1. These are two appeals preferred by the appellants Shri Lalchand Pannalal Kothari and Rameshkumar Pannalal Kothari against the common Order of Adjudication dated 3.7.1987 passed by the Deputy Collector of Customs (Prev.), Gold Control, Bombay. Since the facts and point of law involved arc common, I propose to dispose them off through a single order. The Advocate argued for both the cases together during personal hearing.
2. Both the appellants are certified goldsmiths holding valid Certificate as Goldsmiths for carrying on the business as a certified Goldsmith under Section 39 of the Gold Control Act.
3. The Gold Control Officers searched the working premises of the appellants and found 74.700 gms. of gold ornaments in excess of the recorded stock-in-trade as Certified Goldsmiths. The said alleged excess stock of gold ornaments was pertaining to two G.S. 13 Registers maintained by the appellants since both the appellants were keeping their stock collectively at one and the same place. The appellants were issued the Show Cause Notice and the seized gold ornaments were proposed to be confiscated on the allegation of the contravention of Section 27(1), 41(b) and 55 of the Gold (Control) Act, 1968. The Lower authority confiscated the gold ornaments and allowed the appellants to redeem them on payment of Rs. 5,000/-. Both the appellants were penalised by the lower authority and a penalty of Rs. 500/- upon each of the appellants was imposed.
4. The appellants submitted that the Government of India, Ministry of Finance have laid down and issued instructions to the effect that the stock of gold/gold ornaments upto 500.00 gms. in the possession of the certified goldsmith should not be made the subject matter of seizure inspite of some irregularities. In this case the total stock of the gold/gold ornaments held by the two certified goldsmiths did not even exceed 50 gms. per goldsmith.
5. The Government of India in its Circular No. 14/1978 dated 10th May, 1978 has stated as under in the matter of seizure of ornaments etc., from certified goldsmiths: The matter regarding seizure of gold or gold ornaments from certified goldsmiths has been further re-examined in view of the large number of representations received from Goldsmith Associations all over the country. It has now been decided that if gold ornaments or gold with goldsmiths involved in any offence is below 500 gms.
the same need not be seized as a matter of routine. Nevertheless, offence may be booked against the goldsmith if any prima-facie contravention of Gold Control Act is noticed and departmental proceedings for imposition of personal pernalty may be considered.
6. The Government of India in another Circular No. 1/78 has given in the matter of seizure of gold and gold ornaments, instructions against booking petty cases against goldsmiths/gold dealers where the excess or shortage of stock of gold/gold ornaments is nominal. It is stated in the said circular as under: It is therefore, suggested that as a working rule where on proper verification of the actual stock of gold/gold ornaments in the goldsmith's/dealer's premises, if any shortage or excess noticed does not exceed 2% of the recorded balance in the statutory registers, subject to a maximum of 50 gms. in respect of a goldsmith and 100 gms. in respect of the gold dealer, the same may be overlooked provided no malafides are suspected in such excess/shortage in stock. Where however, this percentage works out to a considerable value or where the quantity difference has great evidentiary value for a serious offence otherwise disclosed, there would be no case for such leniency.
7. Appellants contended that the Certified Goldsmiths are required to maintain the registers in terms of net weight of the gold ornaments.
There is no legal and statutory obligation on the part of the Certified goldsmiths to maintain the register of the gold ornaments in terms of gross weight. In the present case the physical weighment of the gold ornaments of stock-in-trade of two appellants was carried out in terms of gross weight of the gold ornaments. It is evident from the Panchanama that the net weight of the gold ornaments was not looked into. According to the appellants, the alleged excess was attributable to the weighment of the gold ornaments wrongly taken in terms of gross weight instead of their net weight.
8. The Lower Authority has not discussed anything about the alleged contraventions of Sections 27(1), 41 (b) and 55 of the Gold Control Act in his finding. The ingredients constituting the said contravention have not been brought on record and discussed by the lower authority in his finding. It is the requirement of law that the onus lies upon the department to establish the charges levelled against the delinquent. In the present case the required evidence to hold the contraventions alleged against the appellants have proved to be totally absent.
9. The appellants claim that the order of confiscation is not in conformity with the practice and precedent followed by the Department in view of the instructions issued by the Government of India.
10. There is no evidence on record that the appellants were carrying on business as a Licensed Gold Dealer without holding Gold Dealers Licence. The lower authority has totally forgotten that the appellants Shri Rameshkumar P. Kothari was permitted to sale and purchase of the gold ornaments under Notification No. 1/78 to a limited extent. In view of the undisputed facts on record the contravention of Section 27(1) and Section 41(b) are not established. In respect of contravention of Section 55, the appellants have claimed that there was no excess and unaccounted gold ornaments. The alleged excess was on account of the faulty manner of physical weighment at the time of seizure. There is no other evidence on record to controvert the evidence that the weighment was taken in terms of gross weight ignoring the net weight of the gold ornaments. The Appellants are entitled to benefit of doubt.