1. Being dis-satisfied with the confiscation of the seized Gold ornaments with an option to redeem the same on payment of a redemption fine of Rs. 1,50,000.00 and also imposition of penalty of Rs. 40,000/- the appellant has filed the present appeal.
2. Factual backdrop: The appellant is the proprietor of the firm M/s.
Dwaraka Dass Seth Jewellers, New Delhi. He holds a Gold Dealers Licence. On 6-4-1985 the business premises of the said firm was raided and as a result thereof an excess of new Gold ornaments of 67 pcs.
weighing 1133.100 gms of 22 cts. purity was found. Since the appellant could not produce any evidence, documentary or otherwise, the said excess gold ornaments valued at Rs. 2,15,270/- (approximately) were seized alongwith the relevant statutory records viz. GS 11, GS 12 registers, sale and purchase voucher books being considered relevant to the proceedings of the case. Statement of the appellant was recorded on the spot in which he pleaded his ignorance about the said excess gold ornaments by stating that since he was sick for the last one week, his father was looking after his shop and that his father had left for Amritsar on 5-4-1985 and it may be possible that his father might have received new gold ornaments from some goldsmith or dealers without issuing receipt vouchers. After the seizure and the recording of the statement of the appellant on the spot neither the appellant nor his father came forward with any specific defence regarding the acquisition or possession of the excess gold ornaments till 8-4-1985 and it is only on 9-4-1985 when the appellant appeared in pursuance of summons issued under Section 63 of the Gold (Control) Act by the authorities concerned to give evidence and produce documents, that he came out with the defence that his father arrived at Delhi on 8-4-1985 from Amritsar and told him that on 5-4-1985 he (his father) received the excess gold ornaments from one M/s. New B.K. Jewellers under their issue voucher No. 4 dated 5-4-1985. That these ornaments were left by the said Shri Kimti Lal inspite of his father's request to take the said gold ornaments back as the appellant was absent from the shop on account of illness. He admitted that no receipt voucher as required under the Gold (Control) Act and the Rules made thereunder was issued by his father showing the receipt of the said ornaments. However, the father of the appellant Shri Dwaraka Dass Seth did not come forward on his own before the authorities concerned to offer any explanation regarding the excess gold ornaments and it was only on 10-4-1985 he (father of the appellant) appeared in pursuance of sommons issued to him under Section 63 of the Gold (Control) Act. In his statement recorded on 10-4-1985, he inter alia stated that he used to come to Delhi occasionally and had been staying with his son; that in the first week of April, the appellant was not feeling well and as such he used to come to the shop of the appellant to lookafter the business and that the appellant used to visit the shop for a short period while coming back after getting treatment from the Doctor. He also stated that on 5-4-1985 Shri Kimti Lal of M/s. New B.K. Jewellers came to the shop of the appellant in the evening alongwuh new gold ornaments covered with the issue vouchers, which he kept in the shop of the appellant, but in a hurry he kept the issue voucher in his pocket and since he had to rush to Amritsar on an urgent call he forgot to tell the appellant about the possession of the said new gold ornaments. He also stated that he had come back to Delhi on 8-4-1985 on receipt of telephonic call from the appellant and on arrival he told the appellant that he had received a voucher which remained in his pocket while going to Amritsar. Statement of the said Shri Kimti Lal, proprietor of M/s. New B.K. Jewellers was also recorded on 10-4-1985 in which he tried to support the version given by the appellant admitting that he did not receive any receipt voucher from the appellant or from his father when he handed over the said gold ornaments on 5-4-1985 and that when on 6-4-1985 in the evening he went to the appellant's shop Shri Ashok Seth informed him that the gold ornaments have been seized from his shop and on hearing this he narrated the incident of 5-4-1985 to him (Ashok Seth). As a follow up action a show cause notice calling upon the appellant to show cause as to why the seized gold ornaments be not confiscated and penalty be not imposed was issued. In reply the appellant inter alia stated that on 5-4-1985 he attended his shop and issued one Issue Voucher No. 1 regarding some ornaments which were required to be sent to Bombay by post but left the shop feeling unfit and giddy on account of weakness and that later on in the evening of 5-4-1985 itself Shri Kimti Lal, proprietor of M/s. New B.K. Jewellers came to the shop of the appellant with a packet containing the seized new gold ornaments alongwith Issue Voucher No. 4 dated 5-4-1985 in his absence. He further stated that at the time of arrival of the said Shri Kimti Lal, his father Shri Dwaraka Dass Seth was present in the shop who told the said Shri Kimti Lal to come the next day but he requested his father to keep the gold ornaments and that he would come next day to settle the transaction with the appellant as it would not be safe to take the ornaments back.
