed dealer,...shall keep, in such form and in such manner as may be prescribed, a true and complete account of the gold...held, controlled,...or otherwise acquired or accepted or otherwise received...by him in his capacity as such licensed dealer.... The plea that such accountal is referable only to the premises of the gold dealer at Karwar and not to the gold dealer who had brought other ornaments with him after entering the same in a subsidiary G.S. 12 register which he carried with him is not acceptable. The ornaments continued to be held by a licensed gold dealer wherever he may be and subsidiary G.S: 12 register is merely an extension of G.S. 12 register maintained in the licensed premises of the dealer. To accept the plea of the representative of Raikar that Section 55 will relate only to accounts maintained at Karwar would nullify the objectives sought to be achieved by Section 55 viz. proper accounting of gold in the possession of a licensed dealer from the time he receives it to the time he relinquishes control over the same by sale, transfer etc. Even if there be some doubt about the wording of Section 55 as to which account it relates, that doubt has to be resolved in a manner conducive to furthering the objectives of the Gold (Control) Act as set out above. Accordingly, we hold thai non-accountal of the old and new gold ornaments in a subsidiary register kept by P.V.Raikar at Calicut does amount to a violation of Section 55 of the Act and the ornaments are liable to confiscation under Section 71 of the Act. The ornaments, new and old, are not relatable to any other person.
They have therefore been rightly confiscated under Section 71 of the Act.
13. Obviously, P.V. Raikar is the person concerned in the offence of non-accountal and imposition of a penalty on him under Section 74 of the Act is maintainable on facts and in law.
14. Considering the value of the old and new gold ornaments involved and the circumstances of the case, we do not think that either the subsisting fine in lieu of confiscation or the penalty is high.