ORDER
G.P. Agarwal, Member (J)
1. Out of the two captioned appeals, Appeal No. GC(DEL)(T)88/82-NRB is directed against Order-in-Original No. 3/Gold/82 dated 19-4-1982 whereas Appeal No. CD(DEL)(T)1717/ 82-NRB is directed against Order-in-Original No. 3/Customs/1982 dated 1.9-4-1982, both passed by the Collector of Customs & Central Excise, Indore (MP) in the proceedings started under the Gold (Control) Act, 1968 and the Customs Act, 1962 against the late Shri Motilal Girdharilal Nema of Maheshwar, Distt. Khargone (MP) on the identical facts. Originally, separate petitions were filed against the said two orders passed by the Central Board of Excise & Customs, by the present appellants claiming to be the survivors by inheritance of the said Shri Motilal Girdharilal Nema, which now stand statutorily transferred to this Tribunal for being treated and disposed of as appeals. Since both the appeals involve identical facts, they were heard together and are disposed of accordingly by this common order.
2. Brief facts of the case so far as relevant for the purpose of these appeals are that the Central Excise Officers raided the residential and the business premises of the deceased Shri Motilal Girdharilal Nema of Maheshwar, a money-lender and a dealer in silver on 19-9-1976. As a result of the search of the residential premises, 18 gold slabs (biscuits) each weighing 10 tolas bearing foreign marking weighing 180 tolas, that is to say 2099.500 gms. valued at Rs. 1,15,200/- of 24 carat purity were found secreted in a long wall cavity made for sliding inside the ground horizontally a wooden trap door of the underground celler situated in a small room below the staircase leading to the first floor. These recovered 18 gold slabs were found kept in two tins dibbas containing 8 and 10 gold slabs (biscuits) duly wrapped in old torn cloth separately.’ Search of the business premises resulted in the recovery of the following items from two tin dibbas kept in a drawer 6f the safe of the almirah:-
1. Primary gold .. 40.700 gms. 2. Old gold ornaments .. 300.000 gms 3. New gold ornaments .. 356.000 gms The said primary gold and the new gold ornaments were recovered from one tin dibba whereas, the old ornaments and their broken pieces were found from another dibba.
Since the deceased Shri Motilal Girdharilal Nema could not produce the proof of the licit importation, acquisition or possession in respect of the said recovered 18 gold slabs (biscuits) same were seized under the reasonable belief that they were smuggled into India under the provisions of the Customs Act. The recovered primary gold and gold ornaments were also seized under the provisions of the Gold (Control) Act, 1968. As a sequel thereof, separate show-cause notices for violating the various provisions of the Customs Act and also for violating the provisions of the Gold (Control) Act were issued to the deceased Shri Motilal Girdharilal Nema.
3. In the adjudicating proceedings started under the provisions of the Customs Act, the case was adjudicated by the Collector, Central Excise, Indore vide his Order-in-Original No. VIII(Cus)/10-19/76 dated 14-12-1978, under which the recovered 18 gold slabs (biscuits) were confiscated absolutely under Section 111(d) of the Customs Act. But the Collector kept the adjudication in personam pending and ordered further investigation to link the persons as it was argued on behalf of the deceased that there was no presumption that the father as head of the family is in the possession of everything in the house. Accordingly, the Assistant Collector, Central Excise, investigated into the case and it was found that the deceased Shri Motilal Girdharilal Nema had the full and absolute knowledge of the specially designed cavity and the secret chamber from where the 18 slabs of gold were recovered and that the said recovered gold slabs were in the conscious possession of the deceased. Consequently, a show-cause notice asking the deceased to show cause as to why a penalty be not imposed upon him under Section 112 of the Customs Act, 1962 was issued. After the usual enquiry, the Adjudicating Authority found the charge proved against the deceased Shri Motilal Girdharilal Nema (since died) and ‘imposed a personal penalty of Rs. 75,000/- under Section 112 of the Customs Act vide the impugned Order-in-original No. 3/Customs/ 1982.
4. In the case started under the provisions of the Gold (Control) Act, the Adjudicating Authority after the usual enquiry ordered for the confiscation of the entire primary gold weighing 40.700 gms, seized from the shop and in regard to the ornaments, both old and new, the Adjudicating Authority while confiscating the same under Section 11(1) and (2) gave an option to redeem the same on a payment of a fine of Rs. 50,000/-and also imposed a personal penalty of Rs. 25,000/- upon the said Shri Motilal Girdharilal Nema under Section 74 of the Gold (Control) Act vide impugned Order-in-original No. 3/Gold/82. No separate order in respect of the recovered 18 gold slabs was passed as they were already confiscated absolutely and a penalty of Rs. 75,000/- was also imposed under the provisions of the Customs Act.
5. We have heard Shri 3.P. Gupta, learned Senior Advocate for the appellants and Shri Rakesh Bhatia, learned SDR for the respondent in both these appeals.
6. Before we advert to the arguments advanced by both the parties, it deserves to be mentioned here that in the adjudicating proceedings started under the provisions of the Customs Act, the case was adjudicated by the Collector, Central Excise, Indore vide his Adjudicating Order No. VIII(Cus)/10-19/76 dated 14-12-1978, under which the entire quantity, that is to say 18 gold slabs (biscuits) was confiscated absolutely under Section 111(d) of the Customs Act. But the Collector kept the adjudication in personam pending. Since no revision/appeal was filed against the said adjudicating order No. VIII(Cus)/l0-19/76 dated 14-12-1978, it has become final. On a point of clarity, the said order of confiscation was neither challenged by way of any appeal or a revision before the higher authorities nor it was assailed before us. Hence it has attained the finality.