That under these circumstances the father of the appellant took the said gold ornaments alongwith Issue Voucher and since on an urgent call, his father had to left for Amritsar on 5-4-85 he took the said Issue Voucher in his pocket alongwith him and forgot to tell the appellant regarding the acquisition/possession of the said gold ornaments so left by Shri Kimti Lal. However, after the usual adjudication proceedings the Collector Central Excise ordered for the confiscation of the seized new gold ornaments with an option to redeem the same on payment of a redemption fine of Rs. 1,50,000/- and also imposed a personal penalty of Rs. 40,000/- on the appellant. Hence the present appeal.
3. Shri Ganesan, the Advocate duly assisted by Shri B.B. Bagga, Advocate appearing for the appellant vehemently contended that the defence of the appellant that the seized excess new gold ornaments were handed over by Shri Kimti Lal of M/s. New B.K. Jewellers under their issue Voucher No. 4 was not found unbelievable by the Adjudicating Authority and therefore the confiscation of the seized new gold ornaments and imposition of penalty of Rs. 40,000/- on the appellant for breach of the provisions of Section 55 of the Gold (Control) Act should not have been viewed with such harsh punishment. In a nutshell he submitted that in the facts and circumstances of the case failure to issue receipt voucher or to make the entry in the statutory records regarding the acquisition/possession of the new gold ornaments may be termed as a technical breach for which a lenient view may be taken and cited the case of Kailash Jewellery House (Order No. A/182-85-NRB dated 23-5-1985 and Bharat Art Jewellery (Order No. A-133/86-NRB dated 19-3-1986).
4. In reply Smt. Nisha Chaturvedi, learned SDR submitted that the said defence of the appellant was a tailored one as could be seen from the facts and circumstances of the case and more particularly from the conduct of the appellant, his lather Shri Dwaraka Dass Seth and Shri Kimti Lal. In a nutshell she submitted that the seizure was effected on 6-4-1985 and it is unbelievable that the father of the appellant Shri Dwaraka Dass Seth who is said have received the gold ornaments from Shri Kimti Lal under the cover of Issue Voucher No. 4 would have kept the said voucher in his pocket or would have forgotten to tell his son about such a transaction involving huge quantity of gold. She sub-mitted that had it been a fact, the father of the appellant would have definitely issued the receipt voucher to the said Shri Kimti Lal and would have also kept the issue voucher in the shop itself and informed the appellant accordingly. The story that the father of the appellant was present at the shop and he kept the issue voucher given by the said Shri Kimti Lal in his pocket and left for Amritsar without informing the appellant about the transaction is a face saving device.
She further submitted that the Collector Central Excise had already taken a lenient view by giving an option to the appellant to redeem the seized new gold ornaments.
5. Before we proceed to consider the arguments advanced by the parties it may be stated that the fact that the contraband excess gold ornaments were not entered in the statutory record as required under Section 55 of the Gold (Control) Act is not in dispute. Likewise the fact that no receipt voucher in respect of the contraband new gold ornaments was issued as required under Section 36 of the Act read with Rule 13 of the Gold Control (Forms, Fees & Miscellaneous Matters) Rules, 1968 was issued is also not in dispute. And to this extent the findings of the Adjudicating Authority are not in challenge. What is in challenge is that since according to the defence the transaction relating to the new gold ornaments, i.e. to say the contraband new gold ornaments were given by Shri Kimti Lal under a proper Issue Voucher stands established a lenient view be taken for contravening the provisions of Section 55 of the Gold (Control) Act.
6. At the outset we may state that the Adjudicating Authority after stating the facts and arguments advanced by the defence in his findings confined itself only to the question of breach of Section 55 of the Gold (Control) Act and ultimately concluded that the appellant was guilty of breach of Section 55 of the Gold (Control) Act and did not advert itself to the defence of the appellant that the contraband excess gold ornaments were given by Shri Kimti Lal to the father of the appellant as alleged nor recorded any categorical finding regarding the validity of the said defence of the appellant. This is not a happy way of dealing with such a case. It may further be stated that since the breach of the provisions of Section 55 and Section 36 of the Gold (Control) Act are not challenged before us by the appellant, we were not required to go further regarding the defence of the appellant as to whether the excess gold ornaments were given to the father of the appellant by the said Shri Kimti Lal or not. But since the appellant has made the said defence as a ground for taking a lenient view it has become necessary for us to examine the validity of the said defence of the appellant. On the evaluation of the entire evidence on record including the attending circumstances and the conduct of the appellant, his father and Shri Kimti Lal the defence of the appellant that on 5-4-1985, i.e. to say a day prior to the raid and seizure of the contraband gold ornaments the appellants was ill and therefore his father Shri Dwaraka Dass Seth was looking after the affairs of the appellant shop; that Shri Kimti Lal, proprietor of M/s. New B.K.Jewellers came to the shop of the appellant in his absence with the contraband new gold ornaments alongwith Issue Voucher No. 4; that his father Shri Dwaraka Dass Seth first refused to accept the contraband gold ornaments and subsequently on the persistent request of the said Shri Kimti Lal his father took possession