Full Judgment
Apart from it 4 gold mohars weighing 0.046 grams, 10 gold mohars weighing 0.100 grams and one gold mohar weighing 0.006 grams (all bearing marks 'Tikkam Chand Rikhab Dass') and one Swastik coin were found to be primary gold with its weight and purity 99.50. Thus the appellant was found in possession of 3.0118 Kgs. of primary gold in contravention of Section 8(1)(i) of the Act. It was also found that 197 grams of gold articles were found in excess and thereby there was a contravention of Section 16. The appellant had not filed any declaration in respect of the above items.
3. A show cause notice was issued to him as to why the primary gold, gold ornaments and also the gold articles should not be confiscated.
The appellant sent a reply asking for copies of all the documents.
Ultimately he filed a detailed reply stating that a substantial portion of the ornaments belonged to members of his family. He gave the details of the items and the names of the persons to whom they belonged.
According to the appellant none of the said persons owned more than 4000 grams of gold ornaments and gold articles. Hence no declaration was called for. He denied that some of the ornaments were crude in form. The expert opinion was not backed by any reason and such ornaments, in proper form and design, were being used by persons residing in Punjab. The appellant, therefore, requested for the release of the gold ornaments. There was a personal hearing and ultimately the Collector passed the order holding that on personal examination of the items he was convinced that they are liable for confiscation in contravention of Section 71 of the Act. It was held that the items in crude form were nothing but primary gold. The gold mohars and the Swastik coin were also held to be primary gold and nothing else. He ordered absolute confiscation of all the primary gold weighing 3.0118 kilograms. He also ordered the confiscation of 21 gold sovereigns weighing 167 grams with an option to redeem the same on payment of a fine of Rs. 500/-. A penalty of Rs. 10,000/- was imposed. The remaining items were ordered to be released.
4. There was an appeal to the Gold Control Administrator who also upheld the confiscation of the primary gold. The confiscation of the sovereigns weighing 110 gms. was set aside and those items were released. Against the order of the Gold Control Administrator, the appellant herein preferred a Revision Application to the Government of India which was transferred to this Tribunal.
5. The Tribunal by its Order (No. A-74/85-NRB, dated 5-2-1985) held that the order-in-original did not consider the effect of the evidence of two experts examined by the appellants namely, Shri Madan Lal and Shri Tarsem Lal. Shri Madan Lal had stated that the churies, bangles and kadas were not in washed condition and have not been polished. The other expert Shri Tarsem Lal had spoken about the purity, quality and workmanship and that such bangles have been preferred by old people.
The Tribunal held that there is no finding that having regard to the purity, size, weight, etc. the ornaments are not commonly worn in the State of Punjab, and held that in the face of the findings that the ornaments in question are commonly used as ornaments by wealthy families, there must be a definite finding to the contra. The Tribunal, therefore, held that the evidence adduced had to be assessed afresh in the light of the testimony of all the witnesses.
6. Regarding the question as to whether Mohars and Swastik coins are in finished form and not primary gold, the Tribunal held that the Administrator has given a general finding that these items are also primary gold without giving a specific decision about the tenability of the pleas raised by the appellant and directed that the wealth-tax returns filed by the appellant have to be examined in the proper perspective and their evidential value assessed. The matter was remanded to the Collector of Customs & Central Excise, Chandigarh for de novo adjudication.
7. On remand the matter was adjudicated afresh by the Collector of Central Excise, who by order dated 30th June, 1986 has held that "87 churies, 2 pair gold bangle and one pair karas are of the type which are not capable of being worn nor is this type of jewellery worn by any body in Punjab. The so called jewellery being of 23 1/2 carat purity is malleable and will get pressed and lose its shape if worn. Further the jewellery that is worn is not more than 22 carat purity. As stated by Shri Madan Lal, Goldsmith certain people convert primary gold into roughly shaped jewellery and I am of the view that Shri Tejpal Oswal has converted primary gold into roughly shaped jewellery to avoid detection by law enforcing agencies. The so called jewellery do not bear any sign of use which confirms that it is only primary gold given the rough shape of jewellery." Regarding the 15 gold mohars and one gold swastik, he found that the experts who examined the jewellery did not express any opinion about their being jewellery. He also held that the wealth-tax returns filed by the party did not contain any mention of these mohars and swastika anywhere. He has, therefore, concluded that the mohars and swastika are pieces of circular shape, each marked with weight and bearing of the purity of 99.50 and that they are primary gold. He, therefore, ordered absolute confiscation of the primary gold in the shape of 87 churis, 2 pairs of gold bangles and one pair kara and 15 gold mohars and one gold swastika valued at Rs. 1,61,401.50 under Section 71 of the Gold (Control) Act, 1968 and in addition imposed penalty of Rs. 10,000/- on the appellant under Section 74 of the Act for violation of Section 8(1) ibid.
