ORDER
K. Gopal Hegde, Member (J)
1. The Revision Application filed before the Government of India against the Order No. 92 of 1981 dated 18th November, 1981 passed by the Gold Control Administrator statutorily stood transferred to the Tribunal for being heard as an appeal.
2. The brief facts necessary for the disposal of this appeal are:
After seizing gold ornaments weighing 1497.150 valued at Rs. 74,850/- from the residential premises of Shri Jayantilal Vallabhdas Patni, the officers of the Marine & Preventive Division of the Customs (Preventive) Collectorate, Bombay raided the business premises of the firm, M/s. Patni Jewellers on 27-9-1976. A thorough search was carried out; the statutory accounts were examined; physical verification of the stock in trade was made. The search yielded the following excess quantity of unaccounted gold:
(1) New gold ornaments 1849.700 gms. Rs. 92,000/- (2) Primary gold in the 207.100 gms. Rs. 9,500/- form of lagdi. (3) Gold ornaments of 22 619.250 gms. Rs. 30,900/- Cts. purity weighing said to have been received for repairs. (4) One half gold sovereign 4.000 gms. Rs. 175/- of 22 Cts. weighing (5) Gold ornaments 22 Cts. 103.700 gms. Rs. 5,000/- The officers seized the above gold and also eight documents containing transactions in gold on the reasonable belief that there had been contravention of the provision of the Gold Control Act.
3. On further investigation, it was found that two of the partners, viz., Shri Lalitkumar J. Patni and Smt. Kasturben Patni had failed to declare the personal jewellery and further the partner by name Shri Maganlal Vallabhdas Patni had not filed further declaration after disposal of some of the gold items of his personal jewellery. The officers, therefore, seized 629.000 gms valued at Rs. 26,000/- produced by Smt. Kasturben Vallabhdas Patni on the reasonable belief that there was contravention of the provisions of the Gold (Control) Act.
4. During the investigation, statements of Shri Jayantilal Vallabhdas Patni, Maganlal Vallabhdas Patni, Shri Lalitkumar Jayantilal Patni and Smt. Kasturben Vallabhdas Patni were recorded. After completion of the investigation, show cause notices were issued for contravention of provisions of Sections 31, 32, 36 read with Rule 13(1) of the Gold Control (Forms, Fees and Miscellaneous Matters) Rules (for short ‘The Rules’) under Sections 55(1)(2) and (3) read with Rules 11 and 12 of the Rules and also under Section 16(7) of the Act.
5. After consideration of the reply to the show cause notice and after affording personal hearing, the Collector of Customs (Preventive), Bombay ordered confiscation of the gold and gold ornaments seized from the residential premises. He, however, gave option to redeem gold weighing 2783.750 gms. on payment of fine of Rs. 50,000/-, gold weighing 1497.150 gms. on payment of fine of Rs. 30,000/-, and gold weighing 629.000 gms. on payment of fine of Rs. 5,000/-. He imposed a penalty of Rs. 15,000/- on the firm M/s. Patni Jewellers, Rs. 10,000/- on each of the partners Shri Jayantilal V., Patni and Maganlal V.Patni, Rs. 1000/- on Shri Lalitkumar J.Patni and Rs. 500/- on Smt. Kasturben Vallabhdas Patni.
6. Feeling aggrieved by the order of the Collector, the firm and the partners preferred an appeal before the Gold Control Administrator. The Gold Control Administrator, while confirming the order of confiscation, reduced the fine from Rs. 50,000/- to Rs. 30,000/- and from Rs. 30,000/- to Rs. 20,000/-. He also reduced the penalty on the firm from Rs. 15,000/- to Rs. 10,000/- and on Shri Maganlal V. Patni from Rs. 10,000/- to Rs. 5,000/-. In other respects, he confirmed the order of the Collector. Hence this appeal.