of the contraband gold ornaments alongwith the said Issue Voucher No. 4 (and without issuing the receipt voucher); that his father had to leave for Amritsar in the night of 5-4-1985 itself on a urgent call from Amritsar; that in a hurry he (his father) forgot to tell about the transaction to the appellant and also took the issue voucher in his pocket and that when his father arrived on 8-5-1985 at Delhi his father told about the transaction does not appear to be convincing at all. To begin with the pivot of the defence case that on 5-4-1985 the appellant was sick and therefore his father was attending the shop is not convincing at all in the facts and circumstances of the case. To wit - (i) on enquiry about the excess new gold ornaments on the spot on 6-4-1985 the appellant in his written statement came out with the explanation that he was sick for the last one week and did not attend the shop and in his absence his father was looking after his shop. To verify the said explanation of the appellant given on the spot that he was sick for the last one week and did not attend the shop the authorities concerned confronted him with the entries recorded by him in his statutory record namely GS 11 and GS 12 Registers and Issue Voucher No. 1 & 2 both dated 5-4-1985 (which were seized at the time of raid on 6-4-1985) when he appeared in pursuance of the summons issued under Section 63 of the Gold (Control) Act on 9-4-1985. On being so confronted he had to admit that entries made on 3-4-1985 and 5-4-1985 in the said Registers and Vouchers were in his own handwriting. Sensing that the aforesaid entries made by himself in the said record belies his earlier statement that he was sick for the last one week and his father was attending the shop in his absence the appellant hastened to add that the entries in both the Registers were made on 6-4-1985 (i.e. to say after a few days of the transactions). The said statement which is in his own handwriting reads thus - "...I have been shown my G.S. 11 and G.S. 12 Register (current). The entry in the G.S. 11 Register against 3-4-1985 and 5-4-1985 are written in my own Hand. The entry in the G.S. 12 Register dated 3-4-1985 is also written in my Hands. Receipt Voucher No. 1 & 2 dated 3-4-1985 have been written in my own Hands. The Issue Voucher No. 1 dated 5-4-1985 has also been written in my Hands. The entries in both the Register were made on 6-4-1985.
I have given the statement without any pressure or duress and the same is correct." (ii) Later on the appellant improved upon his above two earlier statements wherein he had stated that he was sick for the last one week and his father was attending the shop in his absence and that the entries made by him in G.S. 11 and G.S. 12 Registers were made on 6-4-1985. In his reply dated 17-5-1985 to the show cause notice the appellant realising that his statement made on the spot on 6-4-1985 that he was sick for the last one week and his father was attending the shop stands belied by the entries made by him in his statutory record (that is to say G.S. 11 and G.S. 12 Registers on 3-4-1985) and also by the Issue Vouchers No. 1 & 2 both dated 3-4-1985 (which were written and issued by him) and that his subsequent statement made on 9-4-1985 to the effect that the entry in both the Registers were made on 6-4-1985 itself proves the contravention of Section 55 of the Gold (Control) Act inasmuch as the said section makes it obligatory on him to record the transaction, as and when such transaction takes place, the appellant came out with a new theory that though his father normally resides at Amritsar happened to be at Delhi in the first week of April, 1985 and that at the end of March, 1985 the appellant fell ill due to seasonal Flue type fever and became very weak; that during the first week of April 1985 the appellant attended the shop on 3-4-1985 for a short while and issued two 'Receipt Vouchers' Nos. 1 and 2 for two transactions and that again on 5-4-1985 he attended the shop and issued one Issue Voucher. However, feeling unfit and giddy on account of weakness he left the shop for his residence on 5-4-1985.
The relevant portion of his reply is extracted below - "...At the end of March 1985 the respondent fell ill due to seasonal Flue type fever and became very weak on this account. In these circumstances he stopped attending to his business regularly. In those days Shri Dwaraka Dass Seth, father of the respondent (who is an old man leading a retired life and normally residing at Amritsar) happened to be at Delhi. To ensure that the newly started business of the respondent might not get any set-back, if his shop is closed, the said Shri Dwaraka Dass Seth lent a helping hand by sitting at the shop of the respondent during the business hours in this period, and thus enabled the respondent to spare himself from attending his shop for the whole day and take rest at his place. In these circumstances, the respondent used to attend his shop for a while to see if there was any job of urgent nature which required his personal handling. During the first week of April 1985 the respondent thus attended his shop on 3-4-1985 for a short while and issued two 'Receipt Vouchers' Nos. 1 and 2 for two transactions.
Again on 5-4-1985, he attended his shop and issued one Issue Voucher No. 1 regarding some ornaments which were required to be sent to Bombay by post. He also prepared the parcel and placed the said vouchers along-with the ornaments in it for posting. However feeling unfit and giddy on account of his weakness he left his shop for his residence even without posting the said parcel. The said parcel was later on, posted on 12-4-1985 vide Post Office Insured Parcel Receipt No. 847 issued by Post Office, Karol Bagh...." 7. Thus when the pivot of the defence case that the appellant was sick and his father was looking after the shop on 5-4-1985 is unbelievable the entire defence of the appellant falls like a pack of cards.
