ORDER
S. Kalyanam, Member (J)
1. This appeal is directed against the order of the Additional Collector of Central Excise, Guntur, dated 29-6-1987 absolutely confiscating 873,850 gms. of primary gold under Section 111 (d) of the Customs Act, 1962, besides a penalty of Rs. 5,000/- under Section 112 of the Customs Act, 1962.
2. The appellant is a certified goldsmith. On the basis of intelligence, the officers of Headquarters Gold & Customs Preventive Unit, Guntur, intercepted the appellant and other person on 2-8-1985 at about 10.30 a.m. at Vijayawada Railway Station. One Durga Das who was also in the company of the appellant at that time was found in possession of the appellant’s brief case which on examination by the authorities was found to contain 873.850 gms. of primary gold . as detailed hereunder :
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S.No. Description Weight Purity Value
Grams Ct. Rs.
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1. First packet packed in Hindi Daily 58.500 24 12,578
News Paper containing the gold
biscuit having markings "SUISSE 5
TOLAS 999.9 FINE GOLD ESSAYEUR
2. Second packet packed in Hindi News 187.500 24 40,313/-
Paper containing one gold bar having
markings "CHINESE GOLD AND
SILVER EXCHANGE SOCIETY (H.K.)
Primary gold 5 TOLAS 99% GOLD JUN/85"
GOLD JUN/85"
3. Third packet in Hindi paper 264.050 24 55,451/-
containing 7 primary gold rods each
in four foldings
4. Fourth packet in Hindi paper 363.800 24 76,398/-
containing 13 primary gold pieces
of different sizes in round shape. -------- -------------
TOTAL : 873.850 1,84,740/-
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The appellant also gave an inculpatory statement to the effect that Items No. 2 & 3 referred to above belonged to turn which he purchased for a sum of Rs. 85,000/- for purpose of sale. He also stated that the other two items under S.No. 1 & 4 above belonged to his companion Durga Das. It is in these circumstances, the authorities after further investigations initiated proceedings against the appellant and his companion under the provisions of the Customs Act, 1962 as well as the Gold (Control) Act, 1968 which eventually resulted in the present impugned order now appealed against. In regard to confiscation and penalty of gold in question under the provisions of the Gold (Control) Act, 1968, a separate appeal is pending before the Collector of Central Excise (Appeals), Madras, against the impugned order.
3. Shri Narayanan, the learned Counsel and Shri Parthasarathy the learned Consultant for the appellant at the outset, submitted that the Show Cause Notice was not served on the appellant before the expiry of six months in terms of Section 110 of the Customs Act, 1962,, the ‘Act’ for short and therefore, the impugned order is vitiated. It was further submitted that even though reliance has been placed in regard the purity of the gold and its foreign origin on the Mint authority dated 26-2-1986 against the appellant, a copy of the same was not given to the appellant much less the appellant afforded an opportunity of being heard in that regacd. The impugned order was, therefore, assailed as violative of the principles of natural justice.
4. Heard Shri C.V. Krishnan, the learned D.R.
5. Regarding the first point we do not find any substance because the issue is squarely covered by the ratio of the Bench ruling of this Tribunal in the case of Inderkumar Seth v. Collector of Central Excise, Coimbatore, reported in 1987 (13) E.C.R. 399 wherein following the Division Bench ruling of the Madras High Court in the case of Collector of Customs & Central Excise, Hyderabad v. Amruthalakshmi and Ors. reported in AIR 1975 (Madras) (p. ’43) and also the ratio of the Supreme Court in the case of Assistant Collector of Customs v. Charan Das Mal-hotra reported in AIR 1972 SC (698) the Bench has held that even if a Show Cause Notice is not issued within the statutory period of six months as envisaged by Section 110(2) of the Customs Act, 1962, that would not take away the power of Department to proceed with confiscation and penalty proceedings under Section 124 of the Customs Act, 1962. It is held that the aforesaid two Sections are independent and while Section 110 of the Customs Act is restricted to seizure and detention of the goods for purposes specified, it has nothing to do with the powers conferred on the authority under Section 124 of the Customs Act, 1962. This view of the Tribunal is also covered by the ratio, of the various earlier rulings of this Bench. We would also like to note that in a recent judgment dated 23-10-1986 in the case of Shri Sat Pal, Amritsar v. Collector of Customs & Central Excise, Chandigarh, the Special Bench of the Tribunal comprising three Hon’ble Members have taken an Identical view on an interpretation of the scope of Section 110(2) of the Customs Act, 1962 vis-a-vis Section 124 of the Act. We, therefore, reject the plea of the appellant in this regard.
6. We find from the records that the appellant in reply to the Show Cause Notice dated 27-2-1986 has specifically challenged the purity of the gold in question and contended that the same should be assayed by the Mint authority before taking any action. We find that the report of the Mint authority has not been set out in the Show Causes Notice understandably because at the time when the Show Cause Notice was issued, the report of the Mint authority had not been received. Be that as it may, after the receipt of the report of the Mint authorities, in confirmity with the principles of natural justice, the appellant should have been given a copy of the same and a reasonable opportunity to rebut it as per law; more particularly, when reliance has been placed on the same against the appellant in the impugned order. Therefore, without expressing any opinion on the issue, we set aside the impugned order and remit the matter for reconsideration of the issue after furnishing the appellant a copy of the Mint Certificate and affording him a reasonable opportunity of being heard.