7. During the hearing of this appeal, Shri H.C. Jain, learned Advocate of the appellants, made several submissions and they are summarised as under:
(1) M/s. Patni Jewellers are the holders of Gold Dealer’s Licence. The show cause notice was issued to them alleging contravention of the following provisions:
(a) Sections 31, 32 and 36 of the Gold (Control) Act (for short the Act) read with Rule 13(1) of the Gold Control (Forms, Fees and Misc. Matters) Rules, 1968 inasmuch as they acquired and disposed of gold and gold ornaments as shown in the annexure in a manner otherwise than as provided in the said Sections and Rules.
(b) Sections 55(1) (2) and (3) of the said Act read with Rules 11 and 12 of the said Rules inasmuch as they failed to maintain a true and complete account and also failed to make entries in respect of gold and gold ornaments as mentioned in the annexure.
(c) Section 16(7) of the said Act, inasmuch as S/Shri Maganlal V. Patni and Lalitkumar J.Patni and Smt. Kasturben V. Patni partners of the said firm failed to file his/her declaration/further declaration in relation to gold ornaments owned possessed held or controlled or parted with by him/her in his/her capacity other than a licensed dealer.
Shri Jain further submitted that it was the firm M/s. Patni Jewellers that were called upon to show cause as to why penalty should not be imposed on them under Section 74 of the Gold (Control) Act and why the gold and gold ornaments under seizure should not be confiscated under Section 71 of the said Act. No show cause notice was issued to any of the partners alleging contravention of any of the provisions of the Act or the rules or calling all or any of the partners to show cause as to why penalty should not be imposed on them or why confiscation of the seized gold should not be made. Shri Jain submitted in the absence of a show cause notice, no penalty can be levied on the partners and gold belonging to the partners personally cannot be confiscated and therefore the penalty imposed on the partners by the Collector and confirmed by the Gold Control Administrator is bad in law. Shri Jain further submitted that the order for confiscation of the gold ornaments belonging to Smt. Kasturben is also bad in law since no show cause notice was issued to her requiring to show cause as to why the gold ornaments should not be confiscated.
(2) The firm being a partnership firm, the penalty imposed both on the firm as well as the partners is illegal.
(3) The confiscation of 207.100 gms. of primary gold is also bad in law since the firm is entitled to possess primary gold in far excess of 207.100 gms. and since the firm had not contravened the provisions of Section 32.
(4) Confiscation of gold ornaments of 22 carats purity weighing 619.250 gms. valued at Rs. 30,900 is also bad in law inasmuch as the same was not liable to confiscation under Section 71 of the Act since the said quantity were admittedly received by the firm for repairs.
(5) The confiscation of gold ornaments 629 gms belonging to Mrs. Kasturben is also bad in law since she was not required to make any declaration and declaration had been given in respect of that gold by her deceased husband. Shri Jain further submitted that Kasturben was inducted into partnership after the death of her husband and she was only a sleeping partner.
(6) The half sovereign which was ordered to be confiscated ought not have been done since it was kept for puja purposes. The confiscation of gold ornaments weighing 1497.150 seized from the house is also bad in law. The Collector and the Gold Control Administrator were not justified in treating that quantity as stock in trade of the firm.The statement of Shri A.P. Patni was not voluntary. The statements were recorded after he was arrested and while in detention during emergency. Thus the gold ornaments is the personal property of the family members and there were a number of members other than partners in the same house. Their statements were not recorded and in law a family can possess gold ornaments weighing 4000 grams and on these grounds the order of confiscation of 1497.150 gms. is unsustainable in law. Shri Jain submitted that the panchnama also does not disclose from what all places or from whose possession 1497.150 gms. were seized.
(7) What had been seized is not the offended gold. Unless and until it is established that there had been contravention of the Act or the Rule in respect of the seized gold no order of confiscation can be made. Elaborating his arguments, Shri Jain contended that no efforts were made to co-relate the excess gold with the registers. The seizure was effected because the physical quantity exceeded the quantity found in the statutory accounts. And as such the seizure is illegal and the order of confiscation based on such a seizure is also illegal.