However, we proceed to consider the other part of the defence story.
8. The statement of Shri Dwaraka Dass Seth, father of the appellant and Shri Kimti Lal, proprietor of M/s. New B.K. Jewellers, Laxmi Nagar, Delhi to the effect that Shri Kimti Lal came to the shop of the appellant with his contraband new gold ornaments alongwith Issue Voucher No. 4 dated 5-4-1985 for approval and sale to the said firm; that since the appellant was not present his father Shri Dwaraka Dass Seth advised Shri Kimti Lal to contact his son on the next day but Shri Kimti Lal requested Shri Dwaraka Dass Seth to keep his ornaments in his shop for safe custody since it was getting dark and was not safe for him to take the ornaments and therefore the said Shri Dwaraka Dass Seth kept the new gold ornaments in the shop with utmost reluctance and also took the Issue Voucher is also not believable in the facts and circumstances of the case. It is in the statement of Shri Kimti Lal that he came to the shop of the appellant on 5-4-1985 in the afternoon, i.e. to say at 1600 hrs. It is not in dispute that the shop of the appellant is situated in Karol Bagh, New Delhi and the shop of the said Shri Kimti Lal in Laxmi Nagar, Delhi which is not too far from the shop of the appellant. The incident relates to April 1985 and the normal business hours were upto 7 PM in the evening. It is the case of the appellant himself that when Shri Kimti Lal came with the contraband new gold ornaments his father Shri Dwaraka Dass Seth asked him to come on the next day to finalise the deal and refused to accept the contraband new gold ornaments but Shri Kimti Lal persistently requested to keep the same because it was going to be too dark and it was not safe for him to take the contraband new gold ornaments back and therefore his father Shri Dwaraka Dass Seth kept the gold ornaments and also took the issue voucher. The reason assigned for keeping the contraband golds in the shop of the appellant is not believable because as stated above according to Kimti Lal and Dwaraka Dass Seth the contraband gold was brought in the afternoon and the shop of Shri Kimti Lal was not too far. Besides, the alleged Issue Voucher No. 4 dated 5-4-1985 was also not found on the spot alongwith the contraband gold ornaments and the explanation of the appellant that his father kept the said voucher in his pocket and took it to Amritsar with him when he left for Amritsar without disclosing to the appellant also appears to be improbable keeping in view the quantity of the new gold ornaments and its value.
The further defence that Shri Kimti Lal came to the shop of the appellant with the contraband new gold ornaments for approval and finalising the transaction and since the appellant was not present he left the gold ornaments and the Issue Vouchers with his father with the assurance that he would come next day to finalise the transaction with the appellant himself and accordingly he did come to the shop of the appellant in the evening of 6-4-1985, (i.e. to say after the raid and seizure of the contraband new gold ornaments) to finalise the deal and since the gold ornaments were already seized the matter ended there is also not believable and the eloquent facts and circumstances on record belies the said story of the defence. To begin with the said Issue Voucher reads as follows -Delhi -110092 No. 4 Date 5-4-1985 Customer's/Dealer's Name & Address: M.S. Dwaraka Dass Seth, Jeweller - Karol Bagh, New Delhi (in Hindi) L. No. 44/84Piece Description Purity Weight Grams Rate Amount of Gross Nett Rs. Ps.53 Jewar Pa 22 Ct. 898-00 898-0014 Jewar Pa (in Hindi) 235-100 235-10067 Whether gold was required Labour to be declared under Section S.T. 16 and if so, it has been Total included in a declaration (toCustomer's Signature For B.K. Jewellers Sd/- Kimti Lal (in Hind From a perusal of the above it would appear that the said voucher is out and out a sale voucher and there is not even slightest indication in it to show that Shri Kimti Lal took the contraband gold for approval by the appellant or for finalising the transaction. In the said voucher the appellant was described as a purchaser of the new gold ornaments.
It was not the case of the appellant that prior to the bringing of the contraband new gold ornaments to the shop of the appellant there was any negotiation between the appellant and Shri Kimti Lal regarding the sale or purchase of the contraband new gold ornaments. It is significant to note that according to Shri Kimti Lal himself he came to know about the seizure of the new gold ornaments immediately after the seizure on 6-4-1985 itself but it is curious that he never complained to the authorities concerned and it is only when the authorities concerned visited the shop on 10-4-1985, he came out with the said story. It is also significant that at no stage of the adjudication proceedings the said Shri Kimti Lal ever lodged his claim of ownership with regard to the contraband new gold ornaments nor he appeared as a defence witness nor he filed any affidavit and contended himself with the assurance given by the appellant that on the finalisation of the adjudication proceedings, he will return the gold ornaments to the appellant.
