ORDER
K.S. Venkataramani, Member (T)
1. This is an appeal directed against the order dated 11-11-87 passed by the Collector of Central Excise (Appeals), Madras, by which he had upheld the order of the Deputy Collector of Central Excise, Trichy, dated 7-8-87 rejecting the renewal application of the Gold Dealer’s Licence under the Gold (Control) Act, 1968 of the appellant herein, who are licensed Gold Dealers at Pattukkottai.
2. The appellants applied for renewal of their licence on 1-11-85. The Depart ment found that the appellant G. Subramanian had been involved in an offence case during 1985, which was adjudicated by the Collector of Customs & Central Excise,
Trichy, in his order dated 12-5-1986, who levied a redemption fine or Rs. 2 lakhs on the seized gold ornaments and a penalty of Rs. 10,000 on Shri Subramanian for violation of the various provisions of the Gold (Control) Act.
3. Proceedings were instituted against the appellant by issue of a show cause notice asking him to show cause why the application for renewal of the licence should not be rejected under Rule 3(f) of the Gold Control (Licensing of Dealers) Rules, 1969, which lays down that the renewal may be refused if the applicant had been involved in any previous offence. On consideration of the reply the Deputy Collector ordered rejec tion of the renewal application. The appeal against this order was also rejected.
4. Shri C. Natarajan, the learned counsel appearing for the appellant, submitted that the non-renewal of the licence for past offence was not justified in this case, because the lower authorities have omitted to consider the nature and gravity of the offence. The learned counsel pointed out that the offence in which the appellant was involved was not a case of possession of any contraband primary gold or foreign gold. The gold seized and confiscated were only gold ornaments. The appellant was a traditional goldsmith and he does not know any other profession. He has a clean past record. The learned counsel also relied upon the decision of the Western Regional Bench of the Tribunal in the case of Collector of Customs (Preventive), Bombay v. Manoharlal Ghanshyamdass Jewellers, 1988 (12) E.T.R. 308, wherein the Tribunal had found that refusal to renew licence should be confined to serious and persistent contravention. In this case the ap pellant had not been involved in any previous offence other than the one for which he had been penalised. Nature of the offence also was not such as to make the appellant deserving of the harsh punishment of non-renewal of his licence, which vitally affects his livelihood, because the appellant knows no other profession. The learned counsel also mentioned that the Department itself had not any objection for renewal of licences of other dealers, who were also involved in previous offences involving gold of about the same quantity as the appellant herein. The learned counsel also submitted that the Department had launched a prosecution in the same case against the appellant, which has been decided in favour of the appellant and that this should also be taken as an in dicator about the nature and gravity of the offence and in the circumstances, the coun sel submitted, that the lower authority has to necessarily go into the gravity and nature of the offence, which had not been done in this case, and the non-renewal of the licence upon the fact that the appeal by the appellant against the penalty and fine had been taken up upto the Tribunal stage and the Tribunal had upheld the penalty, though giving relief in the quantum thereof on the appellant pleading guilty of the charges against him, is not justified. However, in the circumstances explained above the learned counsel submitted that the appellant should be given a chance to show that the nature and gravity of the of fence involved was not such as to deserve the harsh punishment of being deprived of the traditional livelihood. The learned counsel also furnished a list of dealers whose licen ces have been renewed despite previous offences of the same magnitude.
5. Shri Bhatia, the learned”Senior D.R., appearing for the Department, con tended that the renewal application in this case has been rejected only after the offence in which the appellant has been involved had been decided upto the appellate stage before the Tribunal. The Tribunal had also upheld the penalty and held that the char ges were established. In these circumstances the lower authorities were correct in not renewing the licence. The offence also involved fairly large quantity of gold ornaments and the appellant had pleaded guilty of the offence. In response to the suggestion from the Bench the learned Senior D.R. also furnished a list of licensees whose licenses have been renewed without any objection by the Department, although these licensees had also been involved in previous offences. Similarly, the appellant herein also has given a list of names of the dealers whose licences, according to the appellant, have also been renewed in spite of past offences.