(8) The Collector’s finding that there had been a contravention of Sections 31 and 36 is erroneous. There is no evidence that the seized gold were acquired in contravention of Section 31. The burden of establishing that there had been contravention of Section 31 is on the Department and the Deptt. had not discharged that burden. Section 36 only provides for procedure and by itself it does not make an act an offence. Therefore, the invoking of that section simplicitor has no relevance.
(9) The registers prescribed, namely, G.S. 11 and 12 are inadequate to keep true and complete accounts of the gold owned possessed and held or controlled by the dealer. The said registers do not provide for making entries regarding primary gold as well as the foreign materials contained in the ornaments. And, therefore, the Collector and the Gold Control Administrator were not correct in holding that there had been contravention of the provisions of Section 55. In this connection, Shri Jain placed reliance on the decision of the Supreme Court reported in AIR 1984 S.C. page 1249. Shri Jain also placed reliance on the decision reported in 1982 Criminal Law Journal page 588 in support of his contention that possession should not be equated to acquisition. It was also the contention of Shri Jain that Rule/2 invoked in the show cause notice has no relevance at all. Finally, Shri Jain submitted that the business of the firm was carried on by only two partners Jayantilal and Maganlal and therefore the penalty on others even if permissible in law, ought not to have been levied and further the penalty levied on various persons is totally irrational and wholly unjustified. It was also submitted by Shri Jain that when the Gold Control Administrator thought fit to reduce the penalty on one of the partners Maganlal V. Patni from Rs. 10,000/- to Rs. 5,000/- the same yardstick should have been applied in the case of another partner Shri Jayantilal V. Patni on whom the Collector had imposed a penalty of Rs. 10,000/-.
8. Shri Pattekar, appearing for the Collector, however, contended that there is no infirmity in the order passed by the Collector and confirmed by the Gold Control Administrator. He also urged that at no time the appellants disputed that what had been found by the officers were not excess. As a matter of fact, the excess gold had been produced by one of the partners. In the circumstances, the contention of Shri Jain that what had been seized are not the offended gold, has no force. Shri Pattekar also contended that the very fact that the appellants had received gold is sufficient to establish the contravention of the provisions of Section 31 as well as Rule 13 of the Rules. It was also contended by Shri Pattekar that form G.S. 11 did provide for making entry as to the foreign matters and the primary gold and therefore the contention of Shri Jain that the forms prescribed are not adequate to maintain true and proper account is also not correct. Shri Pattekar further submitted that, in law, the partners are required to make declaration not only with regard to the stock in trade but also with regard to the personal properties. And, therefore, the order of the Collector was not only just but also correct in law. Shri Pattekar further submitted that cogent reasons had been given by the Collector and the Gold Control Administrator in support of their orders and he would adopt those reasons. Finally, Shri Pattekar submitted that no leniency is called for in the matter of fine or penalty. The show cause notice was issued not only to the firm but also to the partners.
9. We have carefully considered the submissions made on both the sides. The points that arise for consideration are:
(1) Whether the Collector and the Gold Control Administrator (GCA) committed an error of law in the matter of imposition of penalties on the partners of the partnership firm who was the licensed dealer.
(2) Whether the Collector and the GCA committed an error of law in the matter of confiscation of 619.250 gms. of gold ornaments received for repairs.
(3) Whether the Collector and the GCA committed an error of law in the matter of confiscation of 629.000 of gold ornaments for non-declaration by Smt. Kasturben.
(4) Whether the Collector and the GCA committed an error of law in the matter of confiscation 207.100 gms. of primary gold.
(5) Whether the Collector and the GCA were unjustified in the matter of confiscation of half a sovereign weighing 4 gms.
(6) Whether the Collector as well as the GCA were not justified in treating the gold ornaments weighing 1497.150 gms. seized from the residential premises as stock-in-trade.