9. During the course of hearing photo copies of the quarterly returns filed by M/s. New B.K. Jewellers with the Central Excise Authorities for the period from January 1985 to March 1985 and April 1985 to June 1985 were also filed. After drawing our attention to the said quarterly returns and also certain issue vouchers of the M/s. New B.K. Jewellers Shri M. Ganesan, learned counsel for the appellant contended that the contraband gold ornaments were found entered in the books of accounts of Shri Kimti Lal, proprietor of M/s. New B.K. Jewellers and therefore this piece of evidence also supports the defence version. We have considered the arguments and find no force in it. It may be stated that once we have disbelieved the statement of the appellant, his father Shri Dwaraka Dass Seth and Shri Kimti Lal as aforesaid, there is no need to consider the evidence of the sellers or the vouchers and accounts books produced in proof thereof. In the case of Kaigaonkar v.G. C. Administrator, 1986 (25) E.L.T. 566 a somewhat similar defence was taken and the Tribunal refused to consider the statement of sellers and the vouchers holding that they were all got up for the purposes of the case (See Para 13). Even on merits we find no force in the said contention. Rule 13 of the Gold Control (Forms, Fees and Miscellaneous Matters) Rules, 1968, enjoins upon every licensed dealer acquiring, accepting, selling, delivering, transferring or disposing of gold to issue a voucher in relation to such gold at the time of each such transaction and the only exception being that, if the licensed dealer, or the refiner, hands over gold temporarily to his artisan, then no such voucher may be prepared. Sub-rule (3) of Rule 13 requires that the voucher shall be in duplicate, and serially numbered - new series of number being used for each financial year. Further requirement, in terms of Sub-rule (4), is that the duplicate copy of the voucher is to be retained by the licensed dealer issuing it and the original copy of the voucher has to be given to the "person who sells, delivers, transfers or otherwise disposes of gold". Another requirement contemplated by Sub-rule (5) is that the books containing blank vouchers have to be presented to the proper officer for affixing his initials or stamp on each book before it is brought into use, and that according to Sub-rule (6) separate voucher-books shall be maintained in respect of receipts and issues. This requirement shall come into play, read with Section 55 of the Act, whenever the gold is acquired in any manner, because after specifying certain known transactions of purchase and sale, the section contains expressions such as "otherwise acquired or accepted" or "otherwise received". A cumulative reading of all these provisions makes it abundantly clear that it was as much an obligation of Shri Dwaraka Dass Seth to issue a voucher in favour of M/s. New B.K.Jewellers while receiving the gold ornaments on approval as alleged as that of M/s. New B.K. Jewellers to issue one while handing over the same. In the instant case it is admitted to the appellant that no such voucher in favour of M/s. New B.K. Jewellers was issued by the appellant's father while receiving the contraband gold ornaments. It is also admitted to the appellant that at the time of seizure of the contraband new gold ornaments Issue Voucher No. 4 dated 5-4-1985 said to have been issued by M/s. New B.K. Jewellers was not found in the shop nor any entry relating to the contraband gold ornaments was made in the statutory records of the appellant firm. The appellant has, no doubt, been able to procure some voucher from M/s. New B.K. Jewellers who themselves did not, as pointed out by us above, come forward to lodge any claim in respect thereto, but apart from the fact that this voucher (Issue Voucher No. 4 dated 5-4-1985) of M/s. New B.K.Jewellers, had it been in existence at that time, must have been produced there and then before the authorities concerned, the alleged illness of the appellant or the timing thereof notwithstanding; the most important circumstances which detracts from the version given by the appellant is the fact that no voucher, containing copy of the voucher which the father of the appellant Shri Dwaraka Dass Seth was under obligation to issue in favour of M/s. New B.K. Jewellers while receiving the gold ornaments was found at the shop nor produced. It is apparently for the reason that none existed at the time of search and seizure of the contraband gold ornaments in question. Such a voucher-book for obvious reasons, could not have been subsequently made up as premises had been raided, and inventory of every thing found, including Books and records maintained at the shop, prepared; whereas a single voucher from some other party namely M/s. New B.K. Jewellers, who themselves have kept away from the proceedings, and whole books of account were not under scrutiny, could easily be procured. Even that voucher remains a dubious document in the absence of any evidence to corroborate credible value thereof, and M/s. B.K. Jewellers having at no stage come forward to stake a claim to this comparatively large quantity of gold ornaments. It may also be added that there is nothing to connect Issue Voucher No. 4 dated 5-4-1985 with the contraband gold ornaments inasmuch as neither any details of the ornaments nor the nature thereof nor individual weight nor other necessary particulars have given in the said voucher. Thus we reject the contention of the learned counsel for the* appellant.
10. In the light of the above the case law cited by the learned counsel for the appellant does not help him and no leniency is called for in the matter.
12. [Per: V.P Gulati, Member (T)]. -I have gone through the order recorded by brother Sh. Agarwal. He has rejected the plea of the appellants for leniency by analysing the evidence on record and rejecting the explanation given for non-accountal of the ornaments seized and confiscated based on the evidence adduced by the appellants.