8. It is against this order of the Collector dated 30-6-1986 that the appellant has come up in appeal before us.
9. Shri Jugal Kishore Jain, learned Counsel has appeared on behalf of the appellant. Shri Jain reiterated the facts. His first contention is that there should have been some independent evidence to contradict the expert opinion of Shri Madan Lal and Tarsem Lai regarding the gold bangles, karas, mohars and swastik. According to him the Collector has not come to any conclusion on the basis of independent evidence and has merely gone on the basis of visual inspection of the gold. The learned Counsel placed before us a decision reported in 1989 (22) E.C.R. 565 wherein it has been held that mere visual examination is not enough and if there is no independent evidence the gold should not be held to be primary gold. He next urged that there was no report with the Police prior to 14-11-1974 and that the appellant could have proceeded only if the Customs authorities had proposed action against him. He categorised the silence of Shri M.V. Gore, Bursar of Lawrance School, Sanawar and Shri S.R. Bains, Headmaster of the School from 9-10-1974 to 14-11-1974 as suspicious and alleged that they had deliberately and intentionally kept silent throughout this period even though the articles had been left with the Bursar on 3-10-1974 itself. It is his contention that the appellant had approached the Bursar and the Headmaster of the School on 13-11-1974 for return of the articles and they had demanded a sum of Rs. 50,000/- from him as a condition precedent to the return of the articles. As this demand was not acceded to by the appellant, the Bursar and the Headmaster had reported the matter the next day i.e.
14-11-1974 to the Police. In this connection he points out that Shri M.G. Gore has stated that he had agreed to keep the articles because he knew the appellant being a parent of a student in his school. Learned Counsel Shri Jain next refers to the Wealth Tax returns filed by the family members. In the Wealth-tax return for the assessment year 1974-75 the wife of the appellant Smt. Tarsem Kumari Oswal has declared jewellery valued at Rs. 60,000/-. For the next assessment year i.e.
1975-76, the value of jewellery declared by her has been shown as Rs. 90,000/- and the increase is due both to increase in value as well as acquisition. The wealth-tax return filed by Smt. Satya Rani Oswal wife of the brother of the appellant also shows declaration of jewellery of 130 tolas valued at Rs. 78,000/- and both in the wealth tax returns of the wife of the appellant and the wife of the brother of the appellant there is mention that the jewellery is in the possession of the Department. The next contention of the appellant was that the gold jewellery belonged to himself as well as to other family members like his wife, brother, brother's wife, brother's daughter, etc. He refers us to the affidavit of his brother Shri Dharam Pal Oswal, his sister-in-law Smt. Satya Rani Oswal (wife of Shri Raj Pal Oswal) and Smt. Anjana Rani Oswal (wife of Shri Dharam Pal Oswal). The deponents of the affidavits have categorically stated that some of the gold ornaments belonged to them.
10. Shri Jain, the learned Counsel next draws our attention to Item 4 of the Recovery memo which reads as follows:- "Tin container Red, containing white tin container wrapped in white hanky with mark 'S. Oswal." He urges that the jewellery wrapped up in this handkerchief belonged to Sudha Oswal daughter of Shri Dharam Pal Oswal, brother of the appellant. He seeks to establish the point that there is prima facie, evidence to show that the seized gold belonged to different family members. The learned Counsel contends that the gold ornaments are not intended to pass as primary gold merely because some of the bangles had rough edges which did not mean that the bangles cannot be worn and that they are not ornaments but primary gold. The other argument put forth by Shri Jain is that even if it is held that the gold in question is primary gold, the appellant should be given an option to redeem them on payment of redemption fine and in support of his contention he relies upon the decisions reported in 1989 (21) E.C.R. 223; 1987 (12) Indian Judicial Reports 331 and 1987 (29) E.L.T. 974.