(7) Whether the order of confiscation of the gold ornaments by the Collector and confirmed by the GCA was not legal in as much as the seized gold were not shown to be offended gold.
(8) Whether the finding of the Collector and confirmed by the GCA as to the contravention of provision of Section 55 of the Gold Control Act is vitiated by reason of the decision of the Supreme Court reported in 1984 S.C. page 1249.
Point No. 1
In the matter of imposition of penalty on the partners, Shri Jain’s argument has three dimensions. Firstly, he contended that in the show cause notice no allegation was made against any of the partners and none of the partner was called upon to show cause either against the liability of the seized gold to confiscate or against imposition of personal penalty. Shri Jain’s second contention was that it is illegal to impose penalty both on the firm as well as partners as it would amount to double jeopardy. The third contention of Shri Jain was that there was no logic or rhyme in the imposition of different penalties on different partners of the same partnership firm. Further, there was hardly any justification to impose penalty on partners other than Jayantilal and Maganlal since the business of the firm was being carried on by the said two persons and others were only sleeping partners.
10. From the order of the Collector, it is seen that Shri Jain did contend before him that there was no scope to impose penalty on the partners having regard to the nature of the show cause notice. The Collector has brushed aside the said contention by observing:
“The show cause notice is addressed to the firm and its individual partners as well as shown in the body of the notice at the top, and that each of the four partners has received the same, confirms that the firm and its partners have been called upon to show cause in respect of the charges. The Advocate’s contention therefore is not tenable.”
The Gold Control Administrator however justified the penalty on the partners by invoking Section 91 of the Act.
11. We have carefully looked into the copy of the show cause notice issued in this case. From the contents of the show cause notice, we are satisfied that the show cause notice, was issued to the licensed dealer, namely, M/s. Patni Jewellers. The contravention of the various provisions of the Gold (Control) Act and the Rules are alleged to have been made by the firm M/s. Patni Jewellers. It is not only useful but makes the matter clear if you refer to certain portions of the show cause notice. It starts with the words:
“WHEREAS, it appears M/s. Patni Jewellers of Bombay-2, holding Gold Dealer’s licence No. 9/Gold/68, conducting their business at 314 Sk. Memon Street, Bombay-2, have contravened the provisions of (in the subsequent paragraphs the Sections contravened are set out), and thereaftrer the show cause notice reads:
“Now therefore, the said M/s. Patni Jewellers are hereby required to show cause to the Collector of Customs (Preventive) Bombay . . . as to why penalties should not be imposed on them under Section 74 of the Gold (Control) Act, 1968 and why the gold and gold ornaments under seizure weighing 4909.900 gms. valued at Rs. 2,38,425/00 should not be confiscated under Section 71 of the said Act.”
The subsequent paragraph in the show cause notice further amplifies that it was only M/s. Patni Jewellers that were called upon to produce evidence while showing cause and whether they required any opportunity to be heard in person. In the last paragraph of the show cause notice, it was made clear that the show cause notice was issued without prejudice to any action that may be taken against M/s.Patni Jewellers and their partners under the provisions of Section 85 of the Gold (Control) Act or under any of the law for the time being in force. In the whole of the show cause notice no allegation has been made against any of the patrner of the firm and none of the partners had been called upon to show cause against the proposed confiscation of seized gold or against the proposed penalty. Under Section 79 of the Act, no order of adjudication or confiscation of penalty shall be made unless the person concerned is given a notice in writing informing him of the grounds on which a penalty is proposed to be imposed.
12. Issue of a show cause notice contemplated by Section 79 is mandatory before any penalty can be imposed. Since the show cause notice contemplated by Section 79 of the Act had not been issued to any of the partners of M/s. Patni Jewellers, the imposition of penalty on the partners is illegal and not sustainable in law. The finding of the Collector that because of the names of the partners were also mentioned at the top of the show cause notice they became liable to penalty is not correct and it is the result of not comprehending the scope of the show cause notice which was clear and unambiguous. It was issued only to the firm and the firm alone was called upon to show cause against the proposed confiscation and penalty. We, therefore, agree with Shri Jain that the Collector as well as the G.C.A. committed an error of law in the matter of imposition of penalty on the partners of the firm. Having regard to our above finding, it is not necessary to consider the other two contentions of Shri Jain on this question. We, however, set aside the penalty imposed on the partners.