13. I observe that the order impugned before us is that of Collector of Central Excise, New Delhi. The Collector has recorded in detail the pleas made by the appellants to explain as to why the ornaments seized by the Central Excise authorities were not entered in the statutory records at the time of seizure and why the compliance with the provision of Section 36 by way of issue of receipt voucher had not been complied with. The main plea of the appellants before the Collector was that the appellant was not well on the day of the seizure and in fact had not been keeping well during the previous week and the appellant after attending his job for some time had gone home leaving his father, who had come from Amritsar on a visit to Delhi, to look after the shop and that he was not aware as to how the ornaments came to be kept in the shop and that his father who had left the previous evening for Amritsar and who might have received the same and that he would be able to explain. Later on, the appellant produced his father before the authorities and a voucher for the ornaments issued by M/s. B.K.Jewellers was produced having been issued on 5-4-1985. The explanation given was that the appellant father had suddenly to leave for Amritsar on a message from there and had taken the voucher covering the ornaments with him without informing the appellants about the receipt of the ornaments by him. The father was produced before the Central Excise authorities and is stated to have come back on 8-4-1985 and a statement was recorded from him and also from Sh. Kimti Lal of M/s.
B.K. Jewellers who supplied the ornaments and issued the voucher. The father in a statement stated that the ornaments had been received by him from Sh. Kimti Lal and in fact wanted to return the ornaments as his son was not there. He kept the ornaments with him on the plea of Sh. Kimti Lal that it would be dark by the time he went back to his establishment as it may not be safe for him to take the ornaments with him. The statutory records of the ornaments of M/s. B.K. Jewellers was checked by the Central Excise authorities and no discrepancy was found in regard to the issue of the voucher for the gold ornaments in the name of the appellants and also in the statutory records regarding the accountal of ornaments stated to have been supplied by him.
14. The Collector of Central Excise took note of all the evidence briefly set out above and also set out in the order of brother Sh.
Agarwal. He however, did not choose to find any fault with the explanation or with the evidence produced and his findings are as under - "I have carefully gone through the facts and records of the case including the reply to the show cause notice and submissions made at the time of personal hearing. No licensed dealer is required to possess or to have custody of *any gold/gold ornaments which are not accounted for in his statutory records. From the facts on records, it is evident that seized gold ornaments were not entered in the statutory records of the noticec and therefore, he has committed breach of Section 55 of the Gold Control Act, 1968. Having regard to the object of the Act and the purpose for which the accounts are maintained under Section 55 of the Act, the legislature intent is clear that a licensed dealer is required to make the entries in regard in the registers and forms prescribed under the Act contemporaneously when the dealer buys or acquires, sells or transfer gold. Sub-section (2) of Section 55 requires a licensed dealer to make the entries "as soon as" he buys, acquires or sells gold. If that is not done and the entries are left to be made later on, the very purpose for which accounts are sought to be maintained shall be defeated. The maintenance of accounts relating to the transactions of sale and purchase of gold ensures check on the unauthorised transactions of a dealer and facilitates regulation and checking of the transactions of gold. I find that the party has admitted that the seized gold ornaments were not entered in the prescribed records. The importance of such entries has already been emphasised in many judgments and particularly in the judgment of Allahabad High Court in the case of Kashi Nath Seth v. Collector of Central Excise, Allahabad [AIR 1976 All (35)]. Any subsequent enquiries by the Central Excise Department cannot create any estoppel to penal action for a violation which is admitted at the time of seizure and has not been directed subsequently while there may be circumstances, as pointed out by the party that his father had gone out of station, the fact remains that the seized gold ornaments were found in excess of stock as entered in the relevant records prescribed under the Gold (Control) Act, 1968. The charges framed in the show cause notice are therefore, established".
15. From the concluding portion of his findings, it is clear that the Collector of Central Excise by saying "while there may be circumstances as pointed out by the party that his father had gone out of station, the fact remains that gold ornaments were found in excess of the stock as entered in the relevant records prescribed under Gold Control Act" had apparently accepted the explanation given for non-accountal of the ornaments but penalised the appellants for the factum that in any case the same had not been entered in the statutory records as required under the law and held the contravention of Section 55 of the Gold Control Act to have been established. There is no whisper in his order as to whether the explanation given was a concocted one nor he has found any fault with the evidence produced and the explanation given by the appellants as to the circumstances which resulted in the goods not having been accounted for in the statutory records.