6. We have considered the submissions of the learned counsel as well as the learned Senior D.R. In the matter of non-renewal of licence for past offence under Rule 3(f) of the Gold Control (Licensing of Dealers) Rules, 1969, the Tribunal has been taking the view that in each such case non-renewal should not be automatic for a past offence but that the nature and gravity of the offence should be looked into as non-renewal of a licence of a dealer vitally affects his livelihood. In this context in the decision of the West Regional Bench in the case of Collector of Customs (Preventive), Bombay v. Manoharlal Ghanshyamdass Jewellers, 1988 (12) E.T.R. 308, the Tribunal had occasion to refer to the report of the Working Group on Gold Control Machinery relating to the renewal procedure. The Group had observed that the Department may consider suspension of a licence where a prosecution under the Customs Act or the Gold (Control) Act had been launched and had recommended that the cancellation of licence may only be con sidered when a licensee had been convicted. The Tribunal had also cited the instruc tions of the Govt. of India especially the one dated 27-2-1987 of the Gold Control Administrator wherein that authority had observed that “if licences are cancelled/not renewed in terms of the instructions of 9th July, 1986 the punishment would be dis proportionate to the offence unless judgment is exercised depending upon the merits of the case”. The Gold Control Administrator in that letter had also emphasised that the Department should be circumspect about taking a step so drastic as cancellation of licence of a dealer for indulging in repeated violations of law and for being convicted in prosecution proceedings. These instructions and the Gold Control Administrator’s let ter cited by the West Regional Bench have also been referred to by this Bench in some of its decisions. However, the West Regional Bench had further made cer tain observations which are of significance. The Tribunal observed in para 41 of its order as follows :-
“To carry on any business is a fundamental right conferred on a citizen under Article 19(1)(i)(g) of the Constitution. The renewal of licence prevents the licensee from carrying on the business. Therefore, for trivial breaches or con traventions of the provisions of the Gold (Control) Act or the Rules, the licens ing authority should not refuse to renew the licence even if the breaches or the contraventions were ultimately upheld by the Appellate Tribunal in appeal. The refusal to renew the licence should be confined to serious and persistent con traventions.”
In this case the Deputy Collector had ordered the rejection of the renewal ap plication based on his finding that the offence in which the appellant was involved had been taken upto the appellate stage before the Tribunal and the appellant did not con test the appeal on merits but merely prayed for reduction of fine and penalty and the Tribunal had on this basis reduced the quantum of redemption fine only. However, the nature of the offence case and the seriousness of the violation had not been actually gone into and commented upon by the Deputy Collector. In view of the foregoing discussion, which show that the Departmental Authorities themselves have emphasised the need for circumspection in the matter of rejection/non-renewal of applications for dealers licen ces, and the stand taken by the Tribunal in some of these cases which would indicate that even in such a case where the offence case has been taken upto the stage of Appellate Tribunal, which has also been decided, there would still be ground and justification for judging whether the circumstances of the case would indicate that it is of such serious nature and whether the contravention has been so persistent as to justity the extreme penalty of non-renewal of licence. In this context we also note the fact that in the case of other Gold Dealers, who were also involved in previous offences relating to com parable quantity of gold, the Department had not refused renewal and the particular of fence case which led to the impugned order is also one relating to no contraband primary gold but only relates to ornaments, which will be, in our view, relevant factor for con sideration of the nature of the offence. Therefore, on consideration of the totality of the facts and circumstances of this case we hold that it would be a fit case for remanding to the original authority for determining whether the violation of the law by the appellant is so serious and his record shows a persistent tendency for such violation in order to justify the non-renewal of the dealer’s licence. In such a view of the matter, we set aside the impugned order and remand the case to the Deputy Collector of Central Excise, Trichy, for issuing orders afresh in the case in de novo proceedings in the light of the above observations after giving the appellant an opportunity of hearing in accordance with law.