13. Point No. 2: Shri Jain vehemently contended that the order of confiscation of 619.250 gms. of gold ornaments which were admittedly received for repairs is wholly illegal since the owners of the ornaments were not issued with the show cause notice, as required under Section 79 and since there was no evidence that the owners have had the knowledge or connived with the licensee in the contravention of the provisions of the Gold Control Act. In this connection, Shri Jain relied on the provisions of Section 71 which prohibited confiscation of gold ornaments belonging to the persons other than the licensed dealer.
14. In his other, the Collector had not separately dealt with the seizure of the gold ornaments received by the licensee for repairs. The Collector held that the licenced dealer had contravened the provisions of Sections 31,32 and 36 read with Rule 13 of the Rules. The G.C.A. also had not separately dealt with the liability of the gold received for repairs for confiscation.
15. From the finding of the Collector, it is clear that the order of confiscation was made for the reason that the licensed dealer had contravened the provisions of Sections 31,36 and Rule 13 of the Rules and not because the owners of the gold ornaments who gave it for repairs either contravened any of the provisions of the Gold (Control) Act or the Rules made thereunder or had knowledge as to the contravention of any of the provision of the Act or the Rule by the licensed dealer or that they connived with the licensed dealer in the contravention of any of the provisions of the Act or the Rules.
16. The confiscation of gold is provided under Chapter XII of the Act. Sub-section (1) of Section 71 provides for confiscation of gold in respect of which any provision of the Act or Rule or order made thereunder. Sub-section (1) of Section 71 provides for confiscation of gold in respect of which any provision of the Act or Rule or order made thereunder. But the proviso to the sub-section reads:
“Provided that where it is established to the satisfaction of the officer adjudging the confiscation that such gold or other thing belongs to a person other than the person who has, by any Act or omission, rendered it liable to confiscation, and such act or omission was without the knowledge or connivance of the person to whom it belongs, it shall not be ordered to be confiscated but such other action, as is authorised by this Act, may be taken against the person who has, by such act or omission, rendered it liable to confiscation.”
17. From the seizure panchnama and from the order of the Collector, it is clear that the gold ornaments weighing 619.250 gms were received by the licensed dealer for repairs. Therefore, before ordering confiscation of the gold ornaments received for repairs, the Collector is required to record a finding either that the person who gave the ornaments for repairs themselves contravened the provisions of the Act or Rules and therfore the ornaments became liable to confiscation or that they had the knowledge as to the contravention of the provisions of the Act or the Rules by the licensed dealer or that the said persons connived with the licensed dealer in the contravention of the provisions of the Act or Rules in respect of the ornaments so given for repairs. Since no show cause notice was issued to the persons who gave the gold ornaments for repairs, it can be safely assumed that those persons did not contravene any of the provisions of the Act or Rules. The Collector also did not record any finding that the owners of the gold ornaments who gave it for repairs had knowledge of the contravention of the Rules by the licensed dealer or that they connived in the contravention of the Act or Rules by the licensed dealer. In the circumstances, Shri Jain is right in contending that the order of confiscation passed by the Collector and confirmed by the Gold Control Administrator of the gold ornaments admittedly received for repairs, is bad in law. Since the Collector as well as the G.C.A. committed a grave error in the matter of confiscation of the gold ornaments admittedly received for repairs, we set aside that part of the order of the Collector by which he ordered confiscation of the gold ornaments weighing 619.250 gms. which were admittedly received for repairs.