11. Regarding the Gold mohars and coins he relies upon the decision of this Tribunal reported in 1987 (31) E.L.T. 813 in which it was held that gold mohars and habib coins are gold articles as defined in the Gold (Control) Act and articles covered everything of gold which is neither ornament nor primary gold.12. Smt. Dolly Saxena, learned SDR, appearing for the Respondent refers us to page 19 of the impugned order in remand at para 9.4 and para 28 at page 21 of the impugned order. She argues that the Collector has given detailed reasons for coming to the conclusion that the 87 churies, 2 pairs of gold bangles and one pair of karas are primary gold. She urges that the Collector has taken into account the evidence of the experts Shri Madan Lal and Tarsem Lal and has come to a conclusion on the basis of his own independent findings after a visual examination of the gold. She contends that the wealth-tax returns filed by the family members of the appellant have rightly been rejected by the Collector as no details of the jewels have been given in those returns.
13. In reply, Shri Jain placed before us the citation reported in 1956 (30) I.T.R. 181 for the point that an affidavit is the best evidence and the affidavits of the family members of the appellants should not have been ignored by the Collector, especially when the affidavits were before the Collector and after remand the Collector should have cross-examined the deponents of the affidavits.
14. We heard both sides on 22-6-1989 and then felt it necessary to visually examine the items in question, for a better understanding and appreciation of the case. For this purpose, the appeal was posted for re-hearing on 22-9-1989 when the Bench examined the disputed items. We note that the 87 bangles have designs on them, they contain joints, and their edges are smooth and not sharp. We further note that one pair of gold karas is plain (i.e. without any designs) and has "dodis" at both ends and that two pairs of gold bangles have intricate and elaborate designs on them.
15. Regarding the argument of Shri Jain that the Collector has not come to the conclusion regarding his findings on the gold bangles, karas, etc. On any independent evidence, we find that the Collector has decided the issue on the basis of visual inspection of the gold and has not dealt with the opinions of the experts in detail. Though he has dealt with their evidence in paragraphs 17 and 18 of the impugned order, he has not properly appreciated their opinions.
16. Both the experts, Sri Madan Lal and Sri Tarsem Lal have categorically stated that the goods are Ornaments of 23 1/2 Carat purity. Sri Tarsem Lal refers to them as jewellery even though he says he never manufactured such type of jewellery though he was in this trade since 1947. Sri Madan Lal has also stated that old people used to keep gold bullion in the shape of bangles, churies and karas because conversion of gold into such forms would not result in loss of gold as compared to conversion into other types of ornaments. The Collector's finding that the bangles have sharp edges is based entirely on his personal opinion and not on the opinion of the experts.
17. We also find that the Collector's conclusion that the gold in question is not a type of jewellery worn by any body in Punjab is without any basis and no reasons are given for this conclusion.
18. On a careful reading of the evidence of the experts, we find that they have given a categorical, clear and unequivocal opinion on the gold in question on points such as shape, polishing, finish, age and use and they have opined that the items are ornaments.
19. We, therefore, set aside the findings of the Collector that the 87 bangles, 2 pairs of gold bangles and one pair gold karas are primary gold and hold that they are gold ornaments, not liable to confiscation.
20. As regards the 15 gold mohars and one gold Swastika Coin, we find that the matter is covered by a decision of the Tribunal reported in 1987 (31) E.L.T. 813 in which it was held that gold mohars and habib coins are covered by the definition of "article" and do not fall under primary gold or ornaments. Therefore the gold mohars and gold swastik coin are "gold articles" within the meaning of Section 2(b) of the Gold (Control) Act, 1968 and not liable to confiscation.
21. In the light of the above discussion, we set aside the order of the Collector of Customs and Central Excise, Chandigarh dated 30th June, 1986 and allow the appeal.