16. The point for consideration is whether as pointed out by Brother Agarwal, there is no contradiction between the first statement given by the appellant, Sh. Ashok Seth and the subsequent statements recorded from him and others. In the first statement, he has merely stated that he had not been keeping well for the past one week and his father was attending to the work. The Central Excise authorities did not persue the matter immediately with the father for verifying the veracity of the statement by enquiring from the appellant as to the address of his father and by asking the authorities of the concerned place to record a statement from his father. The authorities had taken all the vouchers lying in the shop and which had been written out by the appellant and on the day the first statement was recorded, no question was asked from him as to the person who had made entries in the vouchers. The information that Sh. Seth had written out the voucher was elicited from the appellant only later and on detailed questioning, it came to revealed that Sh. Ashok Seth had attended to the work for sometime on 5th, the day prior to the seizure and that he made entries in the record etc. but he maintained that he was not there when the ornaments were seized. This was backed up by the statement of his father as also of Sh. Kimti Lal of M/s. B.K. Jewellers. It is seen that the information that the ornaments had been received by the appellants father was given immediately on the seizure and with the minimum loss of time. The father also appeared before the Central Excise authorities. M/s. B.K. Jewellers accounts were also checked and the issue of the seized ornaments were found to be accounted for in their records. From the sequence of events, it cannot be said that the statement given by the appellants regarding non-accounting and with the evidence produced are such as are inconsistent with the plea taken. The lower authorities during the investigation and later in the show cause notice have not alleged that the version given was an after thought nor the Collector in his order has found fault with the version given or the evidence adduced. At no time it was put to the appellants or Sh.
Kimti Lal as to how the version given by them was not believable and if it was done, they would have had the opportunity to explain the position. This not having been done at this stage, I do not think it is for us to given findings on the veracity of the evidence produced and version given without any basis for the doubts, if any, having been laid at the investigation or in the findings by the Collector. The real point here is that whether when the ornaments were received, Sh. Ashok Seth was present in the shop, if not, who was present and who took the delivery of the ornaments. The evidence on record points to the fact that the same were received by his father and at the earliest point of time, the voucher which was with him, was produced. No contrary evidence to this has been brought on record or adduced and there is nothing in the record of investigation placed before the Tribunal that this was not so. The evidence produced is not inconsistent with the plea taken.Bharat Art Jewellers v. Collector of Customs, New Delhi, Order No. A/133/86-NRB dated 19-3-1986 where a quantity of 1788.00 gms was seized and was not reflected in the statutory records, a plea was taken that the entries could not be made because of the sickness of one of the concerned partner when the ornaments were found to be covered by vouchers produced, the Tribunal has held as under - "In the light of the foregoing discussions coupled with the fact that there is no allegation that the appellant firm had disposed of the gold/gold ornaments in a clandestine manner or that the seized gold/gold ornaments were smuggled gold and the Adjudicating authority has only found him guilty for violating the provisions of Section 55(2) of the Gold (Control) Act inasmuch as the seized gold/gold ornaments were not accounted for in the statutory accounts for which omission the appellant firm have advanced their own reasons, we are of the opinion that an extremely serious view is not called for in the circumstances of the case. Accordingly, we order that the confiscation of the gold/gold ornaments be set aside as the same was admittedly covered by the vouchers and the transactions stand duly established and time-lag for not making the necessary entries in the record was not even a day but was in hours only. We also feel that a penalty imposed is somewhat excessive and a penalty of proper nature would serve the purpose obviously to keep the appellant firm careful and vigilant in future. Accordingly, we reduce the penalty to Rs. 5,000/- only." Similar view has been held by the Tribunal in Order No. 67/85-NRB dated 16-12-1985 in the case of Collector of Central Excise, New Delhi v.Kailash Jewellery House and Order No. A/105/86-NRB 1986 (24) E.L.T. 618 (Tribunal) in the case of Jamna Dass Ram Parkash Patiala v. Collector of Central Excise, Chandigarh.
18. In view of my findings above, following the ratio of the above decision, in the facts and circumstances of the case, I hold that a lenient view is called for.
19. So far as the ownership of the ornaments is concerned, I observe that a large quantum of the ornaments comprising of two items of the same nature had been supplied against the voucher showing the appellants as the customers. If the ornaments had got the ornaments just for approval, then there was no need for such a large quantum of the same to be supplied as for that purpose one item each of the ornament would have sufficed. It is, further, seen that Shri Kimti Lal of M/s. New B.K. Jewellers who supplied the ornaments did not claim of ornaments before the adjudicating authority and not joined in the adjudication proceedings.
20. In view of this and the other reasons set out in the appeal in the Order-in-Appeal No. 9/85-NRB, Shri Kimti Lal of New B.K. Jewellers v.Collector of Central Excise, New Delhi, it has to be held that the appellants are the owners of the ornaments.
21. Taking into account, the totality of the circumstances and conclusions above, the purpose penal action in a case like this is to ensure that the appellant will be more vigilant in future. In this background, therefore, I order while upholding the confiscation of the ornaments, the reduction of redemption fine to Rs. 25,000/- and of levy of penalty to Rs. 10,000/-.