18. Point No. 3: It was the contention of Shri Jain that the husband of Smt. Kasturben was originally the partner of the firm M/s.Patni Jewellers. After his death, his wife was inducted into the partnership mainly with a view to safeguard her interest and she did not take part in the business of the firm and she was only a sleeping partner. There was no obligation on her to make any declaration. On the other hand, the gold ornaments in respect of which the alleged failure on her part to declare formed part of the gold ornaments already declared by her late husband and therefore, the Collector as well as the G.C.A. committed an error of law in the matter of confiscation of 629 gms. of gold ornaments belonging to Smt. Kasturben.
19. From the order of the Collector, it is clear that 629 gms. of gold formed part of the gold ornaments weighing 1497.150 gms. seized from the residential premises of Shri Jayantilal Vallabhdas Patni, one of the partners of the firm. In this statement, Shri Jayantilal had admitted that the seized gold ornaments seized from the residence are the stock-in-trade of the firm. Therefore, having regard to that admission, the contention of Shri Jain that Smt. Kasturben was not required to make any declaration and therefore the order of confiscation was unlawful assumes no importance. As a matter of fact, it is the incorrect order passed by the Collector that gave rise to this contention. While passing the final order, the Collector ordered confiscation of the gold ornaments weighing 1497.150 gms. and he also ordered confiscation of gold weighing 629 gms. as if these were two separate sets of ornaments. Factually gold ornaments weighing 629 gms. in respect of which there was allegation of non-declaration formed part of gold ornaments weighing 1497.150 gms. seized from the residence. The question that appropriately arises for consideration is whether the gold ornaments weighing 1497.150 gms. seized from the residence of one of the partners formed part of the stock-in-trade and not that there was non-declaration by another partner in respect of the portion of the ornaments. The Collector had recorded a finding that the gold ornaments seized from the residence formed part of the stock-in-trade of the firm. This finding is based on the admission made by Shri Jayantilal in his statement. The contention of Shri Jain, on the other hand, were twofold. Firstly, he urged that all the ornaments seized from the residence belonged to the joint family of Shri Vallabhdas the deceased husband of Kasturben and that Vallabhdas had made a declaration during his lifetime. The second submission of Shri Jain was that Shri Jayantilal’s statement was recorded during Emergency and after his arrest and therefore it was not voluntary.
20. Having regard to the date on which the statement was recorded, we may accept Shri Jain’s contention that the statement was recorded during Emergency. But then just because the statement was recorded during Emergency there is no presumption that it was not voluntary. The contention of Shri Jain that the statement of Shri Jayantilal was recorded after he was arrested is firstly not borne out from the records. And secondly, even if it is so there is nothing on record to show that it was obtained by promise threat or inducement. In short, it was not a voluntary statement.
21. Shri Jayantilal himself did not allege any threat or inducement or promise. The statement was also not retracted till a reply was sent to the show cause notice. The statement of Jayantilal in material particulars, finds corroboration by the statement of his brother Maganlal. Further, if really the gold ornaments seized from the residence were the family ornaments and in respect of which Vallabhdas Patni had earlier made declaration the copies of the declaration would have been with the appellants or any of them or even they could have obtained a copy and in that event, easy verification was possible. The very fact that the appellants or any one of them have not thought fit to produce a copy of the declaration filed by Vallabhdas clearly indicates that if produced it would go against their contention. In any case, we have no reason not to accept the statement of Shri Jayantilal that 1497.150 gms. of gold ornaments seized from the residence form part of the stock-in-trade. Therefore, we see no illegality in the order of confiscation passed by the Collector and confirmed by the Administrator.