Appeal No. CD(DELXT) 1717/82-NRB:
7. Shri J.P. Gupta, learned counsel for the appellants in the Customs appeal has assailed the impugned Order-in-Original No. 3-Cus/82 on the following grounds:-
(i) that the said Shri Motilal Girdharilal Nema died on 25-3-1982, that is to say about a month before passing of the impugned Order-in-original (but admittedly after the closure of the case for orders) and therefore the penalty imposed upon the said Shri Motilal Girdharilal Nema is illegal being imposed on a dead person;
(ii) that even otherwise the personal penalty being “penalty in personam”, no question of recovery of the penalty from the said Shri Motilal Girdharilal Nema arises after his death;
(iii) Alternatively, the impugned order is bad in law because the Adjudicating Authority has reopened the findings of predecessors given in favour of the deceased Shri Motilal Girdharilal Nema in the earlier Adjudication Order No. VIII(Cus)/! 0-19/76 dated 14-12-1978; and
(iv) that the finding of the Adjudicating Authority that the primary gold was recovered from the exclusive possession of the said Shri Motilal Girdharilal Nema is perverse. There is nothing on record to show that the said Shri Motilal Girdharilal Nema had the knowledge of the recovered primary gold.
8. After hearing the learned counsel for the appellants and the learned SDR for the respondent, we are of the opinion that the contention of the learned counsel for the appellants that there should be no question of recovery of penalty if the person concerned has since passed away before the recovery of the penalty, has got some substance. In the matter of Naini Glass Works Pvt. Ltd., Naini reported in 1982 ELT 644 (GOI), the same question was raised and decided in the following terms:-
“As regards the petitioners’ plea that the penalty imposed was personal to Shri J.P. Bhargava, Government agree with the petitioners that there should be no question of recovery of penalty if the person concerned had since passed away before the recovery of the penalty.” This view is in line with the fundamental principles of quasi-criminal responsibility of a heir or a legal representative of the offender. For, the liability under Section 112 of the Customs Act is in the nature of quasi-criminal responsibility, hence no ‘ recovery can be made under this section from a third party, even though he may be a heir or a legal representative of the offender. In other words, the obligation under Section 112 of the Customs Act is of a personal nature which goes with the death of the offender, no recovery can be made under this section from the heir or a legal representative of the offender. Since the confiscation of the primary gold recovered is not challenged before us and we have agreed with the contention of the learned counsel for the appellants that after the death of the said Shri Motilal Girdharilal Nema the question of the recovery of the personal penalty does not arise, it is not necessary for us to consider the other submissions made by the learned counsel for the appellants as stated above as the same have now become of academic interest only.
9. Thus, the aforesaid Custom appeal is disposed of accordingly. Appeal No. GC(DELXT) 88/82-NRB:
10. The learned counsel for the appellants Shri J.P. Gupta in this gold appeal has submitted that the redemption fine is disproportionate and is also in conflict with the provisions of Section 73 of the Gold (Control) Act and that Shri Motilal Girdharilal Nema having since expired, there should be no question of recovery of the penalty from him.
11. We have heard the learned counsel for the appellants as well as the learned SDR for the respondent.
12. As regards the question of recovery of personal penalty of Rs. 25,000/- imposed on Shri Motilal Girdharilal Nema under Section 74 of the Gold (Control) Act, we agree with the learned counsel for the appellants that after passing away of the said Shri Motilal Girdharilal Nema, the question of recovery of penalty does not arise as held in the case of Naini Glass Works Pvt. Ltd., Naini (supra).
13. As regards the redemption fine, we find that the Adjudicating Authority has confiscated the ornaments, both old and new, under Section 11(1) and (2) of the Gold (Control) Act holding that the charge of dealing as a gold dealer in respect of both old and new ornaments without a gold dealer licence stands proved. However, the Adjudicating Authority gave the owner an option to redeem the same on payment of a fine of Rs. 50,000/- only in lieu of confiscation. From the Seizure Memo, we observe that the new gold ornaments weighing 356.300 gms. valued at Rs. 18,000/-and old gold ornaments weighing 300 gms. valued at Rs. 1,500/- were recovered from the shop of the said Shri Motilal Girdharilal Nema of Maheshwar. Thus, the value of the thing in respect of this confiscation is of the value of (Rs. 18.000/- + Rs. 1,500/-) Rs. 19,500/-. Consequently, keeping in view the provisions of Section 73 of the Gold (Control) Act, which provides only for “such fine, not exceeding the value of the thing in respect of which confiscation is authorised”, we feel that the redemption fine of Rs. 50,000/- is not in conformity with the provisions of Section 73, ibid. Looking to the facts and the circumstances of the case in hand, we feel that the redemption fine of Rs. 15,000/- would met the ends of justice. Accordingly, the redemption fine is reduced to Rs. 15,000/- (Rupees fifteen thousand only) from Rs. 50,000/-.
Conclusion: In the result, both the Customs and Gold appeals are disposed of as indicated above.