Judgment:
1. This appeal is directed against the order of the Collector of Central Excise, Calcutta, dated 15.6.1979 confiscating 2,235.500 grams of gold ornaments and soverigns valued at Rs. 62,928.00 under Section 71 of the Gold (Control) Act, 1968, the Act for short, permitting redemption of the same on payment of a fine of Rs. 90,000/- under Section 73 of the Act and imposing a penalty of Rs. 10 lakhs jointly on both the appellants under Section 74 of the Act.
2. The first appellant, Sri P.K. Das is the son and the appellant Sri N.C. Das is the father. Sri P.K. Das, the son is a pawn broker. On 13.7.1976 the Central Excise authorities searched the premises of M/s.
New Luxmi Jewellers, the pawn broking shop of the appellant, Sri P.K.Das, and found him in possession of primary gold, gold coins, new ornaments and old ornaments etc, as detailed in the impugned order totalling 2,235.500 grams. The authorities also found two daily sales account books evidencing transaction in gold ornaments to an extent of 4570.050 grams during the period 10.1.1976 to 11.7.1976, and transactions for 21,144 grams of gold ornaments for the period 1.1.1982 to 15.1.1983. Since the appellant Sri K.P. Das who is neither a licensee under the Act, nor a certified goldsmith could satisfactorily account for the gold coins and ornaments as well as the various entries in the sales account books, the authorities effected seizure of the same and other relevant documents as per law under a Mahazar. Sri P.K.Das gave a statement before the authorities on 13.7.1976 admitting the seizure of gold ornaments. Sri P.K. Das further stated that he and his father used to take orders for makinq gold ornaments and these orders were being taken in the name of M/s. New Luxmi Jewellers. He stated that he would be able to inform the names and addresses of the customers later on. Sri P.K. Das further stated that in their premises there is a factory for making gold ornaments for their shop and for polishing. He further stated that the goldsmiths were working for their factory and except Sri Gosto Behari Mondal, the others were not certified goldsmith and GS 13 Register which the authorities seized at the spot was entirely written by him. It is in these circumstances, after further investigation proceedings were instituted against the appellants which eventually culminated in the present impugned order now appealed against.
3. Sri Sanyal, learned advocate, appearing on behalf of the appellants, submitted that the inculpatory statement recorded from Sri P.K. Das is not voluntary and true and would not merit acceptance particularly when the same was retracted on 16.7.1976. It was further urged that the certified goldsmith Sri Mondal whose GS 13 Register was seized by the authorities at that place was a lessee under the appellant and the various ornaments, old and new had been properly entered in the GS 13 Register. The learned advocate further contended that as many as eight claimants have got themselves implicated as parties and the adjudicating authority has not addressed himself at all to the question about the claims of the various claimants, particularly with reference to the entries in the GS 13 statutory register of certified goldsmith Sri Mondal. Therefore, the learned counsel contended that in terms of the proviso to Section 71 the ornaments belonging to various third parties would not be liable for confiscation and the impugned order in this respect was assailed as not tenable in law. So far as the private sales account books are concerned, the learned counsel contended that the entries therein had not clearly established that the appellants were dealing in gold ornaments as a dealer and, as such, such conclusion is not warranted with reference to the entries therein. The learned counsel further urged that in any event the quantum of fine is disproportionately high and the impugned order fastening a penal liability of Rs. 10 lakhs jointly on the appellants is also not sustainable in law.
4. We have carefully considered the submissions made before us. The fact that on 13.7.1976 the authorities effected seizure of gold ornaments and soverigns along with certain account books from the premises in the occupation of the appellants is not disputed and is admitted. We would like to bear in mind at the outset that admittedly the appellants are neither a licensee under the Act, nor certified goldsmiths. The appellant Sri P.K. Das has given an inculpatory statement admitting the fact that he and his father had been dealing in gold business without a licence taking orders from various customers and manufacturing ornaments through various goldsmiths of whom Sri Mondal alone is a certified goldsmith. He further stated that GS 13 register was written by him. We have carefully gone through the statement recorded from Sri P.K. Das by the authorities and we are satisfied that the same is voluntary and true and would merit acceptance. The statement admittedly was retracted only on 16.7.1976, and no satisfactory explanation has been given for belated retraction.