22. Point No. 4: It was the contention of Shri Jain that 207.100 gms. of primary gold were in the form of lagdies, wires, bits and strips of purity varying from 20 to 22 cts. There was no stock taking for a long time. The wires, bits and strips received from the various goldsmiths remained in the shop premises. They were not acquired from any other person and having regard to the nature they could not have been acquired also. The total quantity found was only 207.100 gms. The licensed dealer is entitled to keep in the premises primary gold weighing 400 gms. And therefore, there had been no violation of the Gold (Control) Act much less the provisions of Section 32 as has been held by the Collector. Shri Jain further contended that the statutory forms prescribed for maintaining the accounts did not contain any column providing for entering primary gold of the form of lagdies, wires, bits and strips and in the said circumstances, there is no scope to even allege that there had been contraventions of Sections 36 or 55 as has been held by the Collector. Shri Jain, therefore, urged that the order of confiscation of 207.100 gms. may be set aside.
23. In his order, the Collector observed:
“As regards the primary gold G.S. 11 Register maintained by the dealer does not show any balance. However, a quantity of 207.100 gms. of unaccounted primary gold was recovered. The limit prescribed under Section 33 of the Act (apparently a mistake for 32) are in respect of primary gold which is properly accounted. The conditions, limitations and restrictions referred to in Section 36 of the Act, are in relation to these specified in the various provisions of the Act and the Rules thereunder, and not to any specified gold consignment under seizure. In view of the above and in view of the recovery of unaccounted gold from the licensed premises, the contravention of the provisions of Sections 31, 32 and 36 are established”.
24. The G.C.A. did not specifically dealt with the liability of the primary gold weighing 207.100 gms. to confiscation.
25. The provisions regarding possession of primary gold by a licensed dealer is found in Section 32 of the Act. As per the provisions of that Section, a licensed dealer can possess or keep in custody of primary gold in the form of standard gold bars. If the licensed dealer does not employ any artisan he can also be in possession or custody of primary gold weighing 400 gms. which is obtained in the process of, in connection with, the making, manufacturing preparing or repairing of one or more articles or ornaments. From the description of the primary gold, it is seen that it is in the form of lagdies, wire and strips. But then, there is no precise evidence as to the weight of lagdies or wires, or strips separately. In his statement, Shri Jayantilal stated that primary gold weighing 207.100 gms. recovered from the premises were obtained by melting old gold ornaments purchased from customers. No vouchers in respect of old gold ornaments purchased were prepared. Having regard to the said statement is difficult to accept Shri Jain’s contention that there was no contravention of Section 32.400 gms. of primary gold which a licensed dealer could possess under Section 32 must be primary gold which is obtained in the process or in connection with the making, manufacturing or repairing of one or more articles of ornaments. 207.100 gms found in the licensed premises is not shown to be obtained in the process of, or in connection with the making, manufacturing, repairing or preparing of one or more articles or the ornaments. We, therefore, reject Shri Jain’s contention that the Collector committed an error of law in ordering confiscation of 207.100 gms. of primary gold.
26. Shri Jain, appearing for the appellants, contended that half a sovereign weighing 4 gms was a puja article which is normally kept in every gold dealer’s licensed premises and therefore the Collector was unjustified in ordering confiscation of that half sovereign. This submission of Shri Jain cannot be accepted having regard to the statements of Shri Jayantilal and Maganlal. Both of them stated that half sovereign weighing 4 gms. was received from a customer for manufacturing one gold ring. But no voucher had been prepared for the same. No entry thereof made in the register. The statements of the above said persons belies Shri Jain’s contention that half sovereign seized and ordered to be confiscated was a ‘puja’ article. It is true that according to the statement of Jayantilal and Maganlal that half sovereign was received from a customer for manufacturing a ring. If the statements are accepted then that sovereign cannot be ordered to be confiscated because no show cause notice was issued to the owner of the half-sovereign and there is also no finding that the owner had knowledge or connived in the dealer committing the contravention of the provisions of the Act or Rules. But then the appellants did not take a contention either before the Collector or before us that half the sovereign belonged to somebody else and therefore not liable to confiscation. In the absence of such a contention, we will not be justified in setting aside the order of confiscation of half sovereign passed by the Collector and confirmed by the G.C.A.