Inasmuch as there is a difference of opinion between the two Members regarding the quantum of redemption fine to be fixed for redemption of the gold ornaments confiscated in terms of lower authority's order and also the quantum of penalty to be levied on the appellant, the following point of difference is required to be referred to the third Member for decision - "Whether in the facts and circumstances of this case, the quantum of redemption fine fixed for the redemption of gold ornaments confiscated and the penalty levied in terms of the lower authority's Order is maintainable as held by the Member (Judicial) or the same is required to be reduced taking a lenient view to the level as held by Member (Tech.)." 22A. I heard both sides on 24-4-1989. Shri Ganesan, the learned Advocate submitted that the order proposed by the learned Member (Judicial) was based on the finding that the voucher produced by the appellants was not reliable. The learned Advocate argued that such a finding would be beyond the scope of the show cause notice and of the impugned order. He submitted that in the show cause notice there was no allegation that the voucher issued to cover the ornaments was not a genuine one. On the other hand, according to the learned Advocate, the impugned order shows that the Collector accepted the veracity of the voucher but at the same time held that the provisions of Section 56 of the Gold Control Act having been violated, the goods were liable to be confiscated and the appellants liable to penalty. Shri Ganesan argued that as this was an appeal filed by the dealer and not by the Department, the Tribunal could not, injustice, travel beyond the findings of the Collector and also the allegations made in the show cause notice. Shri Ganesan explained that the summons to Shri Dwaraka Dass Seth were issued on 9-4-1985 and were handed over to Shri Ashok Seth and Shri Dwaraka Dass appeared before the authorities on 10-4-1985 in obedience to the summons. Therefore, there was no dilatory tactics adopted by him. The learned Advocate also emphasised that the statement of Shri Kimti Lal of New B.K. Jewellers was also recorded on 10-4-85 and the issue of the voucher in question was recorded in their accounts. Sh. Ganesan submitted that the admission made by the appellants was only that as non-issue of voucher and explained that Sh.
Dwaraka Dass the father of the appellants not having been a Partner of the firm, could not issue such a voucher. The learned Advocate finally pleaded that in a number of judgments passed by the Tribunal and even the other authorities it was seen that if there was a voucher no seizure took place even though proceedings for violation of Section 56 of the Gold Control Act were initiated.
23. Smt. Dolly Saxena, the learned SDR argued that the Member (Judicial) correctly gave a finding on the defence advanced by the appellants as the Collector did not give such a finding. She supported the finding in the Member's order to the effect that defence version was not believable. She further argued that as the show cause notice alleged that the gold ornaments were received and kept unauthorisedly, such expression was wide enough to cover all the facts and possibilities in the matter. Such possibilities included the unreliability of the voucher. She also submitted that it was only after 24 hours after the seizure that Shri Kimti Lal came to know about the issue of the voucher and submitted that this was indeed unbelievable as held by Member (Judicial). She emphasised that Member (Judicial) gave detailed reasons for rejecting the contentions of the appellants.
Referring to the order proposed by the Member (Technical) the learned SDR argued that since Member (Technical) held that the appellants were owners of the gold, the entire matter was thrown open thereby. She submitted that though the Member (Technical) cited some case law in support of his order, the case law cited by the Member (Judicial) fully supports the findings arrived at by Member (Judicial).
24. I have very carefully gone through the two orders proposed by the two learned Members and the arguments of both sides at the time of hearing held by me. I perused the show cause notice and the Collector's order. The show cause does not make an allegation that the voucher issued by B.K. Jewellers was unreliable. The Department recorded a statement of Shri Kimti Lal, the Proprietor of B.K. Jewellers and verified the issue of voucher as well as statutory records and found nothing wrong. The Collector did not give a finding disbelieving the voucher. On the other hand he seems to have assumed its reliability in the absence of any proof to the contrary and proceeded to order confiscation and penalty on the ground that the ornaments were not entered in the Register as required by law. In the face of these circumstances it is difficult to accept the pleas of the learned SDR that legally it was correct for the Tribunal to sit in judgment on the reliability of the voucher and to come to an adverse conclusion when the Department's case itself was not to the effect that the voucher was not a genuine one. The submission made by Shri Ganesan is that it is not the Revenue's appeal but of the Gold Dealer has some force. I hold that it is not open to the Tribunal, in the circumstances of this case to arrive at an adverse conclusion with regard to the voucher.
25. Shri Ganesan made a submission that even the fine and penalty proposed by the Member (Technical) are harsh. However, I cannot go into that question because in these proceedings I cannot go beyond either of the orders.
26. For the reasons recorded above, I agree with the order of the Member (T). Accordingly while upholding the confiscation of the ornaments I reduce the redemption line to Rs. 25,000/- and penalty to Rs. 10,000/- thus partly allowing the appeal.
27. Final Order : The points of difference in this appeal were referred by the President in terms of Section 81B of the Gold (Control) Act, 1968 read with Section 129C(5) of the Customs Act, 1962 to the third Member and that Member has since recorded his findings.
28. As per the provisions of these Sections, the appeal has to be disposed of in terms of the majority opinion. Accordingly, the appeal is partially allowed as held by the third Member agreeing with the order of the Member (Technical) in para 26 of the order above.