The plea of the learned counsel before us was that the statement was recorded under threat and coercion. If really the statement had been brought into existence under threat and coercion, we are at a loss to understand as to why the appellants did not avail themselves of the opportunity to cross examine the officers in whose presence the statement was given. The learned counsel is not able to give us any explanation in this regard. The plea of the learned counsel that the statements are that of father and son and are, therefore, not admissible in terms of Section 70 of the Act, is also not tenable because the statement has been given by son, Sri P.K. Das and under the same the other appellant, who is the father who admittedly was present, has also subscribed to the correctness of the same by putting his signature. In the circumstances, the statement cannot be considered to be a joint statement as contended. No doubt the GS 13 register of certain goldsmith, Sri Mondal was recovered at the time of seizure, the authorities do not appear to have properly investigated the entries therein with reference to the ownership of the various names entered therein. Since the appellant Sri P.K. Das gave a statement that GS 13 register was written by him, the adjudicating authority would appear to have proceeded on the basis that it was merely a document manipulated and created in the name of the said goldsmith by Sri P.K. Das with a view to extricate himself from the clutches of law. The GS 13 register was not made available to us for our perusal. The statement of Sri P.K.Das and the surrounding circumstances would indicate that various people have entrusted ornaments for remaking to Sri P.K. Das who got them manufactured through goldsmith, Sri Mondal. The proviso to Section 71 of the Act is very clear that the gold ornaments belonging to third parties would not be liable for confiscation unless there was knowledge or connivance on their part with reference to the commission of any offence under the Act. In the present case, the details of the ornaments belonging to the third parties are not available. It does not appear to have been investigated at all in this regard. Nor the learned departmental representative is able to enlighten us on this question.
To a specific query, Sri Sanyal, learned advocate for the appellants, submitted that 331 grams would account for the third party's ornaments.
It was urged that 948.500 grams represented family ornaments of the appellants. For want of details and also GS 13 register, we proceed on the basis that some ornaments regarding which entries were made in the GS 13 register belonged to third parties and some ornaments belonged to the appellant's family. We keep this at the back of our mind only to assess the seriousness of the culpability of the appellant under the provisions of the Act in regard to the ornaments under seizure. The ornaments under seizure are admittedly of 22 carat purity.
5. So far as the gold coins are concerned the total quantity under seizure is 51.500 grams only and since there are two persons, namely, father and son, under the Act, each would be entitled to possess upto 50 grams without making any declaration under Section 16(5).
6. So far as the primary gold is concerned, the total quantity is 156.500 grams and purity of the primary gold is 22 carat and below.
Keeping all these factors in mind, while confirming the confiscation of the same under the Act, since substantial quantity of the ornaments have also been mixed with ornaments of third parties and keeping in mind the value of the same at Rs. 62,928/- as arrived at by the adjudicating authority, we are inclined to hold that interests of justice would be met if the quantum of fine is reduced to Rs. 30,000/- and we order accordingly. The appellant Sri P.K. Das is further directed to exercise option of redemption within three months from the date of receipt of this order and within a month thereof convert primary gold of 156.500 into gold ornaments as per law and report compliance to the adjudicating authority failing which the same will be liable for absolute confiscation.
7. A huge penalty of Rs. 10 lakhs (Ten lakhs) has been imposed jointly on the appellants under the impugned order. Imposition of a penalty jointly in the names of two persons is not permissible in law or for that matter under the provisions of this Act. Be that as it may, the fact remains that two hand books have been seized from the possession of the appellants evidencing transactions in gold of a very considerable magnitude without valid licence. For the reasons stated above, we have already found the statement of Sri P.K. Das to be voluntary and true. Therefore, having regard to the statement recorded from the appellant, Sri P.K. Das, coupled with the seizure of two private account books evidencing transactions in gold to a large extent, we are inclined to think that the situation warrants imposition of a substantial penalty. While setting aside the penalty jointly imposed on the appellants under the impugned order, we hold that the appellants would be liable for penalty individually on the basis of contravention under the Act found against them. The evidence on record clearly indicates that both the appellants have been transacting in gold without a valid licence by taking orders from various third parties and manufacturing new ornaments through four persons, of whom one Sri Mondal is a certified goldsmith. Even the certified goldsmith, Sri Mondal is only a front or facade or name lender for the appellants.
We, therefore, hold that it is established beyond doubt by the evidence on record that the appellants have been dealing in gold without a licence contravening Section 27(1) of the Act. Possession of primary gold is an offence and the possession of primary gold of 156.500 grams is also admitted by the appellants. The private accounts, as already stated, evidenced transaction in a very large scale. Taking all these factors into consideration, we impose a penalty of Rs. 50,000/- on the appellant, Sri P.K. Das, and Rs. 25.000/- on Sri N.C. Das. Except for the above modifications, the appeals are otherwise dismissed.