27. Point No. 6: The contention of Shri Jain was that gold ornaments weighing 1497.150 gms. were not the stock-in-trade but joint family property. We have already considered this contention while considering Shri Jain’s contention that 629 gms. were not liable to confiscation. For the reasons stated thereunder, we reject the present contention of Shri Jain.
28. Point No. 7: Shri Jain contended that there is nothing on record to show that there had been contravention of provisions of Gold (Control) Act or Rules in respect of the seized gold. All that had been done by the Gold Control Officers was to total up of the quantity of gold ornaments in the two statutory registers and total up of the quantity found in the premises and the excess gold ornaments were seized. But then under law, only offended gold can be seized and ordered to be confiscated. Shri Pattekar on the other hand, had contended that there was clear evidence in the form of admission by a partner that seized gold are the offended gold. We have perused the statement of Shri Jayantilal. He has stated that he had poduced the gold ornaments which were not accounted in the registers. Having regard to the said statement, the contention of Shri Jain must necessarily fail. We therefore reject this contention.
29. Point No. 8: It was the contention of Shri Jain that the register prescribed, namely G.S. 11 and 12 are inadequate to keep complete accounts of the gold owned, possessed, held or controlled by a dealer. The said registers do not provide for making entries regarding primary gold as well as foreign materials contained in the ornaments. The Supreme Court, according to Shri Jain, in Manekchand’s case AIR 1984 S.C. 1249 had found1 this deficiency and had also directed the Administrator not to take any penal action against licensed dealer for failure to maintain accounts in the amended form G.S. 11 and G.S. 12 registers and therefore the Collector and the G.C.A. were unjustified in taking into consideration the contravention of Section 55.
30. We have gone through the judgment of the Supreme Court in Manikchand’s case. Several contentions, such as, the provisions of Section 16(7), 27(7), 100 of the Act being violative of Articles 14 and 19 of the constitution were urged before the Supreme Court. Along with those contentions, it was also urged that the old forms were better and the new form G.S. 11 & G.S.12 lack in providing adequate or proper columns with the result that by filling these a true and complete account of gold owned or possessed, or held or controlled by the dealer could not be reflected. The Supreme Court, while rejecting the contentions regarding the violation of Articles 14,19, 301 and 302 of the Constitution, did observe that the grievances made regarding the forms G.S. 11 and G.S. 12 has some substance. The Supreme Court, therefore, directed the Administrator to look into the grievances and remedy the same by taking appropriate action. While making such a direction, the Supreme Court expressed a hope that in the meanwhile no action penal or otherwise would be taken against licensed dealer for failure to maintain accounts in the amended form G.S. 11 and G.S.12. The effect of the judgement of the Supreme Court is not that the dealer is not required to maintain any accounts at all. The effect of the judgment is that if there is any deficiency by reason of G.S.11 & G.S. 12 not having required columns no penal action should be taken against the licensed dealers. In the instant case, according to the statements of the two partners who even according to Shri Jain are the partners that were carrying on day-to-day business unequivocably admitted that the excess gold ornaments were purchased by them and kept after polishing for sale. They had forgotten to account for the said ornaments in the register. Thus, it is clear that in these circumstances, if the Collector had held that there was contravention of Section 55 and if the G.C.A. had confirmed such a finding, no exception can be taken to such a finding. We, therefore, see no force in the present contention of Shri Jain. We accordingly reject this contention.
31. In the result, we allow this appeal in part. The personal penalty on all the partners, is set aside. The penalty if paid shall be refunded to them.
32. The order of confiscation of 619.250 gms. of gold ornaments received for repairs is hereby set aside. As a consequence, we reduce the fine from Rs. 30,000/- levied in lieu of confiscation of gold weighing 2783.750 to Rs. 24,000/-(Rupees twenty four thousand only). We also set aside a fine of Rs. 5,000/-levied in lieu of confiscation of 629.000 gms. of gold which was already included in gold ornaments weighing 1497.150 gms. The appellants be granted consequential reliefs. In other respects, the orders passed by the authorities below are confirmed.